OLD GREY AND STILL PAYING THE PENSION-THE INTREST ONLY MORTGAGE
Intrest only mortgages seem to be a resnably good deal especially fror first time buyers until you realise you are only making payments on the intrest and you are still faced with repaying the original purchase price.
This is the dilema millions of first time entrants and already existing property owners still face ,a growing burden to incresinly deep into your pensions and savings in order to make repayments while still stuck with with owing the original purchagse price to the lender.
A survey by mortgage broker Purely Mortgages reveals that nearly a quarter of homebuyers - 2,300,000 - in the uk are repaying only the interest on their home loans.
It means that despite years of shelling out on their homes, they will end up owing exactly what they did when they first bought it.Interest-only deals, this is fully understandable as this tends to ppeal to those on budget Latest figures from the Council of Mortgage Lenders show that one in seven first-time buyers and more that a fifth of home movers are opting for an interest-only loan.
So what is An Intrest Free Mortgage in the True sense of the Term?
An interest-only mortgage means your monthly payments cover only the interest on the loan. They do not pay off the amount you owe. So, at the end of the mortgage term, assuming you have made all the interest payments, you will owe the same amount that you borrowed at the beginning. You need to have a lump sum available to pay the mortgage back in one go at this time. Make sure you make arrangements to pay off the loan when the mortgage ends. If you don't, you could lose your home
So if you do have a concern with the burden and intrest only mortgage places on you it would be wise to consider switching to a capital repayment mortgage as a regular review of your ability to pay ensures you are a 100% sure you can continue to maintain the payment of the original capital
Though you pay an initial administration fee for switching to a capital repaynment vehicle it is definately worth as it would eventually end of saving you hundreds of pounds
This is the dilema millions of first time entrants and already existing property owners still face ,a growing burden to incresinly deep into your pensions and savings in order to make repayments while still stuck with with owing the original purchagse price to the lender.
A survey by mortgage broker Purely Mortgages reveals that nearly a quarter of homebuyers - 2,300,000 - in the uk are repaying only the interest on their home loans.
It means that despite years of shelling out on their homes, they will end up owing exactly what they did when they first bought it.Interest-only deals, this is fully understandable as this tends to ppeal to those on budget Latest figures from the Council of Mortgage Lenders show that one in seven first-time buyers and more that a fifth of home movers are opting for an interest-only loan.
So what is An Intrest Free Mortgage in the True sense of the Term?
An interest-only mortgage means your monthly payments cover only the interest on the loan. They do not pay off the amount you owe. So, at the end of the mortgage term, assuming you have made all the interest payments, you will owe the same amount that you borrowed at the beginning. You need to have a lump sum available to pay the mortgage back in one go at this time. Make sure you make arrangements to pay off the loan when the mortgage ends. If you don't, you could lose your home
So if you do have a concern with the burden and intrest only mortgage places on you it would be wise to consider switching to a capital repayment mortgage as a regular review of your ability to pay ensures you are a 100% sure you can continue to maintain the payment of the original capital
Though you pay an initial administration fee for switching to a capital repaynment vehicle it is definately worth as it would eventually end of saving you hundreds of pounds
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