Mortgage Payments

Whilst it is obvious to most people that if they do not keep up with their mortgage payments they risk losing their home, there are many people who do not take sufficient precautions to minimise the chances of repossession orders being made against their home.

Taking out a mortgage is almost certainly the biggest financial commitment most of us will make, in terms of the amount that is borrowed, and the length of time it can take to repay the mortgage. Such large commitments need to be considered carefully. For example, some points to consider about keeping up with your repayments:

You can afford your mortgage 'today', but what if your income falls?

You lose your job or changes to your employment result in a fall in income;
For dual income families one of you has to stop work to look after a child or other dependant; or
You become ill and unable work.

Many of these can be insured against, but it requires planning ahead and ideally advice from a Financial Advisor.

If you are concerned about repossession or mortgage payments then contact Accuro Finance or complete the online enquiry form

What if interest rates rise?

Mortgage payments (where you are not on a fixed rate) will vary in line with market lending rates and the mortgage interest rate charged by your lender. Mortgage interest rates are normally linked to the base rate set by the Bank of England. Many mortgage providers will apply some or all of any changes in the base rate to your mortgage.
If your mortgage rate is fixed you may find this is only for a certain period after which subsequent changes in interest rates will affect your payments.
Although interest rates have been relatively stable over the last few years, this cannot be taken for granted in the future and the current credit crunch is proving to be an especialy worrying time. Remember in the 1980s and 1990s interest rates fluctuated hugely, and over a few years almost doubled from 7.5% to 15%. Could you afford your mortgage if the payments doubled today?

If you are concerned about interest rates the contact Accuro®Finance or complete the online enquiry form

Types of Interest Rates and Mortgage Features

Choosing between mortgages and interest rates on offer can be confusing. How do you know which interest rate is best for you? And what type of mortgage would be most suitable?

So, what types of mortgages are on the market? There are two important decisions when choosing a mortgage interest rate package; whether to choose a fixed or variable rate mortgage, and whether to choose a short or long term deal.

Standard Variable rate - (Interest only or repayment mortgage) - Your payments go up or down when the lender's mortgage rate changes. (Mortgage rates tend to move in line with the Bank of England base rate but there is sometimes a delay).

A 'tracker' (changes in line with a base interest rate), or tracker mortgage - A variable rate loan where the interest rate is a set amount above or below the Bank of England or some other base rate and so always 'tracks' changes in that base rate.

Fixed interest rate (limited period) or fixed rate mortgage - Your payments are set at a certain level for a set period of time - for example, two years, five years, ten years or even longer. Unless the rate is fixed for the term of the mortgage, you are usually charged the lender's standard variable rate at the end of the fixed rate period. Chosen when you need to know that your monthly outgoings are not going to change for a fixed period of time.

Discounted interest rate - Your payments are variable, but they are set at less than the lender's standard variable rate for a set period of time. At the end of this period you are usually charged the lender's standard variable rate.

Capped rate - Your payments are variable and often linked to the lenders standard variable rate, but capped so that they do not go above a set level (the 'ceiling' or 'cap') during the period of the deal. At the end of the period, you are usually charged the lender's standard variable rate. If the lenders standard variable rate falls below the cap then the rate charged will be this lower rate.

If you are concerned about your mortgage then contact Accuro Finance or complete the online enquiry form