Flexible Mortgages

Flexible mortgages are those loans which will let a borrower increase or decrease the amount of their mortgage repayments within specific limits. This form of mortgage is somewhat new.

A flexible mortgage is available in all sizes and shapes. The more basic flexible mortgage will run along a similar line to a normal mortgage, although they will have a few extra services. For instance they will have a calculation of the daily interest charged, the choice to make underpayments on their mortgage amount, the ability to make any overpayments on their mortgage repayment as well as being able to take a payment holiday.

APPLY>>

The rates of interest on these mortgages can be either at discounted rates, fixed rates, capped rates or even variable rates. The biggest advantage of a flexible mortgage would be that this interest is mainly calculated daily or now and then monthly instead of the normal annual calculation. This basically means that any of the capital repayment for the mortgage loan will have an immediate effect on the interest charged on the remaining balance of the loan. If the borrower regularly makes overpayments, the amount of interest that they could save on their mortgage over the long term could be very significant.

The interest charged is normally calculated daily, so as soon as the borrower has made a payment they will be reducing the amount of interest payable. Because they have the ability to pay extra money on top of their normal repayment, they should be able to have quite a substantial sum saved in interest costs.

As well as this, a lot of mortgage lenders will also allow money to be withdrawn from this account up to an amount of the original mortgage balance. They will also let the borrower have payment holidays.

A few flexible mortgages allow the borrower to withdraw money that they have overpaid into their mortgage account in order to help them deal with any emergencies.

By the borrower being able to do this, it could help them cope with the fluctuations in their income or expenditure, and will also reduce their outstanding commitments without incurring a penalty if they get a bonus.

A lot of self employed individuals whose income amount changes each month will find these types of mortgages very helpful. This is basically because they are able to make overpayments when their earnings are at their highest, and reduce their payments when they fall again.

A flexible mortgage is most suited to those borrowers who have an irregular income or who are forecasting a time when they will get a reduced income, as well as those who want to decrease their mortgage loan more quickly.

However by having one of these mortgages is not solely about repaying the mortgage early. It is also based on the tailoring of the mortgage in order to suit the borrowers’ lifestyle. All of the flexible mortgages will let a borrower make overpayments and the majority of them will also let the borrower make underpayments when their money is tight. They could even let the borrower take a repayment holiday.

For instance, if the borrower is self-employed or they work on a short-term contract, then there is a very good chance that their ability to repay will change. A flexible mortgage will let them overpay when extra cash comes in (and enable them to save money on the interest payments) and decrease their payments or borrow some extra cash when they have other bills to pay or at the time when they are in-between work.

A Flexible mortgage could also be suited to those borrowers who are pregnant. For instance, if one of the mortgage borrowers is going to leave work for a while in order to bring up the child then a flexible mortgage could be taken to lessen the financial strain within this period of smaller income and increase in expenditure.

These mortgages are not always available to every customer. For example, someone who has a bad payment history, someone on DSS benefits, or someone who wants to acquire a home which is not for their main residence may have trouble in obtaining the mortgage.