A repayment mortgage is the type of mortgage that most people think about. The idea behind a repayment mortgage is that you pay monthly for a set period and each payment consists of an element of capital and interest.
A repayment mortgage is one for which each monthly payment contributes to the capital and the interest that is to be repaid over the term of the mortgage. Assuming that the contractual payment is made each month for the full term of the mortgage, at the end of the term the mortgage will be fully repaid.
With a repayment mortgage your monthly payments consist of both the capital amount borrowed together with accrued interest. Your lender will keep you advised about how much you have repaid.
Initially, most of your monthly payment pays off the interest and what's left goes towards reducing what you've actually borrowed. As time goes on, the 'balance' changes and as the interest charges reduce, more and more of your monthly repayment is used to reduce the loan.
A repayment mortgage is a mortgage contract under which the customer is obliged to make payments of interest and capital which are designed to repay the mortgage over the stated term. As long as you keep up the payments, the whole loan will be paid off over the term of the loan. Many people opt for a repayment mortgage on for this very reason - a repayment mortgage is the safest option as it means that you will have that guarantee.
With a repayment mortgages the entire mortgage is paid back over an agreed period of time. This is referred to as the mortgage's term and is usually set at 25 years. When the mortgage's term has come to an end, providing all the repayments have been met, the property will be in the hands of the homeowner.
A repayment mortgage means that each month you make a payment to your lender which consists of both a repayment of part of the loan and a payment of the interest on your loan.
You are reducing your debt every month, and as a safeguard you will need to arrange life assurance, which is often a compulsory requirement with mortgage lenders so that should you die before the end of the term your mortgage will be paid off.
Deciding which mortgage is best for you depends on a few factors, which is why it's important for you to do your financial homework first. Repayment mortgages are regarded as the safest option, hence their appeal to the more cautious investor. They are certainly much easier to understand and you should have no trouble working out your monthly incomings and outgoings.
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.
Home equity loan information can sometimes be confusing and misleading.... Read More
Doesn't Residential mortgage give the impression that they are a... Read More
The simple definition of a "non-conforming home loan" is: You... Read More
I decided to write this article today after closing a... Read More
When you are hunting for a mortgage, you will find... Read More
You are comfortably wedged in a mortgage deal, paying the... Read More
The most common type of home equity loan is the... Read More
How To Release Equity Locked Up In Your Home For... Read More
Obtaining a home equity loan does not have to be... Read More
When the time comes to do work around the house,... Read More
If you have seen all the advertisements regarding refinancing your... Read More
Buying a home vs. renting is a big decision that... Read More
Just starting to shop for a new home? Do you... Read More
Raising capital is integral for growth and expansion of an... Read More
Being self employed has many benefits. When you are self-employed,... Read More
Chances are you may need a little extra money to... Read More
A home equity loan is a loan based on the... Read More
Thanks to the combination of low interest rates and skyrocketing... Read More
If you have bad credit history and are looking to... Read More
You've found a house that is perfect for you. It... Read More
While most multi family properties are designed to allow the... Read More
Whether you are a first time home buyer or a... Read More
Mortgage rates are rising and it's becoming more difficult for... Read More
Buying your first home will likely be the biggest and... Read More
So you have a mortgage, and you need to refinance... Read More
Here are some of the benefits to doing your home... Read More
Interest rates are at an all time low, making now... Read More
If you are transferring to the Kings Bay Georgia Naval... Read More
The booming real estate market has allowed many Americans to... Read More
This might not be the front page news but it... Read More
If you owe 40 percent or less of your original... Read More
Add the term 'online' and it will open for you... Read More
Property website Rightmove has released its latest house price index... Read More
Sometimes so much is talked about how to solve the... Read More
There are many mortgage products available on the market today.... Read More
Asking yourself, "Is a home equity loan right for me?"... Read More
You've been looking at houses for months, and finally you've... Read More
A remortgage is changing your mortgage without moving your home.... Read More
It is likely to be one of the largest purchases... Read More
Home equity loans give individuals a tool to extend their... Read More
Applying for a home loan may not be the most... Read More
Everybody wants to own a house because it is something... Read More
1. Never discuss your household finances over the phone with... Read More
Buying a home remains the great American dream. Home ownership... Read More
If you've got a wallet full of credit cards, and... Read More
This article will help you understand the differences between a... Read More
Adjustable rate mortgages can be very tempting to home buyers,... Read More
A mortgage is a loan, usually from a bank, finance... Read More
"We will help every Council Tenant to become Home Owners"... Read More
The prospect of mortgage debt elimination is something that many... Read More
A home equity loan is simply borrowing on the difference... Read More
The process of obtaining a mortgage or home loan can... Read More
A pension mortgage may seem lucrative at the first sight.... Read More
When financing a home purchase, the kind of mortgage you... Read More
Have you ever noticed how hard it can be to... Read More
So you're thinking about building your own house, are you?... Read More
USA ECONOMIC CONDITIONSToday's sluggish economy has left millions of people... Read More
When you need a mortgage -- either because you are... Read More
Have you been turned down for a home loan recently... Read More
Mortgage would have never happened, had mortgages been a no... Read More
When you go to the bank to get a mortgage,... Read More
Are you wondering how to get the best Home Equity... Read More
Hopefully your ego has never had to experience the words,... Read More
I decided to write this article today after closing a... Read More
By refinancing your property online you can take advantage of... Read More
If you want a low interest, low payment mortgage refinance,... Read More
Mortgage Refinance |