Think carefully before securing other debts against your home.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Mortgage Glossary
- Mortgage Glossary Choices:
- 100% mortgage
- Arrears
- Buy to let
- County Court Judgements
- Defaults
- First time buyer
- Flexible mortgages
- Individual Voluntary Arrangements
- Keyworker mortgages
- Let to buy
- Non status
- No deposit mortgage
- No proof of income
- Self build
- Self certification
- Self employed mortgage
- Underpayment
Flexible mortgages
If, for whatever reason, your income is erratic, there are a number of limitations to the standard types of mortgages available.
Flexible mortgages let the borrower make both over and underpayments into the account.
Possible disadvantages of flexible mortgages are:
• they tend to have a higher interest rate than non-flexible
• full flexibility only becomes available after a probationary period and not all flexi-mortgages are equally flexible
• flexible mortgages require a certain amount of financial discipline. By using the underpayment option or taking payment holidays, the amount not paid remains outstanding and will be added to the total amount owed - on which interest is charged. With enough credit you can even take a payment holiday or decrease your monthly payment, especially useful when the budget is tight - say at Christmas or with the arrival of a new baby. However, by using the underpayment option or taking payment holidays, the amount not paid remains outstanding and will be added to the total amount owed - on which interest is charged.
One feature of a flexible mortgage is that lump sum withdrawals can be used to pay off personal loans, credit cards and the like. However, you should be aware that this action could result in you paying more over the total term of the mortgage in interest. (as the original term may be increased to fit in with the mortgage)
Please also note the following:
• securing a previously unsecured debt could result in you losing your home in the event that you cannot repay the loan.
• If the you are experiencing payment difficulties with credit cards/loans, you should always find our whether it is possible to negotiate an arrangement with your existing creditors, before considering adding the credit cards/loans to a mortgage.
• A higher lending charge may become payable as a result of debt consolidation.