UK Mortgages.... thoughts appreciated
Nov 11th 2008, 7:51 am
#16
BE Forum Addict
Joined: Aug 2004
Posts: 4,754
Re: UK Mortgages.... thoughts appreciated
Yes, interesting differences on each side of the pond. One great idea the UK has but US doesn't is the offset mortgage - essentially gives you tax-free interest on your savings.
You can get longer-term fixies in the UK now, but not usually beyond 10 yrs (though there are some lifetime fixies, apparently Brits don't seem inclined to take them up).
The tradition here over the past few years seems to have become "get a great rate for 2 or 3 years and then re-mortgage for another great rate" Lots of people who did this are now havig very serious "oops" moments (can't get a decent remortgage because of insufficient capital in their house, etc.)
You can get longer-term fixies in the UK now, but not usually beyond 10 yrs (though there are some lifetime fixies, apparently Brits don't seem inclined to take them up).
The tradition here over the past few years seems to have become "get a great rate for 2 or 3 years and then re-mortgage for another great rate" Lots of people who did this are now havig very serious "oops" moments (can't get a decent remortgage because of insufficient capital in their house, etc.)
LIBOR. The worst product in the US was the interest only loan so you never pay off any principal, just hope for the price of your house to go up so that if you want to sell you can pay off the mortgage, But ooops that doesn't work anymore with house prices 25% down in some parts of the US.
The traditional US mortgage is the 30 or 15 years fixed rate. It has the advantage of keeping your payments constant and if rates should ever fall significantly you can always refinance. That's what I did I went from a 30 year 5.5% to a 15 years 4.5% fixed about 8 years ago and I love the stability of it!
