What is a Flexible Mortgage?

'Flexible mortgage' is a term that's used a lot, but what exactly does it mean? A flexible mortgage allows the borrower to make extra repayments when they have the extra money and even reduce or skip payments should the need arise.

A flexible mortgage allows you to make extra payments to reduce the amount outstanding on your mortgage thereby reducing the interest you're paying or pay off your mortgage earlier than planned.

Imagine being able to save money in mortgage interest, or borrowing enough money pay off your credit cards or personal loans, or buy a new car at a low rate of interest. That's exactly what flexible mortgages enable you to do.

Flexible mortgages allow you to save money by cutting the length of your mortgage term. You can also buy yourself more time when money is tight by reducing your monthly repayments or increase you mortgage if you need to borrow money.

'Flexible mortgages', also known as 'Australian mortgages' are fast becoming the most popular way of taking out a new mortgage.

Flexible mortgages are designed for people who want the option to vary their mortgage payments to match changes in their cash flow. To varying degrees, they let you underpay, overpay, take payment holidays, pay off lump sums and borrow back overpayments.

Flexible mortgages come in various guises but they mainly allow you to make extra lump sum payments, borrow back money, allow you to take repayment holidays and also allow you to make underpayments. Some flexible mortgages will double up as a current account, where your salary is paid in monthly and so you are in effect paying off a huge overdraft.

Unlike some traditional loans that still charge mortgage interest on an annual basis, fully flexible mortgages calculate interest daily, which means that any overpayments you make are immediately credited against your loan, thus reducing your interest costs. This gives you the flexibility to manage your mortgage payments to suit your cash flow needs as your circumstances change.

A Flexible Mortgage allows you to repay capital early, take back some cash you have paid in and postpone payments. Some are run as substitutes for current and savings accounts, so all your money is working to minimise interest on the mortgage.

If you are looking for flexibility in the current mortgage market, there are two important facts to bear in mind. First, the majority of flexible mortgages tend to charge higher rates than those available on more conventional mortgage deals.

Secondly, there is little difference between mortgages marketed as fully flexible and conventional mortgages which are offering an increasing number of flexible features. So unless you want to use the full range of features offered by a flexible mortgage, you may find the level of flexibility you are after on a conventional deal at a much better rate.

Generally you can choose to have a variable or discounted rate or sometimes a combination a variable and fixed rate. By choosing to take part of your mortgage at the fixed rate allows you the flexibility to make overpayments to the variable rate option during the fixed rate period without any penalties.

A truly flexible mortgage should have all of the following options:

Interest is calculated at least monthly, preferably daily.

Overpayments are allowed penalty free.

You can take payment holidays.

You can make underpayments.

You can draw down any unused facility.

You may freely reprint this article provided the author's biography remains intact:

About The Author

John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available loans via the http://www.directonlineloans.co.uk website.

---

Buying a Home With Poor Credit Is Easier Than Ever

Buying a home with poor credit is easier than ever... Read More

Zero Down Mortgage Loans - Is 100% Financing a Good Idea and Can You Get Approved?

Are you wondering if you can get approved for a... Read More

Mortgage and Credit Card Companies Under the Spotlight on Consumer Charging

For the first time since May 1996 reports have indicated... Read More

Fixed Rate Mortgage vs. Adjustable Rate Mortgage

The most basic distinction between types of mortgages that are... Read More

Short-Term Interest Rates on the Rise; Adjustable Rate Mortgage Holders Prepare for Increase in Rate

Interest rates are on the rise and many home owners... Read More

Think You Cant Get a Mortgage?

You've finally found that dream home that you have always... Read More

Mortgage Clarksville - Find the Best Deal

Searching for a mortgage can sometimes be a hassle. Where... Read More

Is It Time To Buy A House?

At some point as you're writing out your rent check,... Read More

Home Loans For People With Poor Credit - Understanding The Requirements For a Subprime Mortgage

Home loans for people with poor credit demand that you... Read More

10 Questions To Ask Your Mortgage Rep or Banke

This post is a must read for anyone considering purchasing... Read More

Little Known Secret: Eliminate your Mortgage in 23 years or less!

Wanna know a little secret? There is an ingenious method... Read More

Using a Calculator to Assess Your Loan

Buying a house is a very important step in your... Read More

Bad Credit Mortgage Loans - Are You Killing Your Chances of Getting Approved?

When you have poor credit, your list of lenders that... Read More

Refinancing Your House - How to Know Whether to Refinance or get a Second Mortgage

Refinancing your house's mortgage is not the same thing as... Read More

Home Mortgage Quotes Online - How Do They Compare To a Quote From a Broker in The Real World?

Online home mortgage quotes are very similar to the quotes... Read More

Stated Income Mortgage Loan - Get Approved Online

A stated income or no doc mortgage loan allows individuals... Read More

How To Save Thousands in Interest on Your Home Mortgage!

So you have a mortgage on your home or planning... Read More

What is a Self-Employed Mortgage?

Self-employed mortgages, as the term implies are mortgages designed for... Read More

Home Loans: To Substantiate Financial Possibilities On Your Land

Availability of Home loans is in full bloom. They are... Read More

Buying a Home With Bad Credit - Get Approved With a Recent Bankruptcy or Foreclosure

A few years ago, if you had a bankruptcy or... Read More

What is a Reverse Mortgage?

Simply stated, a reverse mortgage is a loan that enables... Read More

Refinancing Online - Get The Best Refinance Home Loan You Can Get

When going to refinance or get a mortgage loan quote,... Read More

Home Mortgage Loan Information - Which Type of Home Loan is Best For You?

If you are considering buying a home, then you may... Read More

Home Equity Loan vs. 401(K) Loan -- Which Should You Choose

Home Equity Loan vs. 401(K) LoanYou've finally decided to add... Read More

Should You Refinance?

There are several reasons that might make someone consider refinancing... Read More

Thought You Can Go All Alone In Mortgages! Mortgage Advice Beneficial In All Important Decisions

Mortgages are easy as long as you understand them well.... Read More

Biweekly Mortgage

The biweekly mortgage has been around for years but with... Read More

Home Owner Loans Explained

How To Release Equity Locked Up In Your Home For... Read More

Real Estate Finance Strategy that Few People Consider

If you are considering a new home loan anytime soon,... Read More

Who Else is Ready to have Their Money Work Harder for Them?

What does it mean to refinance? Why would anyone want... Read More

Reaping Financial Rewards ? Bad Credit Home Equity Loans

Home is the place you inhabit. It is the place... Read More

Home Equity Loan ? Still a Better Idea Than a 401(K) Loan

Anyone who borrows money is always looking for the cheapest... Read More

Bad Credit History? How Financing and Buying a Home Can Help You Improve Your Financial Situation

Financing and buying a home can help improve your financial... Read More