Mortgage FAQ's

Mortgages FAQ’s

I think you’ll agree with me when I say…

There’s a lot to learn when it comes to mortgages.

However, getting the right information on mortgages can be a challenge.

Lucky for you, here’s a Mortgages FAQ.

Hopefully, you will find the answer you are looking for. If not, please be sure to see below to find more information on your mortgage or chat with us.

Your Mortgage Questions and Answers

Equity Release for Pensioners

What Happens When My Fixed Term Mortgage Ends

Q: What Happens When My Fixed Term Mortgage Ends?

A: If you decided to go with the fixed-rate mortgage, your interest rate¹  is locked in for a fixed period. In other words, the interest rate – and subsequently, your monthly mortgage repayment – will remain unchanged for an agreed period, but eventually, all good things come to an end.

How Does 60 Lifetime Lease Work

Q: How Does 60 Lifetime Lease Work?

A: The Home for Life Plan is a lifetime lease for people aged 60 years old +. Using the scheme means you could pay up to 59% less than the estate market price to live securely in your new estate without rent, mortgage, or any interest repayments for your lifetime.

Can You Pay Off a Mortgage with a Home Equity Loan

Q: Can You Pay Off a Mortgage with a Home Equity Loan?

A: If you’ve built up equity in your property but still have a mortgage balance to pay off, you may want to use the home equity line of credit (HELOC) to decrease your regular payments and the overall interest you pay on your loan.

Q: Is It Smart to Settle Your Estate?

A: According to most financial experts, paying off in advance actually comes with an expense to your bottom line. For investments to make more sense than settling a pledge prematurely, the annualized return periodically would only need to make more than the pledge oker.

Q: Is it a Nice Idea to Settle a Mortgage in advance?

A: By paying off in advance, you will be cutting back on the additional oker expense that you would incur in your remunerations. The accumulation can be significant and will grow with the prepayment amount. The lower your oker stipulation is, the less you stand to profit.

Q: How Can I Settle in 7 years?

  • Comprehend how a mortgage functions. In most situations, your remunerations remain the same, but the balance you owe decreases
  • Get excited to remunerate your lease. You have to be on a mission.
  • Do the math
  • Make it happen

Q: What Happens When a Mortgage Expires?

A: When your current lease term reaches its maturity date, you’ll have to renew the outstanding balance for another term. It’s a process you’ll likely do several times until you pay off your mortgage entirely. Just before your term expires, your current plan provider will send you a renewal offer in the mail.

Q: What Happens at the End of the Mortgage Term?

A: If you’re on a standard repayment mortgage plan, then it’s likely that you’ve paid off your secured loan at the end of your term that you agreed on in your contract at the beginning – unless you made over-payments, fell behind, or extended your loan term. Once you reach the end of your interest-only mortgage term, your debt will still be outstanding.

Q: Can You Pay Off Mortgage at End Term?

A: It depends on the type of term you opt to take (open or closed). You’ll have to consider the prepayment charge should you choose to pay off your mortgage before the end of the mortgage term. Each of these choices may affect how rapidly you’ll be able to pay off your mortgage and how much interest you will have to pay.

Q: Can I Get a Mortgage if I’m Retired?

A: Financial planners²  and mortgage lenders say, yes. Under the Equal Credit Opportunity Act, plan providers can’t discriminate against borrowers based on age, which are usually retired, borrowers. Like the working mortgagors, you need to show that they have good credit, not too much debt, and enough ongoing income to recompense the mortgage.

Q: Can I Get a Mortgage at 55?

A: Age is a number, or so the saying goes. However, it does matter if you’re applying for a home equity loan. If you’re aged 55 and above and need a mortgage or to re-mortgage into retirement, you may hassle to get the mortgage you want.

Q: Can a 60 Year Old get a 20 Year Mortgage?

A: Retirees every so often assume that they’re eligible for a 30-year mortgage. Legally, however, banks can only offer mortgages based on one’s financial qualifications alone. It means applicants can’t be turned away based on their age, whether they are 50, 60, or even 90 years old.

Q: Can You Get a Mortgage At 60?

A: For mortgages over 60 – You’ll only be able to apply for shorter mortgage terms and may need to prove that you have your pension and investment income. When it comes to mortgages for over 70 – It’ll be tough, but not impossible, to get a lease. However, if you are a proprietor, it may be possible to get a secured loan.

Q: Can I get Interest-Only Mortgage at 60?

A: Some mortgage plan providers insist that you pay off a retirement interest-only mortgage by the time you’re a particular age. It can be as low as 80 or as high as 99years. Moreover, the amount you can borrow with an equity release lifetime mortgage  isn’t interconnected to your monthly income – only to the value of your residence and your age.

Q: Can I get An Interest-Only Mortgage at 65?

A: With the mortgages from various equity release companies, that are mostly aimed at borrowers aged 55 to 85 (when you’re applying), repayments can be extended up to the age of 99. In both cases, the highest amount you can borrow is 60% of the value of your estate if you go for interest-only but 75% with the repayment mortgage scheme.

Q: Can I Extend My Interest-Only Mortgage Term?

A: It’s possible to ask your plan provider to lengthen your term to offer you more time to save for the lump sum. It could give you the chance to switch at least some or the entire loan to a repayment mortgage, as by extending the term, your monthly repayments will be lower and more reasonably priced.

Q: Do Banks Still Do Interest-Only Mortgages?

A: Supposing you make all your payments, you’re guaranteed to pay off the whole loan amount at the end of the term. With an interest-only mortgage plan, you only pay the interest on the lease. At the end of the mortgage term, you’ll still be obligated to pay the initial amount you borrowed. You can find out how much you could get by using our interest only lifetime mortgage calculator.

Q: Can I Put My Mortgage On Interest-Only?

A: The government and financial institutions are now restricting how much of your mortgage you can pay interest only. Plan providers are only allowing you to pay up to 90% of your mortgage interest only, which means if you took out a 110% LTV mortgage when the market was booming, you’d still have to pay the capital on the balance of your mortgage.

Q: Are Interest-Only Mortgages a Good Idea?

A: Interest-only mortgages don’t often suit most borrowers. Therefore, make sure you only get one if you’re aware of the risks and have a repayment plan to save enough capital by the end of the term. You’d need to be able to make a profit from your investment vehicle and preferably have a backup plan to aid you in paying off the loan.

Q: Should I Pay Off My Interest-Only Mortgage?

A: With an interest-only mortgage, you pay off the interest on a lease, but not the money borrowed. It means that the monthly repayments are mostly a lot lower than those on repayment mortgages. As a result, at the end of the mortgage term, you will need to find a way to pay back what you owe in a single lump sum.

Q: What are the Disadvantages of Interest-Only Mortgages?

A: Some of the drawbacks to Interest Only Loans include:

  • The rising mortgage rates increase risk if it’s an ARM
  • Many people tend to spend the extra money extravagantly instead of investing it
  • Most people can’t afford principal payments when the time arrives, and many aren’t disciplined enough to pay extra toward the principal
  • The income may not grow as rapidly as you planned

Q: How Much Can I Borrow on an Interest-only Mortgage?

A: The maximum loan for interest-only mortgages offered by most lenders has gone up from 50% to 60% Loan to Value (LTV). It means that you can borrow up to 60% of the value of your residence on an interest-only basis. You can also pay back up to 60% of the mortgage on an interest-only basis.

Q: Can I Overpay an Interest-Only Mortgage?

A: if you make overpayments, your plan provider should apply these to your outstanding debt, and cut your regular interest payments from the next calculation date. If your over-payment significantly dents the debt, it may make moving onto a repayment mortgage a reasonable decision.

Q: Can You Re-Mortgage at the End of an Interest-Only Mortgage?

A: As per federal law, your mortgage contract will say you have to repay the full amount at the end. So if you have an interest-only re-mortgage, you can’t rely on your income provider coming up with many options for you at the end, let alone a great one like allowing you to carry on with making your current monthly mortgage payments.

Q: Is Interest-only Mortgage Better than the Repayment Option?

A: It’s more expensive than the repayment plan. With a repayment mortgage every year, the amount of interest you owe decreases as you’re paying it on a smaller and smaller loan. However, with an interest-only mortgage, the money owed doesn’t shrink, so you keep on paying interest on the full amount.

Q: Does the Interest-Only Mortgage Affect Credit Rating?

A: No. Switching your mortgage plan to interest-only won’t affect your credit file any differently than the repayment option – if you’re late, it’ll have a negative effect. If you’re early, it’ll have a positive one. The monthly payments will be less interest-only – but overall, you will pay more.

Q: How Do I Build Equity in My Residence?

A: There are seven steps to build equity and some of these include, but are not limited to:

  • It would be great if you made a big down-payment
  • Your equity represents how much of your dwelling you own so focus on paying off your pledge
  • Remunerate more than you need to
  • Refinance to a shorter term
  • Renovate the interior of your habitation
  • Wait for the value to rise
  • Add curb appeal

Q: What’s Considered an Excellent Equity?

A: It is the market value of a proprietor’s unencumbered ownership in their actual property, that is, the difference between the fair value and the outstanding balance of all liens. In economics, however, it’s known as the real property value.

Q: Will Mortgage Rates Go Up in 2020?

A: According to most industry analysts, financial companies expect the average rate for 30-year fixed mortgages to hit 2.5% in 2020. Presently, it’s around 2.7%. The 10-year Treasury yield — which mortgage rates tend to follow — could surge close to 2.7% before dropping back down to 2.05% by the end of 2020.

Q: Can I Sell My House without Equity?

A: Yes. However, selling your home can be a drawn-out and overly complicated matter. The process can become even more challenging if you owe more on your mortgage than the price your estate is currently valued at. Equity in property is one of the most significant benefits you can have as a proprietor during the process of selling your house. There are five ways you can sell your home without equity:

  • You can sell through a realtor
  • The short sale or compromise sale
  • Put it up for sale on your own without asking for assistance from a realtor
  • You can sell to an investor
  • There are also companies on the national level that buy homes without equity

Q: Is It Worth Fixing Mortgage for 10 Years?

A: Your monthly payments will be higher, at least at the beginning. Your interest rates will be higher on a 10-year fix than when you have a shorter-term deal, pushing up your monthly repayments: the lowest mortgage rate for a 10-year-fix (60% LTV) is 2.49%, while for a 2-year-fix (60% LTV) it’s 1.35%.

Q: Can You Still Get Interest Free Mortgages?

A: By having an interest-only mortgage, your monthly payments pay only the interest charges on your mortgage, not any of the initial amounts borrowed. It means your payments will be less than on a repayment mortgage, but at the end of the loan term, you’ll still owe the initial amount you borrowed from your provider.

Q: Can I Re-Mortgage My House If I Own It?

A: Yes, you can, re-mortgage. You may think your situations are unusual, but, whatever your circumstances, lenders will usually consider an application. So, if you don’t have an outstanding mortgage, and you own 100% of the equity in your property, your chances of re-mortgaging are high. The mortgage deals presented to you will depend on how much you want to borrow as a percentage of the current value of your estate, which is known as the loan to value ratio (LTV)

Q: Can You Have Two Primary Residences?

A: The short answer to this is that you can’t have two principal residences. You’ll need to figure out which of your houses will be considered your principal residence and file your taxes accordingly. However, while you may not be able to claim multiple primary homes for tax purposes, the IRS does offer you tax deductions if you own several homes.

Q: How Much Deposit Do I Need for a 2nd House?

A: Most second home mortgages need at least a 25% deposit, and you may require even more than that if your present income doesn’t cover both mortgages at the same time. In addition to this, your income will be even more significant in the application for a second home mortgage. 

Q: Can I Re-Mortgage with a Poor Credit Score?

A: The simple answer to this question is yes. However, if you have more than a minor issue with your credit score, then you’re unlikely to get a re-mortgage on the high street.

Popular Questions Everybody Asks

What Percentage Can You Borrow On Equity Release?

Is It A Good Idea To Release Equity?

Can You Move House With Equity Release?

How Long Does It Take For Equity Release To Go Through?

What Happens When My Fixed Term Mortgage Ends?

How Does 60 Lifetime Lease Work?

In Conclusion

We all deserve a break and with retirement comes free time. So, who says you can’t relax, travel, work on your various duties and enjoy your golden years hassle-free?

Well, a mortgage can be one of the best financial decisions you will ever make in a bid to enjoy the pleasures and wonders of life. Nevertheless, it can also be quite challenging to understand its form. Thus, if you didn’t find the answers you were searching for, don’t worry. You can click here for more information on how much equity you can release and chat with an expert for free.

The right mortgage can be one of the best financial decisions you can make to maintain your lifestyle after retirement. However, it can also be quite challenging to understand its form. So, if you did not find the answers you’re searching for, do not worry. You can click here for more information on how much equity you can release and chat with an expert for free.


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