Primary Types of Mortgages with Distinctive Features

Posted on Oct 2 2018 - 7:31am by Business Day TV

mortgage with house keysThe ideal answer for prospective homebuyers who do not have the funds to buy a house is a mortgage. For most borrowers, however, their primary concern is the loan’s repayment. Fortunately, there are now loans with unique repayment features.

Other than quick loan repayment, some of these unique features give you additional cash in places such as Denver. A real estate broker also now offers these options, so be sure to look for them when taking a mortgage. Here are the common mortgages with distinctive features you might come across.

Cashback Mortgages

With this option, you will get cash at your mortgage’s closing. The total amount of your mortgage’s cashback is typically a portion of your loan’s capital, but this can sometimes be a pre-determined amount.

This mortgage feature gives you some money for repairs and furniture in your new home. Cashback mortgages, however, have higher rates of interest compared with other mortgages.

Offset Mortgages

In this home loan, your savings and mortgage accounts are connected. The savings in your account will contribute to your loan’s reduction, and hence you are only required to pay for the interest.

An offset mortgage is a perfect choice for homebuyers with considerable monthly bank balances since they can repay the loan fast. Homebuyers who pick this option, however, do not access discount deals for mortgages.

Current Account Mortgages

These work much like offset mortgages. Unlike the latter, however, a current account mortgage links to your current rather than a savings account. Current account mortgages also help you repay your home loan faster, although you do not benefit from discounted mortgage deals.

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Most traditional mortgages now have over-payment, payment holidays and underpayment options. As such, this funding option has minimal risks of becoming a financial burden for you. Just assess and adjust your financial situation and get the ideal features for you with advice from your mortgage broker.