Mortgages From The Past And The Present

Mortgages From The Past And The Present

Mortgages From the​ Past And the​ Present
There are mortgages and there are mortgages .​
If you​ want to​ buy a​ house,​ it​ is​ likely that you​ will be flooded with offers from all kinds of​ finance companies and loan providers as​ they try to​ win you​ over .​
Each loan provider will advertise to​ you,​ the​ best possible loans that they have on​ offer .​
If you​ are looking for cheap mortgages,​ just relax .​
Most loan providers have an​ array of​ loans and mortgages to​ suit the​ house buyer on​ a​ budget.
These days it​ is​ hardly possible to​ fund all our necessities directly from our savings .​
Loan providers understand that and are willing to​ provide you​ with the​ ideal mortgage offer .​
Over the​ years we have seen various developments in​ the​ world of​ personal and housing finance .​
One popular development that had emerged some time ago in​ the​ United Kingdom was the​ endowment mortgage.
Although endowment mortgages are relatively unpopular now,​ there was a​ time when people thought it​ was a​ great bargain .​
Endowment mortgages allowed people to​ pay only the​ loan amount every month .​
How would this benefit the​ mortgage company? When taking out an​ endowment mortgage,​ the​ borrower was required to​ take out a​ life assurance policy for the​ period of​ the​ loan .​
These mortgages involved long term commitment and the​ duration was usually about twenty-five years .​
How did this help? the​ interest-only policy allowed the​ borrower to​ save up enough to​ repay the​ loan .​
However,​ if​ he was unable to​ do so,​ the​ life assurance policy that he had taken out would help foot the​ bill.
Sounds very convenient doesn't it? However,​ there was one tiny glitch .​
Now,​ the​ repayment of​ the​ loan would depend on​ the​ endowment funds .​
Thus,​ it​ became necessary that the​ funds into which the​ investments were made should perform well .​
However,​ one can never say when things will start going wrong.
After the​ initial popularity of​ endowment mortgages in​ a​ flourishing market where people actually got bonuses over and above their investment,​ there was bound to​ be a​ shift .​
a​ major shift came in​ the​ early 1990s,​ when the​ UK markets plunged into recession .​
There was a​ major market collapse which adversely affected many endowments .​
The crisis was so bad that companies had to​ revert to​ repayment mortgages.
Endowment mortgages have never again regained their popularity .​
And why should they? After all,​ the​ markets are flooded with all kinds of​ attractive loans .​
Figure out what kind of​ a​ loan you​ are looking for,​ and get ready to​ be bombarded by all sorts of​ offers.

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