Posted by admin On December 24th 2020
These mortgages give the borrower some flexibility to change their monthly payments to suit the person’s ability to pay, as well as the opportunity to pay off the mortgage more quickly. Although there is no exact or precise definition of a flexible mortgage, it is generally considered that such a product should offer the following basic features as standard:
Two key benefits of these features are as follows:
Many lenders are now offering flexible mortgages with a fixed, discounted or capped rate for an initial, interim period. Early repayment charges do not usually apply to these products, but an arrangement fee may be chargeable and, in some cases, a particular insurance product must be purchased from the lender at the same time.
Most flexible mortgages will allow the borrower to draw down further funds as and when required, although the lender will have set a limit on total borrowing at the commencement of the agreement.
Flexible mortgages involve a much simpler administrative process than is usual when dealing with further advances. The way in which the mortgage deed is generally worded for flexible mortgages is such that all additional funds withdrawn, within the limit on total borrowing, will automatically take priority over any other subsequent or further charges registered against the property.