Flexible Mortgage Uk Mortgages To Specially Suit The Self Employed

While a​ person drawing a​ fixed salary every month finds it​ easy to​ repay loan in​ fixed monthly instalments,​ those with a​ fluctuating income will find it​ otherwise. in​ order to​ tap the​ potential of​ the​ latter group,​ which principally consists of​ self employed people and people whose income is​ largely contributed by commissions,​ flexible mortgages have cropped up.

A fluctuating income makes the​ case of​ these people inappropriate for regular mortgages because of​ two reasons. Firstly,​ lenders would not prefer a​ borrower with fluctuating income. Secondly,​ the​ borrower with such an​ income structure would himself find it​ difficult to​ make timely payments.

Flexible repayments,​ payment as​ and when you​ like,​ and the​ option to​ repay the​ whole of​ the​ loan at​ the​ time you​ want,​ are some of​ the​ qualities that flexible mortgages in​ the​ UK are characterised with.

Before you​ perceive this as​ the​ ultimate freedom,​ let us remind you​ that not all good things come for free. This aptly holds in​ case of​ flexible mortgages. the​ rate of​ interest charged on​ flexible mortgages is​ higher than the​ interest charged on​ the​ regular mortgages.

In spite of​ a​ higher rate of​ interest,​ the​ popularity of​ flexible mortgages in​ the​ UK sees no decline. Until the​ time an​ alternative to​ flexible mortgage comes,​ self-employed people will continue using it. the​ advantages of​ flexible mortgages have overshadowed its drawbacks.

Flexibility of​ repayments forms one of​ the​ most important advantages of​ flexible mortgages. as​ against the​ traditional mortgages where borrowers are required to​ pay a​ fixed instalment every month,​ flexible mortgages are easy on​ repayment rules. Consequently,​ in​ a​ month when the​ resources are not enough or​ when the​ borrower is​ incapable to​ make repayments at​ the​ normal rate because of​ loss,​ lesser repayments will be required. Similarly,​ when the​ borrower is​ in​ the​ capacity to​ pay more than what is​ required,​ he can make an​ overpayment. Paying less also means paying nothing. This is​ actually true though hard to​ believe. Payment holidays form one of​ the​ prime attractions of​ flexible mortgages. During a​ payment holiday the​ borrowers gets exemption from making payments altogether. the​ exemptions will depend on​ the​ borrowers regularity in​ the​ previous months and if​ sufficient balance of​ the​ loan has been overpaid.

Next in​ the​ list of​ advantages,​ is​ the​ facility to​ draw as​ many times from the​ amount paid. Thus,​ Flexible mortgages have the​ provision to​ allow borrowers to​ draw from the​ amount that they have already paid. This again requires the​ borrower to​ have made enough repayments before the​ use of​ this facility is​ made. While this creates a​ constant source of​ funds for the​ borrowers,​ it​ also increases the​ length of​ period for which the​ mortgage will continue and the​ interest burden.

Since there is​ a​ constant change in​ the​ balance that is​ remaining to​ be paid,​ charging interest annually or​ monthly would be costlier for the​ borrower. the​ third advantage of​ flexible mortgage deals with an​ ingenious way to​ lessen the​ interest burden. Interest in​ flexible mortgages is​ calculated daily. the​ daily calculation of​ interest ensures that periods in​ which the​ balance unpaid is​ less because of​ overpayment does not lose on​ the​ interest.

The list of​ advantages does not end here. Premature settlement of​ accounts is​ a​ facility that is​ singly available in​ flexible mortgages. Unless otherwise stated,​ mortgagees will charge a​ premature payment penalty. Flexible mortgages,​ on​ the​ other hand,​ allow borrowers to​ repay the​ mortgage before it​ is​ due without any penalties. a​ borrower who wants to​ escape the​ high interest rate will find this clause in​ their favour. a​ loan taken to​ meet an​ occasional deficit in​ finance will be paid as​ soon as​ the​ borrower receives the​ necessary resources.

Depending on​ the​ credit status a​ borrower enjoys,​ he will get flexible mortgages accordingly. the​ application procedure of​ the​ flexible mortgage is​ very similar to​ the​ regular loans and mortgages. Online applications and online processing helps in​ accelerating the​ pace of​ approval of​ flexible mortgages.

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