Finance Articles
Develop Your Domain Names
Should You Apply For A Fixed Rate Mortgage?
With so much interest rate uncertainty in the market borrowers are facing a dilemma as to whether they should fix their home loan interest rate or not by applying for a fixed rate mortgage. A fixed rate mortgage will provide absolute security against interest rate rises ensuring that monthly repayments remain constant regardless of what the money market is doing.
The interest rate, and therefore the interest payments, on the fixed rate product will remain stable for the fixed rate period. This period is predetermined and is usually set between one and five years, although it can be for longer.
Fixing home loan repayments can help considerably with household budgeting which is why this type of product is popular with low income earners and first-time-buyers. Mortgage payments usually account for about a third of a household?s disposable income so it is important to ensure that rising interest rates do not make the home loan unaffordable. Locking in the interest rate at an acceptable level can reduce this risk considerably.
Borrowers should be aware, however, that fixed interest rates are usually higher than variable rates offered on the same products. Additionally, as a general rule, the longer the fixed rate period is, the higher the interest rate will be. This is because lenders must provide themselves with a profit margin on the money they lend. If they are expecting interest rates to increase in the future, their costs will increase and their profit margin will decrease.
Lenders therefore need to build in a larger profit margin for this type of home loan product when compared to variable rate products. Mortgage products that have a variable interest rate should provide a profit to the lender for the entire term of the loan. Borrowers should therefore keep in mind that they might pay over the odds for a fixed rate home loan however the reduction in risk should make up for this.
Another factor that borrowers should consider before applying for a home loan product of this kind is early repayment charges and arrangement fees. Although a fixed rate mortgage can save money over the long term if interest rates rise, borrowers should take into account any fees that may be payable on an existing home loan if it is redeemed and switched to a new product.
Additionally, fixed rate products may attract an arrangement fee. The cost of the arrangement fee should also be taken into account when calculating whether this type of home loan product is worth applying for. Also, home loan products typically come with early repayment charges during the fixed rate period. This means that if the borrower wishes to redeem the loan or remortgage to another product they will have to pay a fee to the lender. Early repayment charges can be as high as five percent of the balance of the loan.
If you are unsure on whether you should apply for a fixed rate home loan, contact a qualified independent financial advisor for expert advice. An independent advisor will be able to assess you borrowing needs and suggest the most appropriate mortgage products for you to consider for your home.
Michael Sterios is a writer for http://www.ukmortgagesource.co.uk
Other Article Sites
findabook.com moneycd.info a-mortgage.info
about-lemon-laws.info aboutstudentloans.info
all-about-publishing.info auctions-articles.info bestcollege-university.com bestispconnection.com
biblefolder.com blogger-website.com books-used.info brokers-guide.info buywindows.info cable-dsl.info
career-miner.com carpel-tunnel.info cashinaflash.info cashloanreviews.info casinobell.com chat-house.info
clearmycredit.info collegeloantips.info crones.info depression-articles.info
dirnic.net dishguides.info
divers-below.com expodog.info
financewizz.com fire-insurance.info getgood.info handleit.net
it-idea.info
health-supplies.info hosting-right.com insidealert.com insurance-facts.info jobs-employment.info
justgood.info lookgold.net
lowcost-travel.info money-source.info myhostzone.info numisblog.com
peoplesearchfinder.info pr-articles.info realeas.com
refinancing-guides.info spyware-remove.info
telelot.info the-law.info
toppaid.info travel-deals.info travelcorrect.com wedding-guide-site.com
your-blog.info your-credit.info
Mortgage Lenders Are Dropping Like Flies With Their Little Legs Turned Up And Kicking
In the wake of negative news after negative news stories filling page after page of print media coupled with negative outlook stories air time on radio and TV the public is found pacing the floor wondering what is going on. Fear can be a crippling emotion to many would be investors who thought nothing of buying a high priced property a year ago with little prospect of even breaking even. Everything was going to be made on the come. The savvy investor who has experienced a cycle or two now recognizes the opportunity knocking at the door. Yes, some areas will get a bigger bounce than others, BUT in the worst of the worst economically depressed areas there are deals which can make sense. There are areas where the affordability index is still ...
Mortgage: Rehabilitation Of Financial Helplessness
The term 'mortgage' is assumed really controversial by people when they are contemplating the idea of taking a loan. It is definitely a very simple procedure which is presumed complicated because your home is attached to the term mortgage.
International Investment Property: How to Make Money and Not Mistakes
The most important thing to remember when shopping for international investment property is the word in the middle: investment.
Home Mortgage Refinance ? Understanding How Home Mortgage Rates and Final Cost Could Help You Save Money
To avoid nasty and expensive surprises on your home mortgage refinance loan, review these tips and hints about the loan as well as home mortgage rates you are considering They can save you money
Mortgage Bankers Sought for Unprecedented Enterprise Lending Solution Co-Development Initiative: Motivity Solutions Launches "LenderBuilt" a Joint
Motivity Solutions, a leading provider of technology solutions for the residential mortgage industry, has launched LenderBuilt (www.LenderBuilt.com), a technology co-development venture designed to help mortgage bankers upgrade their current technology platform and overall business performance while limiting their resource investment due to current market conditions.
Three Investment Lessons To Learn From Warren Buffet
If there ever was any investor that one should pay attention to that would be the infamous Warren Buffet a stock broker who began working his father?s brokerage at a young age of 11 when he made his first stock purchase. That?s why these three investment lessons to learn from Warren Buffet which are so valuable.
Sutherland Global Services Names Leader of Banking, Financial Services & Insurance Markets
Nomis Solutions Empowers Credit Analysts and Underwriters in Auto Finance with a Targeted Decision Support Solution for Negotiation
The Nomis Offer OptimizerTM Helps Generate Tailored Offers to Better Meet Dealer and Customer Needs and to Align with Corporate Performance Targets
Mortgage Insurance Provides a Replacement Income if You Lose Your Own
Mortgage insurance is a versatile payment protection product that would provide an income allowing you to cover your mortgage repayments You are able to take cover for a fixed sum each month and if you should lose your own income you would be able to fall back on your policy
Some Mortgage Loans are Available with Absolutely no Money Needed From You
Today, FHA will loan up to 97 percent of the purchase price of a home, meaning a borrower only needs 3 percent. The three percent down payment can come in the form of a gift, and closing costs can be financed into the loan, making this a true no money out of pocket purchase transaction.
7 questions to ask about refinancing your mortgage
The LendingTree.com '7 for 7' is a snappy, weekly column that came from the idea of providing visitors to LendingTree.com "seven smart borrowing tips to get you through the week." It then became the "Daily Candy" of the financial world providing readers a fun outlet that helps navigate tough money and budget decisions from the very big to the very small. Today's '7 for 7' shares 7 questions to ask when refinancing your mortgage.
Mortgage Leads, What to Look for In Todays Market
For mortgage brokers and loan officers that are sticking it out through todays challenging mortgage industry, you may find yourself on the hunt for some good quality mortgage leads.
What is a second mortgage, and how can I profit from it?
So what is a second mortgage? A second mortgage is a secured loan (or mortgage) that is subordinate to another loan against the same property. More specifically, the second loan in sequence. In real estate, a property can have multiple loans against it. The loan which is registered with county or city registry first is called the first mortgage. The loan registered second is called the second mortgage. A property can have a third or even fourth mortgage, but those are rarer. Second mortgages are called subordinate because, if the loan goes into default, the first mortgage gets paid off first before the second mortgage gets any money. Thus, second mortgages are riskier for the lender, who generally charges a higher interest rate. How can you...
Investment Property-Three Ways To Spot A Money-Making One
You work hard to earn and invest your surplus in the hope of a higher return. Investment property is the ideal choice because you receive regular inflows of rental income and benefit from capital appreciation over time.
Buying Mortgage Payment Protection Insurance in the UK
There are two ways you can buy mortgage payment protection insurance in the UK One is if you have the insurance added in with the loan when taking it out and the other is by buying it independently from a standalone provider
