Edge of Bankruptcy

Submit Enquiry




Enquiry Type


Enter Code:

The Discount Mortgage Loan

Discount mortgages over the last few years have shown to be very popular in the UK for re-mortgages and property purchases as interest rates have generally been quite low and stable. Though past indications cannot guarantee future trends.

They work by having for a period of time the "discount period" a set percentage discounted from the standard variable rate or the bank base rate normally off their standard variable rate or bank base rate. So if the bank of England base rate rise or fall lenders will usually adjust their mortgage rate, however the agreed discount on the product will apply to the revised rate until the end of the incentivised period. Then the rate will revert to the lenders standard variable rate.

For the discount period early repayment charges usually apply these may apply for the duration of the discount period or they might apply for a period beyond this date. Some discount deals may have steps in them so perhaps for the first year the discount rate will be very attractive then reduce the level of discount each year until the end of the total discount period. Known as a stepped discount. Many lenders for remortgaging offer free legal costs and valuation though there is generally a lender's fee which could be charge up front or added to the home loan on completion.

Discount deals potentially may help you to reduce monthly mortgage payments. Discounted mortgage deals aim to reduce the monthly mortgage payments for a determined period (i.e. the discount period) thus helping clients with their monthly budget. Caution should be taken as rates with this product are not protected from going up.

Though caution should be taken if the borrow is stretched and could not afford a rate rise for example a first time buyer if they decided to move they may find the early repayment charges high and they may be tied into a deal with an uncompetitive interest rate for some time. There can also be a high jump in monthly payments when the discount period ends and reverts back to the lender's higher standard variable rate.

Lee has been a UK mortgage broker for over 10 tens with a vast knowledge of buy to let, commercial, insurance and residential mortgages. http://www.MortgageHome.co.uk

http://www.mortgagebestrate.co.uk/ http://www.effectivebusiness.info/This article is free for republishing
Source: http://www.articlealley.com/article_248032_19.html

Don't Miss...
  1. Little Caution Will Let You Avail Car Loans on Cheaper Rates
  2. All home Equity Loans are secured against your home
  3. Mortgage refinance
  4. A Companion for Adverse Times-Adverse Credit Fast Loans
  5. Self Certified Mortgage
  6. The Advantages and Disadvantages of Payday Loans
  7. Low Cost Car Loans buying a car made easy
  8. Cash Loans...The good, the bad, and the debt-free
  9. Personal Loans Can Be Good But Require Caution
  10. Unsecured Loans – loan for any borrower
  11. Zip, Zap, Vroom with Auto Loans Bad Credit Online
  12. Cheap Loans for Bad Credit---Low Cost Finance Ensured Despite Adverse Credit
  13. Bad Credit Secured Loans – Securing both You and the Loan
  14. Very Bad Credit Loans – Avail The Option With Utmost Care
  15. Private Mortgage
  16. The Low-Down on Bank Car Loans
  17. Mortgage Bills Soar
  18. Unsecured Personal Loans: Stay Out Of Money Fixes Easily
  19. Adverse Credit Secured Personal Loans
  20. Reverse Mortgage Lenders
  21. Mortgage Lenders Making The Right Choice
  22. Types of Mortgage Lenders
  23. Lenders vs Mortgage Brokers
  24. How do lenders calculate Mortgage Penalities (hypotheque)
  25. Bad Credit Mortgage Lenders - Things You Should Know About Subprime Lenders
  26. Debt Consolidation Mortgage – Shred Away Your Worries
  27. Personal Loans – Lenders To Your Rescue
  28. Bad Credit Mortgage Lenders in California
  29. Plenty of Mortgage Lenders to Choose From
  30. Negotiating Terms and Interest Rates with Mortgage Lenders
  1. 125% Mortgage loan
  2. Looking for the Right Home Mortgage Loan
  3. Basic Information You Need to Know about Getting Home Mortgage Loan
  4. Tips to Help You Get the Best Home Mortgage Home Loan Refinance Rate
  5. Warning for Bad Credit Mortgage Lending
  6. How Mortgage Brokers Qualify
  7. Chosing the Best Mortgage
  8. Commercial Mortgage Solutions for Church Financing Problems
  9. Reduction in mortgage products will not affect prices, says the Council of Mortgage Lenders
  10. Bloopers And Blunders While Agreeing On A Mortgage

© Edge of Bankruptcy 2008. All Rights Reserved