The other type of mortgage repayment is flexible. As its name suggests, this type of repayment is really flexible, and it allows a lot of things like overpay, underpay, take payment holidays, and borrow back the overpayments. These look very good, what is the deal with flexible repayments? Are they as good as they look like? There is a category of people who can use flexible repayments: the self-employed or any other group with a fluctuating income. Used correctly, this type of repayment allows the debtor to save a big amount of money. Although it seems simple: the debtor makes overpayments when he has extra money and underpayments when he lacks money, it is not that simple in reality, because most of the people cannot deal with their money properly. A downside of flexible mortgages is that they not always come with the lowest interest rates. After all, people have to pay for all the extra services. Choosing this repayment plan makes it harder to the borrower because now he will pay as much as he can, not a fixed amount every month, like in the case of fixed rate mortgages. |
