Mortgage lending opportunities have been reduced in recent years following the revelation that many applications for borrowing were not backed by worthy assets or a sustainable repayment plan.
Mortgages are typically provided by high street banks but the types of mortgage products available differ greatly in terms of the impact they have on individual customers.
What are the options that are out there?
Low Monthly Repayment Versus Capital Reduction
New applications for fixed rate mortgages are now vetted much more closely due to the number of customers believed to have no provision for the point at which a fixed rate deal runs out. Despite this there remains a number of fixed rate opportunities in existence and the benefit of enjoying a low monthly commitment for a mortgage can provide greater financial flexibility.
It is important to be disciplined with any plan to create a fund with which to repay the capital outstanding on the mortgage but the lack of fixed capital repayments mean that borrowers can withstand many short term cash flow difficulties without compromising the security of their home.