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This is the only way you are going to guarantee that the property is yours at the end of the term. What it means is that every time you make a monthly payment, you'll pay off a bit of interest due and a bit of the capital until the debt is completely and utterly finished.
In the beginning you'll be paying off mostly interest, so if you sell up in the early years you'll find you've hardly paid off any capital at all. But after a few years, you'll be whittling away at bigger and bigger chunks of the capital. Many lenders now offer flexible repayment mortgages too so that you can pay more than the prescribed monthly amount when you can. A repayment mortgage is the surest and safest way to see off the loan. You borrow the money and you pay it back in instalments. |
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