Choosing From Different Types Of Suitable Mortgage

The term mortgage is defined as the loan for a property such as land or house which has to be paid within a specified period of time. It is generally a loan of money. The mortgage is just a security for the loan that the lender makes to the borrower. Mortgages have numerous shapes and sizes. Each shape and size has its own pros and cons. People need to do extensive research to find which type of mortgage is suitable for them and which bank, savings and loan, mortgage bank, or finance company provides the best terms for that type of loan. The internet makes this process easier for the people. The most common types of mortgages are fixed rate mortgage, discounted mortgage, capped rate mortgage, cash back mortgage, flexible mortgage and tracker mortgage. The fixed rate mortgage is apposite for the people who prefer to know approximately what their monthly outgoings will be. They are the traditional loans that have a fixed interest rate for 30, 20, 15 or 10 years. The monthly payment of interest and principal never changes in this type of mortgage. The fixed rate mortgage is the best option for certain cases.

The next type of mortgage is an adjustable rate mortgage. They usually start at a lower interest rate. But the type interest rate and payments fluctuate depending upon the market interest rates. It is adjusted annually. These types of mortgage are very much popular among the people who expect increasing income over the next few years. Capped rate type of mortgage is the combination of fixed mortgage and adjustable rate of mortgage. Cash back mortgage is the best type of mortgage for the first-time buyers. It is also suitable for the people who are on a tight budget or has taken out a loan to use as a deposit for the mortgage. The lender will compensate a certain amount of the mortgage loan, once the deal is done. This may be depending on the lender and the size of the mortgage. Flexible mortgage is useful for the people who are taking time out to study. People need to agree the payment holidays with the lender. These holidays may either increase the re-payments later on or extend the loan period. Jumbo loans are a larger mortgage than the average loan. The people may choose this option if they need a huge amount of money as a loan.

Before getting or applying a mortgage, the first thing the people need to do is save enough money for the deposit. Then they have to think for a way they can repay the loan amount for the mortgage. The best option is the repayment loans. It is also called as capital and interest loans. In this type part of the loan is paid back every month. The whole loan is repaid at the end of the term. Once if they have chosen the type of mortgage and the repayment way, then they require finding a lender. The lender will be able to inform them how much amount of loan they can borrow. The amount of the loan is based on three factors. They are borrower’s income, their existing debt and the size of their deposit. The mortgage checklist involves the items such as saved deposit, the amount they can pay each month, the types of mortgages available, etc. A mortgage lender is the critical one to the cost and success of the home purchase. The level of service of the lender can make the difference between a happy new homeowner and a disappointed buyer who missed out on a home.

A knowledgeable and professional mortgage can help the people to set the goals and secure a loan that is suited to their needs. Banks and credit unions to mortgage bankers and mortgage brokers and many other institutions can provide the home loans for the people. An example of a mortgage broker can be found here. The important thing the people should keep in mind is the difference between the mortgage lender and mortgage broker. Mortgage lenders specialize in making mortgage loans. They are associated with banks. Mortgage lenders deal with borrower’s usually through retail banking branches or through a mortgage broker. Lenders have both retail and wholesale divisions. Retail divisions provide the loans to borrowers through the bank branches. But the wholesale division’s deals are usually done through the mortgage brokers. Mortgage interest rates are offered to the brokers. The interest rates are lower than the retail rates offered to the public. The qualifying standards and loan programs may be varied from one lender to the others. Mortgage brokers can access to a large number of lenders. Brokers simply matches the lenders’ mortgage offerings with the borrowers’ profile and needs at a favorable rate. Brokers do not approve the loan of the borrowers. They simply find a lender who will approve the loan.

Finding good lenders is very much important before approaching the mortgage. A good lender can approve the loan for the people and offer advice on the ways to improve their credit and describe the mortgage payments with the rest of their financial plan. You can ask your friends or colleagues for recommendations. They may approach their friends who have recently made their home purchases and get the details of the mortgage broker from them. It is the best way to search the mortgage broker on their own through the internet and the telephone. The goal of the borrowers is to get the trustworthy answers about the interest rates and loan choices. They may do research and ask them about their dealing offers and the conditions. The people should feel free to ask questions because this property loans is likely the part of the life for the next 25 to 30 years. If any mortgage broker offers a special deal, get the details of the special conditions. People should ensure that the mortgage broker belongs to an independent complaints scheme in case anything goes wrong. People should select their lenders. They must not allow the lenders to choose them. People should focus on them not on the loan.
Read more…

Posted by admin – November 27, 2012 at 11:56 pm

Categories: Finance   Tags: ,

Business Focus on AvaFX

Given the amount of pressure AIB in particular seems to be under, Hobbs is not alone in his crusade for fines and other penalties to be imposed in an effort to curb what many view as a culture of profit at any cost to vulnerable customers. According to an article in, the IFSRA says it is investigating the number of cases of mis-selling, particularly to the elderly.

“We are aware of a sufficient number of cases regarding the sale of investment products to older investors. As a result we are in the process of contacting banks, insurance companies and investment intermediaries on this issue” the IFSRA said, adding that it was precluded from commenting on certain cases.

“We cannot discuss individual firms or products, but product costs, risks and benefits should be explained clearly and not hidden in small print or tied up in confusing jargon.”

However, the IFSRA has acknowledged that new sanctions contained in the Central Bank and AVAFX (refer here for more about avafx:, which is expected to become law this year, cannot be applied retrospectively. “It is important to note that we do have the power to retroactively investigate inappropriate selling of products and take action where appropriate as, for example, in our codes of practice, and to issue regulatory directions to institutions to stop certain practices” she said.

This is cold comfort to those investors who feel the banks deserve more than a slap on the wrist. But, if mis-selling is found to be systemic, the impact felt at boardroom level would likely be seismic.

One broking analyst who asked not to be named said that further bad publicity for AVAFX may leave the bank vulnerable to a takeover as it would depress its share price, inviting would-be predators.

“The numbers quoted are significant and if there was any more bad news it would certainly be a big negative. There is no doubt that a lot of people are looking over their shoulders at the moment.”

The number of complaints about mis-selling to the Ombudsman for the Credit Institutions has risen dramatically in recent years and accounted for a third of the 1,064 complaints the office received last year.

However, as experience in the UK has shown, this could turn out to be the tip of the proverbial iceberg as consumer awareness of the issue grows.

For consumers and financial institutions like Ava FX, the effects can be felt for years afterwards. The Consumers’ Association in the UK estimates more than 5m people may have been mis-sold endowment mortgages and could be entitled to compensation.

British-based financial institutions had been forced to pay out Pounds 225m (E335m) in compensation for mis-selling these products.

A similar debacle proved even more costly. The mis-selling of pensions cost the financial institutions who sold them more than Pounds 11 billion in compensation. Individuals were deceived as to the benefits of individual accounts by financial institutions. High-pressure sales tactics were used to persuade workers to switch out of occupational funds and into unsuitable individual account plans. The fear is that some Irish financial institutions may now be sitting on a similarly ticking time-bomb. Read more…

Posted by admin – November 7, 2012 at 4:03 pm

Categories: Finance   Tags: