Home loan Options Available on the Market
Understanding the basics of home loan’s and mortgage rates. The mortgage calculator: How to choose mortgage rates products?
There are quite a number of home loan products in the market today. Because of the many options available to choose from it is generally recommended that people look to get a mortgage to their homework before signing themselves up for a loan. Making use of the many online mortgage websites for information is a great way to get started.
When out shopping for a mortgage it is essential that you understand the varying home loan products available on the market prior to making a selection. Understanding the different home loan products available helps you to ensure you select the right product for your needs and situation. Most lenders generally offer different mortgage rate options. It is important to understand these rate options since they play a huge role in your monthly payments. Arming yourself with the right information about home loan options and mortgage rates goes a long way in helping you save money.
With the numerous home loan product choices to select from in today’s lending market, it is important for you to seek independent advice from an expert so as to ensure you select the right product when getting a home loan. The following types are just brief descriptions of the mortgage products you can choose from:Standard Variable Rate Mortgage:
With this mortgage or home loan product, payments either go up or down fluctuating as the lenders standard variable rate goes up or down. Any changes occurring in the lender’s standard variable rate generally fluctuates in line with movements in bank rates. In most countries, monetary policy committees review central bank rates on a monthly basis. When trying to determine whether this home loan product is the best option for you, the question you should ask yourself is: “Can I afford to pay more when the rates go up?” If the answer to this question is yes, then this mortgage product allows you to take advantage of low payments when and if rates fall. On the other hand, if you are not able to afford payments when the interest rates go up, then this home loan product is not for you.Base Rate Tracker Mortgage:
This mortgage product is very similar to available rate mortgage however, with this mortgage product, interest rates rise and fall exactly in line with changes in central bank base rate. This mortgage product is great for those people who want to be sure their mortgage rate falls during the same time the central bank rate falls. The disadvantages of this however, are that mortgage rates increase in step when base rate raises, as such this option is not for you if you find that you locked above the base rate which may at the time be higher that the standard variable rate.Fixed Rate Mortgage
Getting a fixed rate mortgage means that your interest rate will be fixed for a set time period only, during which your mortgage rates payment will remain the same. When the fixed rate period ends, mortgage interest rate changes to lenders standard variable rate. Most lenders usually offer fixed rate mortgages for a time period between one and ten years. However, depending on market conditions, fixed mortgages can be available for a longer time period.Discounted Rate Mortgage:
Discounted rate mortgage
products are those where the lender offers a discount off their standard
variable rates for a specified or set period of time- normally one or
two years. Mortgage payments still vary in line with changes in standard
variable rate. By the end of the discounted time period, mortgage
interest rates will be similar to lenders standard variable rates.
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