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The Mortgage Works is a specialist lender that is a company under the Portman Building Society. It has served the intermediary market for over the last fifteen years, and today, The Mortgage Works is responsible for managing over 2 billion in mortgage assets. Individuals can apply for mortgages with Mortgage works, and the company offers a wide range of products, options, and solutions that are made specifically to meet the needs of their clients. They offer solutions that are particularly flexible when compared to other mortgage companies, so they’re considered a great option for a variety of people seeking mortgages, whether they’re first time buyers or those who are seeking to buy investment properties. They also offer mortgage products for people who are re-mortgaging or those who are buying properties with the intention to let.

The Mortgage Works offers three main types of mortgages; Status Plus Mortgages, Buy To Let Homes, and Self Certification Mortgages.

Status Plus Mortgages offered by The Mortgage Works are a type of loan available only from intermediaries. They offer two fixed rate mortgages at two years, two year discount mortgages, and tracker mortgages which change according to the base rate of the Bank of England. Status Plus Mortgages from The Mortgage works also offer other features, such as offering a combination of interest only repayments or just repayment towards the mortgage.

The Mortgage Works also offers Buy To Let mortgages, which are offered in two, three, or five year mortgage terms. These all turn into a variable rate mortgage after a fixed term has passed. One of the features for this type of mortgage is that you are able to get a two or three year tracker mortgage that is associated with the Bank of England’s base rate.

Self Certification Mortgages are made for people who have a hard time proving their income, like self employed or contract workers. Declarations are required and two fixed rate products can be chosen, a two or five year mortgage term that turns to a variable rate. Under a Self Certification Mortgage, discount and tracker mortgages are also available.

These days, as people scramble for new and more creative ways to finance buying a home, the interest only mortgage is becoming more common and well known. An interest only mortgage is one in which you have the option of paying only the interest (or just the interest and a portion of the principal) each month in the early years of the mortgage loan. Interest only periods may be applied to adjustable rate mortgages, or 30 year fixed rate mortgages, depending on the lender.

In a traditional mortgage, each month your mortgage payment is divided in two parts – one part is paid on the interest charge, the other on the principal of the loan. The main feature of an interest only mortgage loan is that during a specified initial period of time – usually three, five, seven or ten years – you may choose to make a payment of the interest portion of the loan only. The option is flexible. One month you may choose to make an interest only payment, another you may choose to make an interest-plus-part-of-the-principal mortgage payment, or a full, standard monthly mortgage payment. Needless to say, an interest-only payment will be significantly less than a traditional mortgage payment.

The flexibility of an interest-only mortgage allows you to adjust your mortgage cost on a month by month basis, giving you more control over your monthly cash flow. In any given month during the interest-only period, you have the flexibility to pay as much or as little on your mortgage as you can.

Interest only mortgages aren’t right for everyone. While you have the option of paying interest only each month during the early years, the principal repayment on your mortgage loan is accumulating. At the end of your interest only period, your mortgage payment will take a dramatic jump. Financial experts recommend interest only mortgages for specific types of borrowers: those whose income is supplemented by large commissions or bonuses throughout the year, those who can reasonably expect to be making considerably more income in a few years than they are now, and those borrowers who actually WILL invest the difference between their interest-only payment and their full mortgage payment in profitable investments.

The power of an interest-only loan, according to most experts, is that you can ‘afford to buy more house’. Because you’ll have the choice during the early years of paying only the interest each month, you can effectively afford the monthly payments on a house that’s as much as 30% more expensive than you could with an amortizing (typical) mortgage payment.

You also, however, have the choice each month of paying the interest plus as much on the principal as you wish. If you’re a salesman, for instance, whose standard income is supplemented quarterly and semi-annually by large commissions or bonuses, you could pay interest-only during lean months, saving yourself up to $350 in those months. In the months that you get a large commission though, you could choose to pay down several thousand dollars on the principal.

An interest only mortgage also makes sense if you have a solid investment plan. If a typical mortgage payment would be $900 monthly, and your interest-only payment for the month is $625, then the best financial strategy according to many financial experts is to invest the remaining $275 in a solid, money-making stocks program.

Interest only loans are not for everyone, but they can be a valuable financial tool that can help you control your spending and give your investment power some added oomph. Don’t rush blindly into an interest only mortgage, but do speak to a financial expert or loan officer about whether an interest only loan may be right for you.

Home mortgages are loans that are taken to buy a property, for which the property itself is used as collateral. Owning a home is a huge one-time investment for most. People are using the home mortgage loans to buy property with increasing real estate prices and decreasing interest rates on mortgage loans.

Home mortgage rates are the rates of interest that are to be paid with the principal loan and do not remain steady over a long period of time. Lower rate means lower monthly repayments, leading to lower costs on the property. There are two kinds of home mortgage loans: Fixed Rate Mortgages (FRMs) and Adjustable Rate Mortgages (ARMs). FRMs are mortgages for which the rate of interest remains the same for the entire period of the loan which can be of 10, 15, 20 or even 30 years. Adjustable rate mortgages, instead, have fluctuating rates of interest. This is good when rates are forecasted to fall. ARMs are preferred by those interested in shorter period of loan term. ARMs compared to FRMs offer lower rates but the latter contain a certain level of risk. Fixed rate mortgages are very predictable and is a rather safe option to take.

Mortgage rates refers to the economic index on its fluctuations. The mortgage bond market works according to a process called securitization. This securitization enables creation of more loans and greater mobility of funds by keeping the mortgage rates low and allowing more credit for ideal customers.

The internet is the best source to know and compare on home mortgage loan rates. Most home mortgage loan companies provide information through their websites also with rates are updated in real time or on a daily basis. Their sites also have easy-to-use home mortgage calculators that give all information, including payments to be made each month and the tax advantages, with the single click of a button. Most will have financial advisors providing advice online, or over the phone.

As the title of this article would suggest, I am going to take you on a journey through the ups and downs on fixed rate mortgages. When buying a house, especially the first one, I think that it is literally the most terrifying experience that I have been through, and I have combat experience as a military veteran. For those of you who find yourselves still anticipating the purchase of your first home, let me give you a brief rundown of what it is and what it isnt. What it isnt will be the easies to tell you about. It isnt like going to the store and buying what you want by swiping your card. It isnt even like buying a new car, although the new car buying experience is a little bit closer. It is like looking at dozens of houses that you hate in order to find one that you like, only to learn that it is $10,000 more than you wanted to spend. So you make an offer and wait to see if the seller takes the offer or sends back a counter-offer. Once the game of offer/counter-offer is through you set up a closing date. At the closing you sit down and sign enough papers to make Leo Tolstoy quake in his boots. Once that hour devouring procedure is done, the house is yours and you are in debt for 30 years. Sounds appealing doesnt it? Well, actually, it really is. But, before you get to the point where you can sign all those papers, you have to decide on what kind of loan will be best for you. There are a couple of different options and, in this first installment, I will discuss the fixed rate mortgage.
Overview of a Fixed Rate Mortgage

As the name would suggest, the fixed rate mortgage is a loan that has constant payments. By constant I dont mean that they will be due every month (although they will), rather I refer to the fact that they do not change. If you get a fixed rate mortgage and the payments are $900 per month, they will remain at $900 for the duration of your loan. Nothing changes, it is set in stone, and you can set your clock by it, $900 a month for 30 years.
Benefits of a Fixed Rate Mortgage.

There are a number of benefits to having a fixed rate mortgage. I would like to discuss two of them, the planning power that it gives, and the financial liberty that you can take from it. Lets start with the planning power.

Planning Power
To take on the responsibility of a $150,000, $200,000, or even $1million dollar debt is, as a mentioned before, very scary. But, to know that all you will ever be required to pay is $900 a month (or whatever your payments end up being. I dont in any way want to insinuate that all mortgage payments are going to be $900 if you get a fixed rate.) is a very comforting piece of knowledge. You can plan your budget around that amount and make sure that you can always afford it. It really helps things out to have that amount set in stone. The next thing that most people get out of a fixed rate mortgage is financial liberty.

Financial Liberty
What I mean by that would be best communicated in the description of a hypothetical scenario. Picture a young couple, just out of college, just married, and brand new at the jobs in their respective careers. They decide to take out a loan and buy a house. They, because of the salary restrictions that they are working with, can only comfortably afford $500 a month. They know that this wont get them the house that really want so they decide to stretch a lot financially and get a house that will run them $800 a month. After two years they both get promotions and their bills get easier to pay. After another two years they both move into management and get more promotions. Suddenly they find themselves in a position where they can actually comfortable afford to make $900 a month payments, and later on they can make $1000 a month payments, but they dont have to. All they are required to do is $800. Every amount of money that they pay over $800 in a month goes towards paying off the principle and this gets their house paid off much faster. When the house is paid off, there is $800 a month that is no longer being tied up in living expenses. You see, in a fixed rate, 30-year mortgage, it will take 22 years to pay half of the principle because so much of that money is going towards the interest. If you consistently pay more each month than the minimum payment you can pay off a 30-year mortgage in 20 years easily.

Final Synopsis
For the young, first time homebuyer with a solid income, a fixed rate mortgage is a pretty good option. It allows, as was earlier stated, predictability and the possibility for earlier financial liberation. For the older first time homebuyer this is the best option. The ability to pay off a mortgage in less than 30 years is something that becomes very important as retirement approaches. For the buyers that are on a much tighter, less predictable budget, this may not be the best option. In that case there are other mortgages that would be better suited for their needs. But, as with all mortgage and real estate decision, sit down with a professional who can assess your individual needs and come up with a plan that is right for you.

Nothing is ever certain in the world of finances, and theres no way of predicting how the market will change in the future. However, if you want to be able to plan your budget precisely, then a fixed rate mortgage might be the right option. The repayments will be fixed for a set period of time usually between the first one and five years of your mortgage, so you can be sure that any rises in the interest rate will not affect you. The term the rate remains fixed can be as long as ten years.

Fixed rate the pros

For those on a tight budget, it can be useful to know exactly what will need to be set aside each month for mortgage repayments. Also, it can be a good move to fix your rate when the economy looks like its about to change and interest rates rise. If, from studying the market, you anticipate that rates are set to rise in the near future, then taking a fixed rate now could mean you will save money over the next few years. Even if the Base Rate set by the Bank of England rises, you will be protected, at least for the term that your payments are fixed.

Fixed rate the cons

If the market changes and interest rates fall, you could lose out on a reduction in rates. Fixed rate mortgages are often set at slightly higher rates than the cheapest deals. Be aware of redemption penalties and clauses that tie you to your mortgage these can last much longer than the fixed rate period and you may find it prohibitively expensive if you want to change lenders or pay off your mortgage.

Thousands of people spend a lot of time studying the economy, and even the financial experts who predict market conditions often get it wrong. Its impossible to foresee how interest rates will change although you may be able to apply common sense to a certain degree, there is no guarantee that a fixed rate mortgage will beat the SVR five years down the line. Ultimately, you have to make the best decision you can based on the situation as it stands.

You should also check to see if the fixed rate mortgage is portable this means that if you want to sell up and move house during the tie-in period, you can transfer the mortgage to your new property without incurring any penalties.

One of the most important decisions you will make in your financial life is which mortgage you should get. For many people, the option of a fixed rate mortgage seems appealing. But what exactly is a fixed rate mortgage, and why do so many people choose this option? If you are new to mortgages then this article will let you know a little more about fixed rate mortgages and their benefits.

What does fixed rate mean?

A fixed rate mortgage is fairly straightforward, and does exactly as the name suggests. A fixed rate mortgage has an interest rate that remains the same throughout the mortgage term, meaning that your monthly repayments will remain the same, allowing for inflation of course.

Why a fixed rate mortgage?

Many people choose fixed rate mortgages because of the security and peace of mind that they provide. If you have a fixed rate mortgage, then you know your monthly repayments will not change, meaning you can budget effectively for both the short and long term. If you have a mortgage with a variable rate of interest then your payments can change depending on market fluctuations. This can leave you paying less, but often leaves you paying more each month. The best times to get fixed rate mortgages are when competition is high, and the fixed interest rate is lower than that of the tracker or variable rate mortgages.

Are there any drawbacks?

There are drawbacks to getting a fixed rate mortgage. The biggest drawback is that the interest rate is usually higher than that of variable rate mortgages. The added security comes at a price, in that you have to pay more in interest over the length of the mortgage. Also, the fixed rate is usually only fixed for a certain number of years, usually 2 or 3, after which the rate can be put up and then fixed for another period. This can mean that your mortgage will be cheap now, but in the future the rate could rise.

Who should get fixed rate?

Despite its drawbacks, there are many people that should definitely opt for fixed rate mortgages. If you are on a tight budget and have a fixed income each month, then you cannot afford for your payments to rise. Having a fixed repayment each month means that you know you can make the payment even if national interest rates rise. Also, if you can get a deal whereby the starting interest rate is lower than that of a variable rate mortgage or even the same, then opt for the fixed rate mortgage.

How to decide?

If you are still unsure about whether or not a fixed rate mortgage is right for you, then consult an independent financial advisor. They will be able to help you find the best deal, as well as tell you whether or not the base interest rate is going to fall or rise. This will determine whether a fixed or variable rate mortgage is best for you.

According to a recent report consumers confidence in variable rate mortgage products is on the increase in the UK, following a substantial period of consumers tending to shy away from variable rate products, preferring instead to opt for more stable, yet more expensive, fixed rate deals. The series of five interest rate hikes between August 2006 and July 2007 resulted in many homeowners trying to remortgage to fixed rate deals in order to try and avoid the effects of further interest rate rises, as well as resulting in first time buyers opting for fixed rates to avoid the pitfalls of rising repayments during the first few years of mortgage repayments.

However, since July of this year the Bank of England has kept interest rates firmly on hold at 5.75%, making it latest announcement to keep rates stable just last week. It is thought that part of the reason for the bank’s decision to keep rates on hold is the possible of effects of the global credit crunch upon the UK’s economy, resulting in the Bank of England taking a wait and see stance. Another reason for keeping rates on hold for the moment, state experts, is that CPI inflation is now within the government’s target of 2%, coming in at 1.8%, which is its lowest in a year.

Predictions from analysts and economists that the Bank of England will not raise interest rates again for the remainder of the year has seen renewed interest in variable rate mortgages from consumers in the UK, with many breathing a sigh of relief over the fact that repayments are unlikely to be affected by further interest rate rises this year. This renewed interest has been further fuelled by additional speculation that interest rates may even fall by the end of this year, with many economists expecting or urging the Bank of England to cut interest rates. Many are now expecting rates to fall by at least a quarter point by the end of the year.

Interest in fixed rate mortgages peaked recently, as homeowners and first time buyers struggled to find a solution to the problem of rising repayments resulting from the hike in interest rates. However, some experts have even predicted that interest rates could fall back to around 5% by the end of next year, so many consumers may want to avoid tying themselves into more expensive fixed rate deals under fears that they may end up paying way over the odds in six or twelve months’ time.

One of the most important aspects of buying a property is the mortgage interest rate that you can obtain. After all your looking to borrow the amount required for your property for the lowest possible cost.

Standard variable rate is the typical rate of interest that lenders use and it is generally the most expensive option for the borrower. The standard variable rate is the rate of interest decided by the lender which maybe loosely connected to the Bank of England base rate by a margin normally around 2%.
If you are on a standard variable rate then you may notice that some lenders like to involve any rate increases with effect straight away. At any rate the standard variable rate is not the cheapest option available (based on circumstance). As a independent broker we can help you take advantage of any cut-price offers from other lenders.

A fixed rate is exactly as its called, the rate of interest is fixed over a certain period of time, generally between 1-5 years. Fixed rate mortgages are generally easier to manage since youll know how much is needed for the monthly repayments on your mortgage. The fixed rate mortgage is ideal for people who maybe under financial stress and need to know where they stand from cheque to pay cheque. Fixed rate mortgages are also suitable if interest are set to rise in the early years of a mortgage. Be aware that mortgage providers are usually one step ahead to adjust fixed rates accordingly. A Fixed rate mortgage means you could end up stuck with paying more then others if the interest rates fall below the figure youve adjusted yours to.

Discount rates are a percentage of the lenders variable rate, so your repayments will rise and fall in accordance with the lenders normal rate but you will be paying at a reduced rate over an according time period. This is ideal for first time buyers as a discounted mortgage can give you a few years of breathing space. A 1 -2% discount is very good if there is no lock in period afterwards, with the benefits of this come the ability to remortgage with another lender when the discount rate period draws to an end. Unfortunately you may often find you are locked in for another couple of years on the variable rate so you will not be able to get out of this sort of deal unless you are prepared to face huge redemption penalties. Discount mortgages offer good value for money – but only if there is no lock-in period once the discount has come to an end.

A capped rate will put a barrier to your interest rate you will pay over a certain period of time. If the lenders variable rate exceeds the capped rate then it is here you will benefit, but if the interest rate falls below the capped rate then you will paying the same as many others.
Capped rates will tie you into a mortgage for a certain period of time, usually between 1 and 5 years although recently there has been an introduction of capped mortgages for 25 year periods.
Capped rates give you a mix of advantages of the fixed rates and variable rates, again something is expected in return for this, the capped rate is likely to be higher than any fixed rate you can get. Like fixed rates the capped rate will make financial sense for those who are financially stricken.

Tracker rates tend to follow the Bank of Englands interest rate with a margin either above or below the rate, this is decided by the lender.
How will the interest be charged? Ignoring the type of interest rate you decide to go with one vital question to ask is how frequently is the interested calculated. If you decide to go for a mortgage where the interest is calculated daily then you will find yourself paying less interest over a period of time because every payment will reduce the amount you owe. Current account and flexible mortgages charge interest day by day. If interest is calculated monthly you could end up paying more and you can end up waiting a month after a payment is made before the interest is recalculated. But some lenders have their foot in the door by calculating the interest payable on the amount due at the start of the year and this could make a significant difference to the amount of capital reduction over 12 months. It also means that if you make an additional payment to reduce your mortgage it could be up to a year before this reduces the amount of interest you are charged.

You can compare mortgages by looking at the amount you need to pay every month. Dont be fooled by latest headline rates as they can be misleading as we know different companies charge different interest rates in different ways. The ideal target is a competitive interest rate that carries no redemption penalties so that it is cheaper to move your mortgage elsewhere if more attractive mortgages become available.

By law mortgage providers have to provide an Annual Percentage Rate (APR) for their products. It illustrates the true underlying interest rate, including all the charges, over the entire term of the loan. This means it adjusts for things such as annually charged interest. Comparing the APR of one loan against another can also help you get a better feel for which is the most competitive.

This is the most popular type of mortgage as the monthly payment for interest and principal remains fixed through out the mortgage term, Property Insurance and taxes may increase but the monthly repayment of the amount will be stable.

Fixed rate mortgages are available for 10 years, 15 years, 20 years and 30 years period of time, there are also fixed rate mortgages available Biweekly this helps to shorten up the loan by making the payment every two weeks.

Fixed rate mortgages have 2 distinct features, first one is that the interest rate would remain the same through out the term of your mortgage, second feature is that payment of the loan remains level for the life and are structured for the repayment of the loan at the end of the mortgage term.

The most popular fixed rate loans are 30 years mortgage and 15 years mortgage. During early payment period, a large amount is being taken for the interest and the rest goes off to the balance principal amount, for instance a 30 years of fixed rate mortgage will take 22.5 yrs of the level payment of the loan for the payment of the half of the mortgage amount. Under 30 years of mortgage, month after the month you can choose to pay only interest or you can pay off principal with interest as it is a great option available for those who have tough time for money at times, with this option of lowering the payment you can increase the cash flow for paying off interest bills, remodeling your house, financing schools or college needs or increase your retirement savings.

With Fixed rate mortgage your loan rate is fixed for the mortgage term, you can pay interest only for 10 years and pay the balance interest plus principal for the next 20 years, this helps you to refinance the loan with out any pre payment penalty.

The advantages of 30 years mortgage is, when it is compared with 15 years mortgage the monthly payments are lesser, interest rate remains the same even if the interest rate goes up, monthly payment does not increases as it remains the same for the entire 30 years, compared to 15 years mortgage you would be paying higher rate of interest and the interest rate remains the same even if the interest rate gets decreased.

If you have planned for a long-term loan and does not like to take up the risk you may opt for fixed rate mortgage.

Buying a home can be an exciting and stressful time for anyone. While you may be excited at the prospect of owning your own home, especially if it is your first home purchase, the idea of choosing between all of the many different types of mortgages may leave you feeling confused and apprehensive.

Two of the most common choices youll find in the mortgage market are adjustable rate mortgages and fixed rate mortgages. Fixed rate mortgages are the most traditional type of home mortgage, offering a fixed interest rate that does not change throughout the life of your loan. There are a number of important advantages associated with this type of mortgage. First, if you are budget conscious, this type of mortgage will give you the peace of mind in knowing that your monthly mortgage amount will not change. You can budget the remainder of your financial obligations without worrying about a changing mortgage payment to throw things off.

An adjustable rate mortgage works differently. With this type of mortgage you may be able to obtain a lower interest rate than would normally be available with a fixed rate mortgage; however, the interest rate is not fixed. This means that your monthly mortgage rate may change as interest rates change. With such a mortgage you may not be able to regularly plan your budget due to such fluctuations. While there is usually a cap that will keep the interest rate from fluctuating too much, even a little fluctuation can be too much for some homeowners. Of course, there is also the possibility that interest rates will drop and if that is the case, because your mortgage is adjustable, your monthly payments will drop right along with the interest rate.

When deciding whether a fixed rate or adjustable rate mortgage is your best choice, you need to give thought to several factors. Ask yourself whether it is more important to be able to plan your monthly budget without wondering whether your mortgage will fluctuate or whether you would prefer to receive a lower interest rate in the beginning of your mortgage.

Remember that if you decide you would like to obtain the advantages of both you do have other options available to you. For example, if you feel the interest rate offered to you on a fixed rate mortgage is too high but you want the security of not having to worry about a fluctuating interest rate you can always buy down your interest rate by purchasing points. This will mean more up front costs for your mortgage; however, it may be worth it to decrease the interest rate, especially if interest rates are currently high.

If you do elect to go with an adjustable rate mortgage make sure you understand exactly how high the rates may go as well as ensure you have enough wiggle room in your monthly budget to cushion increases if they occur. This may help to keep you out of a tight spot and possibly losing your home due to rising interest rates.