Different Kinds of Mortgage

If you opt to own a house, consider getting a mortgage loan. As we know, this entails commitment on your part making sure that you will be able to meet the monthly payments all the time. Being familiar with this will help you choose the right one that is appropriate for you.


There are different types of mortgage loans. Like for example, if you decide to pay off the mortgage before the term ends then you can get flexible mortgage. There will be no penalty fees if you pay it ahead of time. Under flexible mortgage we have overpayments. This is when you want to pay over the monthly rate. Monthy or lump sum payments are accepted. When you pay lump sum, this will result to a lower rate of interest. Another characteristic of flexible mortgage is underpayments and payment breaks. This is the opposite of overpayments. You can pay lesser amount than that of the normal rate but for a fixed period. There are some mortgages that will permit you to cease your payments at a longer time. If you lose your occupation or business, this feature is perfect for you. Loan drawdown is a feature wherein you can borrow money without the lender further approving the loan. You can even borrow previous payments that were made.


A different kind of mortgage is called offset mortgage. This is when your savings account or your current account is directly connected to your mortgage. This is usually controlled by the lender. When the interest is calculated each month, the amount that you owe on your mortgage is deducted by automatically from your accounts.


If you are the type who is looking to get cash up front, then getting a cash back mortgage loan is for you. Of course this comes with an interest but this entails that the lender will pay you after signing up for the loan. Usually this is three to five percent of the overall amount that was borrowed. In cases wherein you need extra cash to pay other expenses like tuition fees and personal debts, this is a good alternative.