5 mortgages will normally refer to mortgages requiring a loan to value of 5% and having a mortgage loan of more than 95 LTV. These mortgages are extremely popular today but the different mortgage offers available to you will also depend heavily upon your mortgage application, your property value, your current credit rating and how much of a mortgage loan you are looking to apply for. It is also possible to apply for an unsecured mortgage but this will require you to have a much larger deposit than for a secured one. The amount you are able to borrow will also depend upon the type of mortgage you have applied for as well as your current income and your ability to repay the monthly repayments. So, in order to find the best 5 mortgages it is important to understand what these different mortgages are and how they work.
A bare minimum option is an interest only mortgage where the repayments do not increase until you reach the end of the term. If you wish to finish making improvements to your property within the five years then you can move onto a repayment mortgage. This type of mortgage is perfect for borrowers who have enough equity in their home but do not wish to extend their period of repayments. However if you have poor credit, this could make it difficult to find a suitable solution as the terms and conditions will be far stricter. You will also find that costs will be higher than the lender will have to carry out an evaluation in order to decide whether you are a suitable candidate for this type of mortgage.
An ARM or adjustable rate mortgage is another popular type of 5 mortgages. With these you have an interest rate linked to a specific share index. This will change over time depending on the value of the share index. This can make these 5 mortgages a good option for borrowers who have a cap on how much they want to borrow. They are flexible, convenient and provide a great deal of security although their annual repayments may rise every year at a variable rate. The disadvantage of an ARM is that the repayments are likely to be above inflation each month so over the longer term they will cost more than an equivalent repayment plan with a fixed rate.
There are also a number of schemes called flexibility provisions, which are available with some 5 mortgages. One of the most popular is the flexibility scheme where the amount of the repayments can be increased at a later date up to a maximum amount agreed by the borrower and the lender. A further popular feature of some loan products is a flooring loan to the borrower can choose a repayment period of up to 20 years. Another popular feature of these loans is the no draw back option, which allows the borrower to avoid paying any interest when they have left the loan and is therefore only paid once the loan has been fully paid off.
The main feature of the best deals on 5 mortgages is that they offer the best long-term benefits. It is usual for people to change their lifestyle a little bit and to move home to a rented flat or condominium in order to reduce the monthly outgoings. For those doing so, they may wish to consider loan products with longer repayment terms that will help them meet the financial needs of their future plans. This way they can enjoy the security of a longer repayment period and continue to live in the home as they get older without having to worry about maintenance costs or coping with pension payments. In order to find the best 5 mortgages, it is worthwhile checking the websites of individual lenders.
When looking for the best rates of interest on a home buying loan, it is often useful to look at the costs involved with taking out a loan. It is sometimes seen as necessary to take out an equity loan, which can be seen as a type of loan but one which have a lower interest rate. Equity loans can be secured against the equity of a property and as the borrower retains the home, this means that he or she also retains the security of the equity loan. This means that the 5 mortgages that a couple may take out together can be consolidated into one. The lower interest rate makes up for the initial lower repayments by making the monthly repayments more manageable.
Mortgage loans are often taken out based on an introductory period, which can range from three to ten years, depending on the type of loan and the applicant’s personal circumstances. For example, a one-year fixed rate mortgage with a one-year term is an example of an introductory loan. As well as offering lower repayments over the short to medium term, they also offer extra security to the applicant should they wish to extend the borrowing period. If an applicant extends the term, they can enjoy a lower interest rate over the long term and even save on the total cost of the loan if they choose to refinance in the future.
Fixed mortgages offer buyers a greater stability in their monthly mortgage payments until the full length of the mortgage is repaid. However, they come with higher interest rates because they lock in the interest at this lower level. This feature is only applicable if you have a certain amount of equity in your home. Fixed mortgage deals tend to be for people who need a steady income from their home and those who wish to borrow at a fixed rate for the duration of the mortgage. Two-year term deals give buyers a longer term to repay their mortgage and are ideal for buyers who expect to stay in their property for a longer period.