- The big bank break up and the 4th anniversary of the Northern Rock collapse.
- It's also the Trumpo Blogs 4th Birthday, no coincidence-born out of despair.
- Mon 12th Sep 2011
- Up to one in six European banks fail financial health check.
- It's a scary story, but what does it mean? surely not another run on a few banks?
- Tue 28th Jun 2011
- Welcome back moneybrain.com
- The trumpo team are pleased to welcome back an old friend.
- Mon 13th Jun 2011
Mortgage repayment types
- Trumpo mortgage advice is free and is provided by FSA regulated financial advisers
- Our trusted advisers will help you find the lowest mortgage rates
Repayment of your mortgage using an Endowment, Individual Savings Account (ISA) or Pension.
If the repayment of the mortgage is by one of the vehicles above you will normally have a mortgage that you are only paying interest on. When your repayment vehicle matures or is cashed in, you should ensure that the value will be sufficient to repay the amount you owe the mortgage Lender. It is wise to contact your financial advisor who sold you the repayment vehicle to ensure that it is on track to pay your mortgage off.
It is advisable that you do this on a regular basis, if your advisor is not contactable then its best to contact the insurance or investment company that you have the policy with and they will be able to give you a forecast of the value at maturity.
Positives:
- Can be tax efficient.
- May deliver a higher amount than the mortgage owed.
- Not linked to your property so gives extra flexibility when planning your finances.
Negatives:
- No guarantee that when the policy or plan matures that you will be able to pay the mortgage off.
- You may have to increase payments because the insurance company may not be performing.
Capital and interest repayment
This is the most straight forward type of mortgage. You can take out a capital and interest repayment mortgage and providing you stick to the payments your mortgage will be paid off at the end of the term.
The mortgage product is structured in such a way that in the early years most of the monthly payment will go to pay the interest and only a small amount of the payment goes to pay off the capital, and in the later years the majority of the monthly payment goes to pay off the capital.
If you want to increase your monthly repayments on a capital and interest repayment mortgage you will pay the mortgage of earlier than planned.
The lender may insist that you take life cover that will pay off the mortgage in the event of death. If not, it is advisable to consider it as a precaution in any event.
Positives:
- The mortgage is guaranteed to be paid off.
- You can pay the mortgage off early by increasing your payments.
Negatives:
- In the early years very little capital will be paid off.
