Variable Rate Mortgage in Harrow


Variable Rate Mortgages – What Are They?

A mortgage is a loan used to help people buy a home or other form of property. And just like any other form of loan, the borrower be will required to pay interest on the amount of loan that is outstanding at any single time. There are different types of mortgage but there are two ways that the interest is calculated; by means of an variable rate or by a fixed rate. In this article we will look at the Variable Rate Mortgage.

Variable rate mortgage Harrow

Variable rate mortgage Harrow – image from vorakorn

With this type of mortgage the interest rate is not known through the life of that home loan. The rate will vary depending how interest rates are set in the money markets by the Bank of England. If the LIBOR as it is known, goes up, then variable rate mortgages will rise too. Conversely, if the LIBOR declines then so will variable rate mortgages. Therefore, neither the lender nor the borrower knows for certain how much interest will be paid on any of these mortgages.

For borrowers a variable rate can be a useful mortgage if they expect that overall market rates will fall in the future. They can take the risk that rates will decline and therefore so with the interest rate on their mortgage.   However, there is also the risk that rates will increase. Currently mortgage rates are very low so the chances of a reduction in mortgage interest rates is very low. A few years ago in 2006 it was common to see rates at four percent higher or even more.

How is interest calculated for a variable rate mortgage?

Sometimes the interest is charged on the daily outstanding balance and at other times it is on the month end or even the year-end balance. By calculating interest every day, it will be fairer to the borrower since the total balance reduces every time a payment is made and, as a result, the interest will be less. For other instances calculation of interest is on monthly or annually basis. If the interest is calculated on an annual basis this can be very expensive. This is because one will be forced to pay the same interest for a complete even if the there is a reduction in Variable Rates which would lead to a lower repayment. Your mortgage broker can advise you on this aspect.

True Interest Rate

Many people think that the interest rate they see advertised is the rate on interest they are paying. However, a mortgage often has other costs associated with it. These include establishment fees, mortgage insurance, income protection and other costs which are often added to the loan. The interest is charged on the total money and this true rate of interest is known as the Annual Percentage Rate or APR. How the interest is calculated, whether daily or monthly, will affect the APR. This is the number you need to look at when you compare variable rate mortgages in Harrow.

Choosing a Variable Rate Mortgage in Harrow

If you are buying a home, then you may want to take advantage of falling interest rates in which case you should choose a variable rate mortgage in Harrow. However, as with all financial decisions, you should seek the help of professionals such as a Harrow mortgage broker. They can help you understand more about Variable Rate Mortgages. Here is some more information for you.

Mortgage Broker in Harrow


Thoughts On Using A Mortgage Broker in Harrow

A mortgage is a good way to own a home or even improving your existing one but this can only be possible if it is affordable to you. As you apply for a mortgage you need to consider whether to apply through a mortgage broker in Harrow or go direct to the mortgage lender itself.

Each of the ways have their own merits and demerits.

Harrow Mortgage broker

Harrow Mortgage broker

But what is a mortgage broker? This can be an individual or company that has been legally registered to act as a financial intermediary. They are different from a bank or lender in that they usually have access to various lending sources not just one. They build strong networks of people so that they can negotiate with lenders on behalf of their clients. They also tend to work on a commission basis paid by the lender and generally do not cost the borrower to use their services. As they only get paid when a mortgage is completed, this means that the broker looks for the most competitive mortgage lender or one that can provide a home loan which suits your own current needs. For many people, a mortgage broker may be the best choice for arranging a mortgage – here are some reasons for you to consider contacting a mortgage broker.

  1. Greater Choice of Mortgages

A broker has a much wider pool of potential sources of funding for home loans than a single bank will have. A broker can establish relationships with a wide variety of different lenders. They can recommend specific lenders t borrowers for certain situations such as if someone is self-employed. Alternatively, the broker, can negotiate a better deal than the bank might be advertising. This is because of the volume of lending they can send to any individual lender. For example, one person is a single loan whereas a mortgage broker might have ten different applicants at any one time. Clearly it will be in the bank’s interest to offer this broker a discounted mortgage rate so that they do not take those ten customers to a different lender.

  1. Saving On Fees

Another advantage of going through mortgage brokers in Harrow is that they can negotiate additional benefits for their clients. This could be legal costs, lower mortgage processing fees, or even a cash-back figure on completing the mortgage.

  1. Save On Time And Legwork Looking for a Mortgage

A mortgage is a long-term commitment and will be a very heavy costs over the life of the loan. Often the total you will pay will be double the amount you borrow. Therefore, when you are looking for a mortgage you will want to compare the mortgage deals in Harrow that are currently available. But with so many banks and lenders each of which has multiple mortgage packages on offer, this is a huge task. It

Having a broker on board, however, can help you not only save days of time but they can point you in the direction of the best Harrow mortgage rates which may not even be advertised yet. A good mortgage broker will be able to assess which home loan will suit you personal circumstances. Brokers are therefore a good link that can save a lot of time and resources to help you get the mortgage you want without much aggravation.

If you are applying for a mortgage on your own, you will require some knowledge of the mortgage industry so that you can easily meet all the requirements and documentation. But if you have not done this before it can be a considerable and stressful task. However, if you work with a mortgage broker in Harrow they will have the necessary expertise and experience to guide you through the application process and get in your mortgage application within the shortest time possible.

For more information about a mortgage broker in Harrow, click this link.

Offset Mortgages in Harrow


Offset Mortgages: An Attractive Option for Borrowers in Harrow

Most people understand the basic idea of a mortgage. You borrow money for a home loan, then pay off the loan or principle as soon as you can and also pay interest on the amount you owe and. However, there is another type of mortgage which can be very beneficial but often causes confusion to many people in Harrow. Offset mortgages can help people pay off their home loan much faster and as a result save hundreds of thousands of dollars. The post will explain how an offset mortgage can help home owners in Harrow. In the UK they are sometimes called a Current Account Mortgage.

The Basics of Offset Mortgages

Offset mortgage Harrow

Pay off your mortgage faster

Many people often have two or more accounts with a bank as well as their mortgage. For example they will have a regular current account which their salary is paid into. They might also have a savings account. Both of these will be in credit but their mortgage account is in debit. An offset mortgage is advantageous because it connects all of the balances a person has with a bank with the effect that the loan account is reduced. This does not mean that your savings actually pay-off a portion of your mortgage. The savings are simply associated with the loan to lower the overall outstanding amount that interest is charged on. Any interest that accrues in these accounts is applied to the mortgage, which helps bring down the balance.

Comparing Harrow Offset Mortgages

An offset mortgage is not the same as a standard mortgage. Therefore, looking at interest rates does not necessarily help you when trying to determine which lender to go with. Offset mortgages vary, and there are different plans to fit different people. Rather than simply examining interest rates, it is important to view the entire deal and think about what works best in the scope of your life.

Get Offset Mortgage Advice

Offset mortgages are a great option for many people, but they still only make up less than ten percent of all mortgage loans. This is because many people have not heard of them, so they decide to go with the standard mortgage because it is familiar. They do not realise all the benefits that come with an offset mortgage, like the fact that they can pay less if necessary or the amount that they could save in a year.

In order to figure out which offset mortgage to go with, consider contacting an independent mortgage broker to help you decide. Mortgage brokers are regulated, which means that they have to help you as much as they can. In addition, when explaining your options to you, the broker has to do so honestly, so that you get a clear picture of what you are signing up for. As a result, an independent mortgage broker is a great way to determine which offset mortgage deal is right for you.

Mortgage brokers and other intermediaries tend to be the two most common routes by which people purchase offset mortgages in Harrow. This is not surprising as a bank is unlikely to recommend this type of home loan since it means they will be losing many thousands of dollars in profit. More than half of all offset mortgages were sold by intermediaries in the past year, which is a significant increase from just a few years ago.

Offset Mortgage Options

There are a lot more lenders offering offset mortgages than ever before. In addition, there are a lot more options for borrowers, making this the perfect time to consider an Harrow offset mortgage. One option is known as the “buy-to-let” offset mortgage. With this option, borrowers can put their rental income into their bank account to take care of the mortgage balance. In addition, there are options that work well for those that are self-employed or that are buying a house for the first time.

In addition, borrowers have some leeway with an offset mortgage. They can pay more when they want to or less when they need to.

Summing Up Offset Mortgages In Harrow

Many people think that an offset mortgage is only right for someone that is refinancing or moving. They picture these borrowers as being more mature with a higher earning potential. That is not necessarily the case. Regardless of your situation, it is a good idea to look into an offset mortgage.

Increasingly for borrowers in Harrow offset mortgages are becoming more popular, as they are a way to take charge of their financial situation. If you need help selecting the right offset mortgage plan, speak with a local Harrow mortgage broker. He or she will be happy to go over the available options for you.

Benefits of fixed rate mortgages


Benefits of Fixed Rate Mortgages in Harrow

Fixed rate mortgage Harrow

Fixed rate mortgage Harrow

In this article you are going to learn the advantages for residents of a fixed rate mortgage in Harrow. You will also know how it helps you to properly plan your finances in the future. For many, there are some financial worries about the responsibility of paying a mortgage and you can avoid them by using a fixed rate mortgage.

What is a fixed-rate mortgage?

A fixed-rate mortgage is a home loan where the rate of interest payable on the principle remains unchanged for fixed for the life of that mortgage. The reason this is possible is because you will have a fixed payment for the life of the fixed-rate mortgage. If you take out a variable rate mortgage, the interest rate that you will be charged can go down but it can certainly go up too which will increase the amount you have to pay to your lender. But with a fixed-rate mortgage, the interest rate and therefore the amount you pay will not change.

This will be for a definite period, rather than being indefinite. For example, you may have a one year or five year fix which means that for whichever amount of time you have agreed with your bank, the rate of interest will not change. Therefore over that period, you will know the exact amount of money that you will pay every month which will make it easy for you to budget your money.

You should also know that the rate might switch to the current variable rate at the end of the fixed term. Of course, we are not sure if this will be the same, higher or lower. Therefore, you need to consider this if you are going to repay the mortgage after the fixed period is over.

Disadvantages of fixed rate mortgages for Harrow residents

For many fixed-rate mortgages, the borrower is committed to maintaining not only the payments for the period of the fix but also the amount of the loan. You agree to holding the loan for the agreed period and cannot repay it earlier. This can be a disadvantage if you receive a lump sum which you would like to put towards your mortgage. If you pay-off a part or the whole of the loan before the agreed date there will probably be Early Repayment Charges which is usually a percentage of the loan and can therefore amount to a few thousand dollars.

Who will benefit from a fixed-rate mortgage in Harrow?

Almost everyone in Harrow can benefit from a fixed-rate mortgage but for those people who are buying a home for the first time, this is especially useful. A house has some big financial commitments and costs which if you are not used to them can cause some stress with your finances. Knowing how much you will have to pay for your mortgage means you can see how much income you have left in each pay period. It is also true that for the vast majority of people, their single biggest payment each month is their mortgage. So if you can make that a known, exact amount of money for a certain period of time, then it makes it easier to save or to budget for other expenses.

Other people who can gain from a fixed-rate mortgage in Harrow are those who have a steady job. On the other hand, if you receive irregular lumps sums such as big commission payments, then you could use that to pay off a part of a variable rate mortgage which you generally cannot do with a fixed home loan.

Getting advice in fixed-rate mortgage advice in Harrow

Even though you have completed an assessment of your budget, you know your living expenses and you have checked that you can repay the fixed mortgage, it is still a good idea to consult a mortgage broker in Harrow. They will show you various repayment scenarios and give you advice on fixed rate mortgages in Harrow. There are many differences in fixed rate mortgages including interest rates, fix periods, early repayment costs and many others. The mortgage broker will have software that makes it quick and simple to find a fixed rate mortgage in Harrow to suit you. You can get more details here.

Mortgage Loans in Harrow


Mortgage Loans – An Introduction

There are many types of loans that individuals take out but for most people, the biggest is a mortgage. In general, mortgage loans are loans that will help the borrower purchase property and they are often known as home loans. These loans must be paid in a pre-determined period of time, along with the addition of interest on the loan. A mortgage is known as a secured loan because the lender takes a security over the property being purchased as collateral in case the borrower does not repay the loan. In simple terms, this means the lender can rightfully take over the property if the borrower defaults on their payments of their mortgage loan in Harrow. Sometimes the mortgage lender will needs insurance for the financial services that it offers – see below for more details.

Mortgage advice Harrow

Mortgage advice in Harrow

A mortgagee is the person that offers the loan, and the mortgagor is the person that requests and takes the loan. Both of them are legally bound by a signed contract called mortgage loan agreement which stipulates that the mortgagor will receive a certain amount of money from the mortgage. The contract also contains a promissory note which allows the mortgagee to obtain the collateral security (in this case, the property) in case the mortgagor does not maintain his promise to pay the loan on time. The normal loan period in the UK is between 10 and 25 years.

In the UK, there are 2 basic types of mortgage loans: those that have a fixed-interest rate, and those with variable-rates. The difference between these types is that the interest on the fixed-rate mortgages remains the same throughout the period of that fixed rate. This can vary from a year to the length of the entire loan. With the variable-rate mortgage, the interest rate payable will vary based on the current rates in the money market as a whole. The effect of this is that the fixed-rate mortgage offers much more security and certainty to the borrower rather than the lender, while the variable-rate mortgages offer higher security measures to the mortgagee. In short, the borrower knows how much their interest payment will be but the lender will be subject to varying rates over the length of the mortgage. For the borrower, this means they can budget more effectively since they know how much their home costs will be over the forthcoming period.

Another term is originating the loan which actually means purchasing or arranging the loan. This process is performed between the mortgagor and the mortgagee, and usually a mortgage broker is involved in the arrangement and also the lawyers for both parties. The broker acts as an intermediary between the borrower and the lender. They will advise the borrower on the type of mortgage which will be suitable to each borrower since their circumstances will be different from any other borrower. The mortgage broker will then negotiate the mortgage terms and can often reach an agreement on better terms for the borrower. The mortgage broker is paid a commission which is usually a percentage of every single home loan they arrange. The commission is usually paid by the lender as compensation for sending business to that bank.

In case the mortgage loan taken is over 80% of the property’s value, the mortgagor will have to bring in additional collateral security, such as insurance policies which are known as mortgage insurance. This is usually a one-off premium which is added to the mortgage value. Given the length of the mortgage, this can become a very expensive cost. As an alternative, if the borrower is able to make a down payment of a minimum of 20%, they will not need the mortgage insurance.

For people living in the UK there are many mortgages available from a huge range of mortgage lenders. The range is so big that a private individual would not be able to assess each mortgage provider and all of the different mortgage products they have on offer. So it is much more sensible to work with a mortgage broker who has access to software to compare the mortgage loans in Harrow to see which suits your own needs.

For information about mortgage loans in Harrow talk to a local Harrow mortgage broker. You can get more details here.