|
What is the best way of going about buying a house? You go through a series of mortgage loans. How would you select the best mortgage deal? That would be influenced by how much you are looking at getting and on the rate of interest that you would be able to afford. Generally speaking, the greater the period of the loan, the lesser will be the amount of interest that you will have to pay. To the extent that we are talking of the mortgage types, there are two major types. On the one hand we have the repayment-only mortgages. On the other hand, we have the interest-only mortgages. Let me just give you an introduction to these two loan types. Now, repayment-only mortgages consist of two types of repayments. When you decide to avail of a repayment-only mortgage, you will be shelling out monthly installments of both capital and interest. It will not be unnatural for you to feel that you are paying off much more than you would in other types of mortgages. Well, my advice to you would be not to worry too much about it. The only reason that you seem to be paying more is because you are settling not just the interest but also parts of the capital. Let us now talk about interest-only loans. How does this work? Well, if you had been paying heed to the mortgage markets a few decades ago, you would have heard of the plan of endowment mortgages. If you haven't an inkling about endowment mortgages, read on to find out about them. An endowment mortgage is a type of interest-only mortgage where the borrower has to make investments in an endowment fund or some other kind of life assurance policy. Thereafter, the borrower is made to repay only the interest that accrues on the mortgage. The capital is taken care of by the endowment fund. Of course, this has its bad points, for the fund's performance is determined by market conditions. In the case of the endowment mortgages in the United Kingdom, these flaws were revealed when the markets collapsed in the 1990s. Mortgagers became helpless victims as the performance of the funds suffered, leading to losses for all. These days, nobody even considers endowment mortgages as a way of buying a home. However, other kinds of more stable, interest-only mortgages are still employed occasionally. Would you like to go in for a repayment mortgage or one where you pay just the interest? In my opinion, that is just a question of choice. Both types have their own profits and losses. See to it that you inspect specific mortgages before coming to a final conclusion. Get the best deals on mortgage refinance, mortgage loans, and home equity loans.
Related Articles -
mortgage refinance, mortgage loans, home equity loans,
|
