Mortgage Market of UK
The UK mortgage market is said to be one of the most sophisticated mortgage markets in the world because it offers up to 4,000 products to its customers. Considering this fact, of course, there is huge competition in the market too. Many times, mortgage lenders have seen their star rise and plummet in this market.
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Process of Mortgages in the UK
In the mortgage market of the UK, lenders generally charge you a valuation fee. This valuation fee is for the chartered surveyor, who has to visit the property and give an estimate of its existing market value. This is not a complete survey and is the reason why a house buyer needs to know exactly what problems a house may have. The contract between the surveyor and the buyer is not confirmed after this survey.
Present Mortgage Lending in the UK
Presently, according to the facts and figures by the major British banking groups, mortgage lending in the UK rose from a fundamental 5.1 bn pounds. This is considered to be the strongest rise in 2004 after which the mortgage market boomed in the UK. Types of Mortgages in the UK
The following are the types of mortgages available in the UK: Repayment Mortgages
Repayment mortgage is a traditional type of mortgage that guarantees you own your property once the loan has been paid off. Your monthly payment includes capital repayment and interest payment so you are paying both every month.Endowment Mortgages
In endowment mortgages, you only make interest payments to the lender while additional money is invested every month into a policy that invests in equities.Individual Saving Accounts Mortgages
This type of mortgage utilizes investments based on stock markets and the growth is tax free. You can pay off your mortgage early in this type. One disadvantage is that a stock market crash can jeopardize your investments.Pension Mortgages
A pension plan mortgage is an investment based mortgage. You only make monthly interest payments. The loan is repaid at the end of the term from the tax free amount private and public companies pay as pension on retirement.Interest Rates of Mortgages in the UK
Following are the types of interest rates of different mortgages in the UK:Variable Rates
The interest rate changes with the shift in the one levied by the government.Fixed Rates
This interest rate is fixed until the maturity period of the loan.Capped Rates
You have to pay a lower rate when this interest rate falls but not the higher one when it rises.Cash Back Money
When a lender pays you the whole mortgage loan at once, the property of yours is kept with the lender.Discounted Rates
Here, the borrower is allowed a discount by the banksRelated Articles: