Are Fixed Rate Mortgages Still Popular?

There have been a trend of first time property buyers being attracted to tracker rates (interest rate tied with the Bank of England base rate) rather than fixed-rate mortgages due to anticipation of interest rate cuts. Fixed Rate Mortgages are the most classic form of loan for home and product purchasing in the United States. The most common terms are 15-year and 30-year mortgages, but shorter terms are available, and 40-year and 50-year mortgages are now available for high priced housing.

However, in some some countries, true fixed-rate mortgages are not available except for shorter-term loans. For example, in Canada the longest term for which a mortgage rate can be fixed is typically no more than ten years, while mortgage maturities are commonly 25 years. When there is some anticipation of a decrease in interest rates, it is likely that new potential home owners would easily opt for tracker mortgages or variable rate mortgages.

Tracker Mortgages

Mortgage can come in many different forms and we do well to be informed before taking one. For example, the tracker mortgage is a type of mortgage that ties in directly to the Bank of England base rate and not the lender's rate, which is always higher. For a first time buyer, the margin is set to a maximum of only 1% or 2% above the Bank of England base rate. And in some special cases, the rate may even be set below the rate. This is especially attractive because it means that repayments during the life of the tracker offer, (usually from 2 to 5 years), are invariably cheaper than with other standard mortgages. This is something that will be really conducive to young couples or families looking to buy their first house.

The good news is the Bank of England had recently announced a cut from 5.75% to 5.5% in December 2007 and this has increased the popularity of tracker mortgages. According to the director of Andrews Mortgage Services, Chris Chapman, "With this [fall in interest rates] in mind it''s no wonder tracker products proved to be flavour of the month in January with over a third [our] of new borrowers arranging mortgages on this basis. Lower interest rates will also boost confidence in the mortgage market and encourage people to purchase a property."

The Basics of Mortgages

Many people are confused with the word mortgage. I know I am and the first time I came across this word is while playing Monopoly ™ . Since most of the time I am the "banker" I need to read up and explain the rules of Monopoly ™ to my siblings. So it seems that if a player has little cash but lots of property, he can mortgage his property for some cash.

So how does this translate in real life adult world? To put it in simple terms mortgage is a legal agreement between borrowers and lenders. With mortgage a borrower can borrow money from any loan lending organization and give them the right to repossess his property, used as guarantee, if he fails to pay-off the loan amount. I guess when it involves our homes and properties, this is where it can confused and overwhelmed us. So it is best that we know at least the basic about mortgage before embarking on this procedure.

There are many types of mortgage depending on our personal circumstances and ability to repay the mortgage. The main types are fixed rate mortgage where you pay a fixed monthly payment in a fixed period of time, variable rate mortgage has fixed rate of interest for a fixed period of time that is bound to change in future and many more.

Get the right mortgage rates to see if they suit your circumstances and financial management best. In addition to this, you may want to find out if there are any extra costs such as application fees, valuation fees and surveys, solicitor's fees, insurance and so on. Get the help of mortgage brokers or bank institutions to help you make well informed decisions and to avoid the negative effects of mortgage.

Mortgages and Foreclosures

Mortgage is part and parcel of home buying. It is a method of using property (real or personal) as security for the performance of an obligation, usually the payment of a debt. There are many different types of mortgage rates, whether fixed rate or adjustable rate mortgage depending on your needs and type of property. Different companies also allow for the flexibility of refinancing in the case that you are not able to pay off the monthly repayment rates. One can also have the choice of borrowing against the value of one's property even when they have taken a mortgage on their current property. This is called a home equity or second mortgage.

Foreclosure is the proceed in which a bank or other secured creditor sells or repossesses a parcel of real property (immovable property) due to the owner's failure to comply with an agreement between the lender and borrower called a "mortgage" or "deed of trust." Commonly, the violation of the mortgage is a default in payment of a promissory note, secured by a lien on the property. When the process is complete, it is typically said that the lender has foreclosed its mortgage or lien. You can view a list of foreclosures here.

Granted that whether we are moving or relocating due to personal circumstances or by our own choice, it is a big decision and stressful matter. At National Relocation ( http://www.nationalrelocation.com), it offers many relocation and rental services. Find out the moving quotes and other services to help you make an informed decision.