| |
| |
|
|
Mortgage & Refinancing Information |
|
|
|
Flexible Mortgages - Offering Relief from the Fixed Mortgage
A pension mortgage may seem lucrative at the first sight. However, they seldom are, if the customers who took pension mortgage are to be believed. Nevertheless, before delving into the ill consequences of the mortgage, let us observe why pension mortgages seem lucrative. The most eye-catching feature of pension mortgages, which lures people, is that the pension mortgage requires to be paid out of the pension amount, which one receives on retirement. This is the feature, which drives people to go for pension mortgages. While in most of the mortgages, the customer would have to pay the full repayment amount himself; in pension mortgage, he gets assistance from the government, though not directly. To every 78p, which a person contributes to the pension fund, the government contributes 22p (This is for a basic rate taxpayer. In case of those who are high rate taxpayers, the ratio changes to 60:40. This means that for every 60p contributed by the customer, governments share is 40p). Therefore, a customer is actually paying just 78 and 60 percent respectively. Besides, the customer is also getting tax relief for paying into the pension plan. People normally do not like to burden their present life. Their optimism assures them that their future will be secure. Pension mortgage is basically an interest only mortgage. This means that they will have to pay significantly less on the mortgage as they are paying only the interest. People who desire more of immediate relief shall be pleased with the idea of paying less. However, they have to pay the mortgage amount drawn. At the end of the term of repayment of the pension mortgage, the principal amount will remain unaffected. This is because all through the period of repayment the customer has been paying just the interest. This principal amount will have to be repaid with the help of pension. Normally 25% of the pension amount is available in cash. This may be used to pay the pension mortgage. Taking these into account, pension mortgages seem to be the perfect mortgage. Neither is the customer forced into paying more on the monthly installment, nor does he face any difficulty in the final repayment. But, what of the life after the pension mortgage is paid. Is the life ahead as smooth as the repayment? No, it is not. You have retired and have lost a source of income. You are not in the prime of age to device new sources of income. You need something to rely upon once you retire. Utilizing cash from pension fund for paying a pension mortgage will be inappropriate. This reduces the amount of pension available for the customer to use. Another feature, which can be seen as exploitative, is that one cannot go for full and final repayment until the age of 50. This is because a person is not authorized to use any part of the pension fund before they reach the age of 50. Therefore, one will be able to repay the pension mortgage before maturity only out of other resources. Yet another feature of pension mortgage, which will give you goose bumps, is that there is no guarantee of the pension fund being able to pay the pension mortgage. A pension fund is an investment linked to the stock market. The amount available on the pension fund will depend on the whims of the stock market. Thus, there can be a scenario where the lump sum received through pension is not able to pay the pension mortgage in full. The borrower in such cases may be called upon to meet the deficit through other resources. A similar scenario may occur when the borrower is not able to pay into the pension fund because of unemployment or death. The house will be repossessed to pay off the pension mortgage. Taking a life assurance policy can be a counteractive measure. This will help pay off the pension mortgage at the time of repayment. There are numerous lenders in the UK offering pension mortgages. Many of the lenders are available online. After having screened the lenders and making a list of few lenders, it will be good to contact the lenders personally. Before taking a pension mortgage one must be extra vigilant. A pension mortgage can endanger your after retirement life. Unbiased and professional advice on the viability of pension mortgage for your individual case will be beneficial. James Taylor holds a Master's degree in Commerce from JNU he is working as financial consultant for http://www.chanceforloans.co.uk To find a personal loan and mortgageloan that best suits your needs visit http://www.chanceforloans.co.uk
MORE RESOURCES:
Investing - Google News |
|
|
|
RELATED ARTICLES
Real Estate Mortgage Loans Online Online real estate mortgage loans enable borrowers to be sure they are getting the best financing rates. By comparing online quotes, you can save time and money with no risk. 7 Credit Improving Steps You Must Take Before Applying For A Mortgage If you think you have good credit, think again. Chances are there is something on your credit report that can effect your credit rating; this type of news is particularly alarming if you are shopping for a loan or applying for credit. Jumbo Mortgage Loans - Getting Approved for a Jumbo Mortgage Loan Online Getting approved for a jumbo mortgage loan online is similar to getting approved for a traditional mortgage when you use a mortgage broker. However, you can expect to find lower interest rates online with better terms. High Risk Home Mortgage Lenders Online Online high risk home mortgage lenders specialize in offering loans to people with adverse credit due to bankruptcy or other financial problems. By analyzing online quotes, you can find a reasonable mortgage loan even with poor credit. Home Equity Line of Credit - Finding The Best Home Equity Lender Borrowing against the value of your home using a revolving credit account is known as a home equity line of credit. Lenders offer home equity lines of credit in several ways with either fixed or variable interest rates. Types Of Home Equity Loans There are two broad types of home equity loans:Term loans: Home equity loans of a fixed nature are also called second mortgages. For example, if you have bought a home for $10,000, and made a down payment of $1,000, and taken a mortgage for the rest and have managed to repay another $2,000, then you can apply for a home equity loan of $3,000. How Homeowner Can Save Their Home From Foreclosure Drive around and see how many signs you see that says House for Sale. How many lease purchases do you see? How many abandon houses are on your street? Our country is up against the wall with delinquence mortgages. Buy To Let Mortgages - To Let in Reasonable Capital Growth with Financial Obligation Every individual needs a home and every home needs an owner. Perhaps you are already a homeowner. How I Became a Hard Money Lender Unlike other investors, my venture into real estate was a natural extension of my secondary business as the IP Ware software developer. However, opportunity and perseverance beget wealth, or at least a decent side income. When is the Right Time to Refinance Your Mortgage? You've heard that interest rates are down and you think it could be time to refinance your existing mortgage, but the entire loan application process was so exhausting during the initial loan that you aren't sure it's worth the hassle. You could very well be right, but there are some things you can do to help decide whether it's time to refinance your mortgage. Home Equity Loans Categories Fixed Rate Mortgages: These loans have a fixed rate of interest over the entire term for which the loan has been disbursed. The term for these mortgages is typically between 10 to 30 years. Home Equity Loan - Good Choice for Luxury Purchases? Home equity loans or lines of credit have increased dramatically in popularity in recent years. One of the reasons is that interest rates are at or near historic lows; borrowing money has rarely been more affordable. Bad Credit? First Time Buyer? You Can Still Get Approved For A Home Mortgage Loan Do you have bad credit that you worry will stop you from being able to apply for a home mortgage loan? Have you given up on the dream of being a home owner? Well don't. Take comfort in the fact that there are special home mortgage loans that you can apply for, that will make sure your dreams of becoming a home owner are fulfilled!Home Loans Are Flexible - The first thing you need to keep-in-mind is that home loan mortgages are very flexible - they can be adjusted to meet the needs of any borrower. Home Equity Loan Considerations In other words, the benefit of the loan must outlast the loan period. Taking a loan for financing that elusive vacation is a strict no-no. A Home Loan Can Help You Own Your Dream Home Owning your dream home need not just be a dream. You can own it with a home loan offered by any number of financial institutions to help meet the shortfall between the purchase price of the home and the down payment that you provide. Home Loans and Mortgages - Tips to Avoid Foreclosure Today's real estate market is a volatile one; prices are at record levels and Interest rates are favorable, but foreclosures are increasing. Wages haven't kept up with home prices and some buyers who had to stretch to find a way to obtain a mortgage in the first place are having trouble making their payments. Home Loans and Mortgages - Beware of New "Mortgage Elimination" Scam The booming real estate market has allowed many Americans to become "equity rich." They may not have a lot of cash on hand, but they might have equity in their homes worth several hundred thousand dollars or more. 2nd Mortgage Loan After Bankruptcy - Get Approved Online A 2nd mortgage loan after a bankruptcy is possible in as little as two years. Refinancing your mortgage can help you make needed home improvements or pay off high interest debt. Mortgage Cycling - Brilliant or Risky With mortgage rates near 20-year lows, competition in the mortgage industry is fierce. It seems like every day a new mortgage loan strategy comes out that is suppose to be the best thing since sliced bread. Biweekly Mortgage The biweekly mortgage has been around for years but with the recent media attention to the real estate industry in general and the mortgage industry in particular, the biweekly has been getting thousands of home owners to use this simple, yet powerful, way to speed up the principal payment process. Why is this so popular? How does it work? How can I do this?Here is why this is so popular to hundreds of thousands homeowners.
|
| home | site map |
| © 2006 |
