Different Types of Available Mortgage
Mortgage loans allow individuals to pay for a house in installments.
After you apply for a mortgage, the mortgage lender will hold ownership of the property until you as the buyer can pay the installment off. However, you can still occupy the property as if you were on your own. There are a number of mortgages on offer and you may want to choose the one that best suits your needs. However, it would be better to hire mortgage broker, so you will know the best type of mortgage below that fits your needs.
Fixed rate mortgage
With this package, your payment is fixed and there will be no change in the amount you are required to pay even if you are struggling financially. Often there are penalties involved if you do not pay on time or if you terminate the initial mortgage.
Rate variable mortgages
This type of package seems very popular with homeowners. In this case, the lender determines what the interest rate allows for more flexibility in payments. However, there may be a delay as mortgage providers may change rates over time.
These mortgages are fixed at a fixed percentage but they change from time to time to adjust for the tribal changes made by the bank. What this means is that your payments can increase if the mortgage interest rate rises. However, you will pay less if the rate decreases. If you think that the financial climate is not doing well and this will lead to lower mortgage rates, then this is a good package to gamble on.
This type of mortgage will guarantee your ownership of your home in the long run, but there is only one more cost-catchment mortgage payment. Monthly payments will go towards clearing interest charges and repay your initial loan. This package is good if you are facing financial problems or if you expect future wage increases.