Offset mortgages deals in Harrow
In the recent times, choosing the best offset mortgage deal could be very challenging. The vast amount of information and different offers that you easily get on the internet and/ the streets in most cases leave more confused than before. It becomes very difficult to judge clearly which is genuine and deal best suits you.
Meaning of offset mortgage.
Offset mortgage is a type of mortgage that allows for quicker repay than most common mortgages. This is made possible by linking your savings account with the mortgage balance account. The interest that is earned from the savings account is used to repay your mortgage. Depending on your savings amount and paying rate, it is allowed to underpay, overpay and/or sometimes take payment holidays.
This difficulty in finding the interest rate of different mortgage providers makes it hard to do comparison and analyse which is the best deal. However, it is important to look at offset mortgage as a whole before making your decisions to settle on the mortgage deal that you can take. This is because offset mortgages come in many different forms and sizes and it is best that you choose one that best satisfies your needs. According to the Council of Mortgage Leaders, about 170,000 offset mortgages worth £23.9 billion were sold in 2006 alone.
Although they account for a small percentage of the market- only about 7%, offset mortgage deals are much better choices for households seeking for a good mortgage deal. There are many benefits that offset mortgage offers you. This includes: tax benefits, yearly savings and payment flexibility. However, with this great deal, most people still go for the traditional mortgage plans not because they do not know some other type of mortgage exist, but since they are more comfortable with what they know and fear the unknown.
Independent Mortgage brokers.
To avoid all the confusion in choosing the best deal, it is important if you seek the help and advice of a trained person like a mortgage broker in Harrow will be of much assistance to you. Like all other financial services, Offset mortgages are regulated by an independent body.
Like all other financial services, an independent body that regulates Offset mortgages in the UK is called the Financial Services Association. This body seeks to improve business in the sector by applying all the effective business principles to a firm. For instance, principle 6 ensures that customers are treated fairly, principle 7 ensures that reliable and non-misleading information is provided to the customer. Therefore, finding an independent personnel with knowledge in this area will help you secure the best deal.
A research done by CML indicated that most of the offset mortgages were sold through brokers. Compared to about 45% in April 2005, the mortgage sold through intermediaries rose to about 60% last year.
Types of Offset mortgages.
In the UK, the first offset mortgage type was introduced in 1997. Since then, the number of offset mortgage lenders has increased significantly. Presently, there are about 250 different mortgage products available in the market. One example is the buy-to-let offset mortgage which allows the owners to let the facility and use the rent to pay the mortgage loan. The offset mortgages have been customized to fit many work groups, including the self-employed, first-time buyers, commission based employees and those with irregular income.
In the past, offset mortgages were often associated only with higher earning older people. However, due to market expansion, young first-time homebuyers can now find suitable mortgage plans for them. There are many plans which include the ‘family offset’ in which friends or family can use their savings to offset the mortgage debt.