Flexible Mortgage Features

We all know that getting a mortgage and working out the best one for you can be quite complicated. Not just is there the decision around which type of mortgage to get, over how many years, and even what sum to borrow, but you need to consider all the various fees and charges, the caps and the collars.

There are also, to be added into the mix, various so-called flexible features to consider, and depending on your needs and requirements these can make a particular mortgage more attractive to you than it might be to others, or indeed vice versa. Here we have a quick look at some of the common flexible mortgage features.

One consideration is of course Overpayments. On those occasions where you can pay off more of the mortgage than is needed by your payments, will you be charged for the privilege? And is there a cap on how much you can overpay?

Although you may think that mortgage providers want you to overpay as they get their money back quicker, actually paying off your mortgage as quickly as you can is best for you (and what is good for you is generally bad for them) and so this means there are often charges associated with making overpayments, or simply a cap on how much you can overpay in a given time period. Therefore if you think you will ever be likely to make overpayments you should ensure what the policy is on your mortgage type with regard to overpayments.

On the flip side is the notion of underpayments, or even payment holidays, which generally allow you a month or so off each year on paying off the mortgage. Again if you think there are times where you may want to take advantage of these gaps, then check with the provider to see if they are allowed and if so what the policy is (generally whilst there may be a product feature of a payment holiday, underpayments are usually only allowed if you have covered the amount with overpayments prior to making underpayments). Also remember that if you do underpay or take holidays on paying off the amount, then overall you will have to pay more as the debt will take longer overall to pay off.

Finally consider how frequently your interest is calculated. The more frequently it is calculated, the better for you, as each payment you take decreasing the total sum due will be taken into account.

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Flexible Mortgage Features