Posted by admin on March 06, 2008 in Loans
The offset mortgages are quite new to the UK market, but elsewhere there is a huge potential for such a type of mortgage. Such a mortgage entails the linking of your savings account linked to your mortgage account, and instead of earning interest on your savings; your money is used to cut down the balance of your mortgage. For example, if you had a 100,000 pound mortgage, with 10,000 pounds in the savings account, you would accumulate interest only on the remaining 90,000 pounds.
Such types of mortgages take advantage of the fact that there is less interest generated for savings, than we get for our debts. There are certain tax advantages that such mortgage types entail, especially if you are a regular high rate tax payer. You do not require paying any tax on the reduced interest, which means that if you receive 3% on your savings after tax payments, you can actually save 6% interest on your mortgage.
If you have a lump sum stored away in the bank, and pay high amounts of tax regularly, offset mortgages are most appropriate for you. These types of mortgages are best for people who are self employed or who receive large annual bonuses. By reassigning the money that goes into tax to the offset savings account, self employed homeowners benefit from the saved cash working towards the repayment of the mortgage debt.
Posted by admin on March 05, 2008 in Loans
If you live in the UK, you should know about a great personal finance website–OnlyStop.com. There, you can stack up loans and mortgages side by side for comparison–almost anything that relates to finance. Have you been hunting for a loan? Don’t take a loan just because someone offers to you! You should investigate all your available choices. Try out OnlyStop.com and you can compare a wide variety of loans before picking the one you want. There are all different kinds of loans, loan rates, and loan lengths, so it’s a good idea to play detective before you sign on the dotted line.
Mortgages can also be extremely confusing, especially with the kind of housing market we have today. Also, you’ll have your mortgage for a very long time, so
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