Once the discount period expires the interest rate will convert to the lenders SVR which can result in a sharp increase in the monthly mortgage payments due nike free run shoes. This means that borrowers should take careful note of when the discount is due to expire and prepare to remortgage to a more suitable home loan product if required.
Also, because the discounted interest rate is a variable rate, any change in the lenders SVR will affect the discount mortgages interest rate and the amount of monthly repayments due nike heels for sale. The lenders SVR will normally reflect changes to the Bank of England Base Rate (BoEBR), although this is not a requirement.
Therefore borrowers should also take note of any major changes in the base rate as it could affect their own mortgage payments nike high heels.Discount mortgages are popular with first-time-buyers who cannot afford high mortgage repayments during the early years of homeownership.
Borrowers of discount mortgages will experience a reduction in their monthly mortgage payments during the discounted period when compared to borrowers who do not have a discounted rate attached to their mortgage products. This is one of the more obvious advantages of this type of home loan product.Despite this advantage, there are several disadvantages to consider before applying for discount mortgages. The most prominent disadvantage to consider is that discount mortgages often come with stringent terms and conditions including long tie-in periods and costly early repayment charges. Therefore, if a borrower wishes to redeem their mortgage during the discount period, they may be forced to pay hefty penalties to the lender that may negate the effect of the discount received.This can effectively lock the borrower in to remaining in their property for a set period of time if they cannot afford to pay the early repayment charges if they need to sell their home and redeem their mortgage.
No comments:
Post a Comment