Articles & News About Mortgage Loans

Flexible Mortgages - Offering Relief from the Fixed Mortgage

A pension mortgage may seem lucrative at the first sight. However, they seldom are, if the customers who took pension mortgage are to be believed.

Nevertheless, before delving into the ill consequences of the mortgage, let us observe why pension mortgages seem lucrative. The most eye-catching feature of pension mortgages, which lures people, is that the pension mortgage requires to be paid out of the pension amount, which one receives on retirement. This is the feature, which drives people to go for pension mortgages.

While in most of the mortgages, the customer would have to pay the full repayment amount himself; in pension mortgage, he gets assistance from the government, though not directly. To every 78p, which a person contributes to the pension fund, the government contributes 22p (This is for a basic rate taxpayer. In case of those who are high rate taxpayers, the ratio changes to 60:40. This means that for every 60p contributed by the customer, governments share is 40p). Therefore, a customer is actually paying just 78 and 60 percent respectively. Besides, the customer is also getting tax relief for paying into the pension plan.

People normally do not like to burden their present life. Their optimism assures them that their future will be secure. Pension mortgage is basically an interest only mortgage. This means that they will have to pay significantly less on the mortgage as they are paying only the interest. People who desire more of immediate relief shall be pleased with the idea of paying less.

However, they have to pay the mortgage amount drawn. At the end of the term of repayment of the pension mortgage, the principal amount will remain unaffected. This is because all through the period of repayment the customer has been paying just the interest. This principal amount will have to be repaid with the help of pension. Normally 25% of the pension amount is available in cash. This may be used to pay the pension mortgage.

Taking these into account, pension mortgages seem to be the perfect mortgage. Neither is the customer forced into paying more on the monthly installment, nor does he face any difficulty in the final repayment.

But, what of the life after the pension mortgage is paid. Is the life ahead as smooth as the repayment? No, it is not. You have retired and have lost a source of income. You are not in the prime of age to device new sources of income. You need something to rely upon once you retire. Utilizing cash from pension fund for paying a pension mortgage will be inappropriate. This reduces the amount of pension available for the customer to use.

Another feature, which can be seen as exploitative, is that one cannot go for full and final repayment until the age of 50. This is because a person is not authorized to use any part of the pension fund before they reach the age of 50. Therefore, one will be able to repay the pension mortgage before maturity only out of other resources.

Yet another feature of pension mortgage, which will give you goose bumps, is that there is no guarantee of the pension fund being able to pay the pension mortgage. A pension fund is an investment linked to the stock market. The amount available on the pension fund will depend on the whims of the stock market. Thus, there can be a scenario where the lump sum received through pension is not able to pay the pension mortgage in full. The borrower in such cases may be called upon to meet the deficit through other resources.

A similar scenario may occur when the borrower is not able to pay into the pension fund because of unemployment or death. The house will be repossessed to pay off the pension mortgage. Taking a life assurance policy can be a counteractive measure. This will help pay off the pension mortgage at the time of repayment.

There are numerous lenders in the UK offering pension mortgages. Many of the lenders are available online. After having screened the lenders and making a list of few lenders, it will be good to contact the lenders personally.

Before taking a pension mortgage one must be extra vigilant. A pension mortgage can endanger your after retirement life. Unbiased and professional advice on the viability of pension mortgage for your individual case will be beneficial.

James Taylor holds a Master's degree in Commerce from JNU he is working as financial consultant for http://www.chanceforloans.co.uk To find a personal loan and mortgageloan that best suits your needs visit http://www.chanceforloans.co.uk

Other Article Sites

findabook.com moneycd.info a-mortgage.info about-lemon-laws.info aboutstudentloans.info
all-about-publishing.info auctions-articles.info bestcollege-university.com bestispconnection.com
biblefolder.com blogger-website.com books-used.info brokers-guide.info buywindows.info cable-dsl.info
career-miner.com carpel-tunnel.info cashinaflash.info cashloanreviews.info casinobell.com chat-house.info
clearmycredit.info collegeloantips.info crones.info depression-articles.info dirnic.net dishguides.info
divers-below.com expodog.info financewizz.com fire-insurance.info getgood.info handleit.net it-idea.info
health-supplies.info hosting-right.com insidealert.com insurance-facts.info jobs-employment.info
justgood.info lookgold.net lowcost-travel.info money-source.info myhostzone.info numisblog.com
peoplesearchfinder.info pr-articles.info realeas.com refinancing-guides.info spyware-remove.info
telelot.info the-law.info toppaid.info travel-deals.info travelcorrect.com wedding-guide-site.com
your-blog.info your-credit.info

MORE ARTICLES:

Basic Information You Need To Know About Getting Home Mortgage Loan
Interested in getting a home mortgage loan soon? Here is some basic information you need to now about home mortgages. Arm yourself with these pieces of information before moving further.

Mortgage Tips For The Greenhorn
In California we see amazing weather, great natural beauty, and many cultural offerings. It is not surprising that it is the most populated state in America. At the same time, one of my other places to reside at is Arlington Heights in Illinois. Though these two places are located far apart, there are similarities between them. Many of the homes in the state of California and in the city of Arlington Heights are the most coveted, though not necessarily the most expensive. Unless you are extremely wealthy, you will undoubtedly require a mortgage in order to buy a home. When shopping for a mortgage, you might be attacked by a barrage of unfamiliar terms. Here is a 3 step guide to buying a home in California, Illinois or anywhere else, alo...

Home Mortgage Loan Pre-Approval Online – Keys When Applying For A Mortgage Online
Applying online for a mortgage is very fast and easy. Just make sure of a few things before you start to look for places to apply to.

Factors To Consider When Getting A New Home Mortgage (Refinancing)
Thinking of getting a new home mortgage? Well, it may not be as easy as you think. Here are some considerations you need to think about before plunging right in.

Online Mortgage Lender Directory Continues Free Advertising Drive
LendingGateway.com continues a generous free mortgage lender directory campaign by giving away valuable space in the LendingGateway.com state by state lender directory.

Home Mortgage Loan Information - Which Type of Home Loan is Best For You?
If you are considering buying a home, then you may be more than a little confused by all of the terms you hear about home loans. After all, lenders throw around words like fixed rate, balloon mortgages and adjustable rate mortgages without a thought.

Mortgage Quotes: When You Should Start Applying
The first point the make is that there is no wrong or right way to buy a house, but there is a smart way and a not-so-smart way Some people are out just out and about with no intention of purchasing a home, but they drive by a home they love and make an offer on the spot

Home Equity Loan – With a Reverse Mortgage, Your Home Pays You!
The home equity loan has become quite popular in the last five years, and Americans have tapped into the equity of their homes in record numbers. The reasons vary, although home improvement and debt consolidation are the most common reasons for borrowing against a home's equity.

Fixed Vs. Adjustable Rate Home Mortgage Loan
Getting a home mortgage loan but confused which particular type to get? Read about fixed and adjustable rate mortgages through this article.

Mortgage Lenders Fight Back, Making Many Investors Wonder - What Happens Next?
Property investment expert Property Mentor have launched a brand new campaign to help people understand the real state of mortgage lending in the UK and dispel false media hype and secure the minds of the public.

Subprime Mortgage Debt Relief - Where To Look For Subprime Mortgage Debt Relief
If you find yourself caged in subprime mortgage and you feel more and more affected by it, there are not many options for you to analyze It is never easy to learn how to handle better your financial condition, but you must take the necessary time and be willing to explore the existing opportunities in order to determine key details and manage your problems easier

What is an Offset Mortgage?
An offset mortgage is very similar to a current account mortgage - but instead of having everything all in one account, all accounts are held separately.The offset mortgage concept treats your money as one giant pot, with each element (mortgage, savings, current account etc) separate to the rest.

MyFHA.net President Shares Mortgage Lead Success Tips in Exclusive Online Interview
MyFHA.net President John Scott Smith recently shared insights and strategies for growing your FHA mortgage business using Internet leads, in an exclusive interview with Jeff Mifsud of Mortgage Seminars. The interview with Smith and Mifsud is available online at http://mseminars.com/successdesk.htm.

How To Find A Mortgage With Bad Credit
Shopping online for mortgages ought to be trouble free, even should you have poor credit or no credit score. You can nonetheless find a bad credit lender that can facilitate you.

Realtors Can Earn Full-Time Income Contributing Part-Time Hours with CNA Mortgage Group, Inc.'s New Program
CNA Mortgage Group, Inc. announces the launch of the" Realty Support Network" in Florida. The program allows Realtors® to increase their monthly earning potential by up to 30 percent.