Welcome to Mortgage And Real Estate Tips Revealed
Mortgage After Bankruptcy Article
This is a selection made from among articles on Mortgage After Bankruptcy. For a permanent link to this article, or to bookmark it for future reading, click here.
What is a Capped Mortgage?
from: John MussiA capped mortgage is a variable rate mortgage with a capped limit beyond which the rate paid will not exceed.
Mortgages are available in a number of different interest rate options, one of which is the capped rate.
A cap means that there will be a limit to any increase in the variable rates for a selected term. The mortgage rate charged on your account can not exceed this rate. However if the variable rate drops below your capped rate you will benefit, as your repayments will be calculated using the lower variable rate. Capped mortgages enable you to place a limit on your monthly mortgage commitments and still benefit from falls in interest rates.
Capped rate mortgages put a limit on the highest rate of interest you will have to pay on your mortgage over an agreed introductory period. This means you're protected to a certain extent if interest rates rise, and if they stay low you will still benefit from the lower interest rates. It's basically a combination of the fixed rate mortgage concept with a standard variable rate mortgage, allowing you to profit from decreasing interest rates.
A capped rate mortgage is a variable rate mortgage which has a fixed upper rate limit. This means that the borrower knows in advance the highest monthly payment that he may have to make.
One advantage of the capped rate mortgage is that when interest rates are likely to rise, they offer protection for borrowers against repayments going over a certain level. This can be seen as being almost as attractive as a fixed rate mortgage. Having a capped rate mortgage can make it easier to budget when you know what the highest amount your mortgage payment could be.
Be aware that this type of mortgage usually charges redemption penalties to those who wish to swap mortgage provider.
Capped rate mortgages are generally a compromise between fixed rate and variable rate mortgages.
Whilst providing peace of mind capped rates are generally more expensive than fixed or discounted rate products.
You may freely reprint this article provided the author's biography remains intact:
About the Author
John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available loans via the www.directonlineloans.co.uk website.
 |
 |
Mortgage After Bankruptcy News
Citigroup, Senators in Talks to Let Judges Modify Mortgages - Wall Street Journal
 Politico | Citigroup, Senators in Talks to Let Judges Modify Mortgages Wall Street Journal - They say that cramdowns, when bankruptcy judges force lenders to modify mortgages, would raise borrowing costs for all home buyers. ... Congressional Push for 'Cram-Downs': It's On! Leading Democrat offers US mortgage aid bill House Democrats Seek Bankruptcy Rule Changes |
Carousel faces growing anger - Akron Beacon Journal
Carousel faces growing anger Akron Beacon Journal, OH - A second mortgage creditor is owed more than $1.7 million. An asset liquidation sale isn't expected to net much revenue after those top two debts are paid. ... |
Report: Citi to support loan modification rules - Forbes
Report: Citi to support loan modification rules Forbes, NY - AP , 01.08.09, 08:36 AM EST Citigroup Inc. is working with senators to hammer out legislation that would allow bankruptcy judges to modify individual ... |
Homebuilders push housing aid plan - The Associated Press
Homebuilders push housing aid plan The Associated Press - Builders want a package of subsidies that would bring mortgage rates to just under 3 percent for the first half of this year. They also favor a tax credit ... |
Vick wants to auction Ga. home after value drop - The Associated Press
Vick wants to auction Ga. home after value drop The Associated Press - The imprisoned former NFL star disclosed the auction plans late Monday in a new financial disclosure statement filed in his bankruptcy case in Newport News. ... |