Choosing the right mortgage

Fixed Rate Mortgages

mortgagesThe fixed rate mortgage product will always give a fixed amount of repayment every month no matter what happens, the monetary law of England and the entire United Kingdom fraternity provides for this, so when a customer opt for this method to purchase a property he will have certain advantages, the monthly repayments are set for a certain period of time, the repayment duration can vary depending on several factors as per the agreement, but it can be anything from two years, five years or even more, even if there are changes by the Bank of England in rates, the rates remains the same till the full repayment period is recovered.

Earlier Redemption:

Once a fixed mortgage contract has been signed between the borrower and the lender, it will have to run its full course to the agreed time, once the duration has expired the lender rate automatically reverts to the Banks market rate, but should the borrower wish to change the terms to shorten the duration, there is a penalty of extra amount he will pay because of changing the terms, so you must scrutinize well the terms and duration of your fixed term mortgage to be prepared to serve it appropriately, by doing this the borrower will avoid any unnecessary penalties if terms are changed, but the borrower is more advantaged since the rate is fixed.

Mortgage repayment:

A repayment mortgage facility is very common in the UK region, many borrowers find it very convenient since it’s much easier to budget about it on a monthly basis, the type of mortgage is known by other terms as capital repayment mortgage, the monthly fixed amount made by the borrower from their account (or basic bank accounts if they have bad credit) contributes directly towards the final amount plus the interest, the fixed rate of the interest will make the repayment amount also to be fixed, it becomes easier to determine how much to pay on a monthly basis without any alteration whatsoever.

What is better Repayment Mortgage:

The longer period of mortgage often eats into a borrowers pocket so much, this happens owing to the longer period of repayment which weighs down in terms of interest payable over the period, a shorter period of fixed mortgage will do since the repayment and total amount will be lesser than the former, but there is a catch here due to personal circumstances of the borrower, the borrower should be able to make repayments without strain on the budget, the shorter mortgage period is very suitable to a person who can afford the slightly higher monthly repayment, this kind of repayment mortgage will not tie the borrower down for too long.

Advantages of a fixed mortgage:

Making the required monthly repayment amount on a consistent basis will give a guarantee of finishing it, this can be seen when the full term of fixed mortgage ends, it wattles down the investment risk of which its performance is pegged on to the stock market, the fixed mortgage terms are more flexible and straight forward without any other added factors, your property value will ever go up as time goes by, when this happens you are able tom get even a better deal when you remortgage, sometimes borrowers remortgage when they move homes for ,one reason or the other, the equity value will shield the borrower’s credit worthiness.


One aspect of the fixed mortgage is that the borrower is not likely to benefit on stock market if it soars above the mortgage term, this makes it challenging in case of early mortgage repayment which is inhibited by the terms, getting a lump sum amount after the full term is also not possible. Movement to another home in earlier years of the fixed mortgage will still give the borrower same terms.

But when all is said and done, – fixed Rate Mortgages has more pros than cons making it a very convenient credit product, it makes it possible even for low income earners to acquire a property.

Banking in the modern age

Real-World Applications In Banking and Finance

Modern bank current accounts in many cases are more than simply somewhere safe to store your money and carry out your regular banking practices, with banks offering customers various other advantages. Many banks for example offer insurance policies with their accounts or maybe cashback on some of your spending. Most accounts will even feature an annual interest payment on the balance of your funds. Many, if not all accounts will also offer a debit card that may be used to pay for goods in shops or via the internet. To be able to qualify for a bank account with added advantages, particularly when an overdraft facility (the facility to spend money that isn’t in the bank account, up to an agreed sum) is demanded, customers usually need to have a good credit rating and to have a minimum sum paid into the account on a monthly basis.

Joint Current Accounts

Joint bank accounts would normally be taken out by a couple, or a group of close pals, and are in fact very similar to a conventional bank account. With this kind of account you’ll be able to pay things like invoices from the exact same place, instead of from separate accounts, which can be a tremendous edge. Any spending, nevertheless from a joint account is not confirmed by both account holders, so it’s essential that you’ve got an excellent degree of trust in anybody that you’re thinking of opening an account with. It is additionally significant to remember that any debts that are amassed by on man’s spending will be liable to be paid by all parties. All applicants would additionally need to pass a credit check so as to qualify for this kind of account.

Business Accounts

A business account gives you all of the attributes of a personal account, but also allows you to differentiate between your business and personal spending. Indeed, if your business is set up as a limited company or a partnership then it’s a requirement which you have a business account. You will additionally need to have two crucial signatories for such an account, although others may also be added if needed. Sole traders really are able to ascertain, whether they wish to use their own personal account or a business account for their transactions and may also discover their own authorisation practices. There are many different types of company accounts, with attributes that range from the fundamental cheque book and debit card, all the way up to having advantages including loans and business advisors.

With the serious effects that bankruptcy has on your credit rating, it can be quite a daunting and difficult procedure to set up an account if you discover yourself in that scenario. However, if you have been declared insolvent you wont manage to get credit, but will still be able to open an account. What this means is that any account you are eligible for is likely to be a basic account without any extras and most banks will not offer these to undischarged bankrupts. There are additionally bonded bank accounts, these enable customers to open an account with no credit check and as stated customers are guaranteed to be accepted. Although, you might have to pay a small fee in order to open such an account.

Accounts for Children

In order to start an account a kid must be around eleven years or old. These accounts are very similar to adult current accounts, in they can offer children a debit card to allow them to get up to GBP100 from a cash machine per day or pay electronically in store or online. Most banks offer two accounts for 11-16 year olds and 16-17 year olds, with the account for older kids usually giving them the luxury of drawing more cash a day, if they want. From the age of seven, kids are also able to start a savings account. Bank accounts for kids never use a credit facility, so children can only spend what is in their account and no more.

Having a poor credit rating does not mean that you wont be able to start an account with direct debit facilities, and a debit card. All banks offer what is called a basic bank account as one of their services, while you might have to request at the counter for it, and maybe carry out some research before you go. They normally feature all of the same things as a normal current account, although they don’t generally pay interest on your funds or offer you an overdraft ability. Most individuals are tolerated for basic bank accounts, even if, for example they’re now in an IVA, DMP, DRO or are a freed bankrupt.

Student Accounts in the UK

Student bank accounts offer all the facilities of a normal account with the added advantage of a free overdraft, provided that customers stay in their contracted overdraft limit. After opening your account, as a student you may receive various other benefits and features. You’ll have to be in university to start a student account, and the bank will generally require some sort of proof that you’re attending a lessons. In order to keep your overdraft capability for a further year after you’ve completed your course you’ll normally have the skill to open what’s referred to as a graduate account.

Opening a student bank account in the uk

Most banking institutions in the United Kingdom are targeting students. They have gone ahead to provide accounts that are meant to serve the students’ needs. These accounts offer a range of services including overdrafts. Each bank has different specification of the student account. There is therefore need to have knowledge of things that you need to consider before you open a student account.

Requirements for a student account;

  • You must be above 18 years.
  • You must be a resident of UK for a period of at least three years prior to application.
  • You must be a full time student in a UK recognised higher education institution.
  • You should have a letter from the institution you are studying in confirming your admission.
  • You should also have a student identification card that is recognised.

After you have fulfilled the above requirements, you now start considering the available choices of a student account. Your aim should be to get the best deal. There are various tips that can assist you in getting the best student account. Some of the tips are discussed below.

Avoid freebies.

Some of the banks will offer short term offers to try and win more customer. Such offers might make you miss a long term benefit in a different bank. You should there avoids short term offers which include cash rewards and consider the banks that is offering long term benefits such as a long time interest waiver.

Student over draft.

Some of the banks will offer large over drafts than others. The advantage of overdrafts is that they carry no interest. You should consider a student account that will allow high overdrafts. You should also ensure that the overdraft is guaranteed. Some banks promise the overdraft but you finish you studies without getting it.

Understand the conditions of payment.

You need to know the time that the bank expect you to repay the overdraft. Some banks will offer a longer repayment period than others. Make sure that you open a student account with the bank that will be flexible. Some of the banks switch the student account to a graduate or a current account after graduating. You need to understand all this before you agree on the terms of opening the account.

Knowing your credit worthiness.

Ensure that you discuss your credit worthiness with the bank management before opening an account with them. This will avoids the frustration of being denied an overdraft due to credit unworthiness.

Accessibility of the bank.

You should open a student account with a bank which is near or has a branch near the institution you are in. This will prove important when you want to deposit a cheque or you want to submit or collect any document to you bank.

Opening a student account.

You should visit the nearest branch of the bank you have decided to open a student account with to open an account. Some banks however allow online account application for student bank accounts. But the support documents required must be sent to the bank for confirmation