• Business and Finance
• Family
• Computers and Internet
• Auto and Trucks
• Education
• Health
• Hobbies
• Home Improvement
• Legal
• Marketing

• Home
• Arthur's Articles Home
• Browse Categories
• Browse Authors
• Submit an Article
• Search for Articles

Home » Business And Finance Articles » The Two Basic Types Of Uk Mortgage

The Two Basic Types Of UK Mortgage

In the United Kingdom there are two main mortgages that people choose between when purchasing their home. Other options are available but for the large majority of people, it is one of either the fixed-rate mortgage or the adjustable-rate mortgage which is best suited to their requirements.

The fixed-rate mortgage is the most simple of mortgages and the one which most people see as the traditional way to purchase your home. This involves the mortgage provider lending you the money you need to buy your home and, using their interest rate, calculating how much interest the loan will accrue over the period for which the mortgage has been borrowed. This is usually either 15 or 30 years. The sum of the interest is added on to the amount being borrowed and the monthly repayments are simply the result of this total divided by the number of months over which the mortgage will be repaid. This ensures that the monthly amount stays the same for the life of the mortgage.

The adjustable-rate mortgage is slightly different. The interest to be paid on the amount of the loan that you borrow changes dependent on interest rate changes in the country. The first year of the mortgage is usually offered with a teaser rate of interest. This is generally slightly lower than the market interest rate. After this point the interest reverts to the standard level for that time. However, you do have a cap at which point the interest will not get any higher. This is usually five points higher than your teaser interest rate so if your teaser was 4% your cap would be 9%. The important thing to consider if you are thinking about opting for the adjustable-rate mortgage is that you may have to pay the capped level of interest for the life of the loan. That is the worst case scenario but it is certainly worth calculating whether you could afford this level of monthly repayment just in case you may have to in the future.

And here is another random article you might be interested in...

The Big Picture: 5 Questions that Can Boost your Business

As business managers, entrepreneurs, and Webmasters, we strive for unobtainable perfection. Why do I say unobtainable? Because when we focus on perfection in one area, we forego attention elsewhere. Limited money and time mean you must choose from the endless parade of advice and recommendations. This creates a dilemma. How do you choose which to embrace and which to pass up?

Consultants, specialists, and/or other departments within your company will eagerly give advice from their viewpoints. You will hear the benefits of focusing on "___" (Fill in the blank with appropriate specialty.). This is not a bad thing; it is their job to sell you on the advantages of their specialties. It is *your* job to probe for the downsides and tradeoffs.

Different Perspectives

Back in my brand management days, it was sometimes frustrating when individual departments could not grasp The Big Picture. The graphics department and the outside ad agency wanted to get artsy when artsy wasn't the best strategy. Manufacturing was only worried about throughput and efficiency - never mind what the customer wanted. Each department was doing what it could to optimize its own function, but this did not always work in The Big Picture.

If all functions were "optimized", it could be to the detriment of the project. When resources are spread too thin and timelines expand, implementation suffers.

In the virtual world the same Big Picture problems occur. Search Engine Optimization (SEO) firms focus on page optimization and submission. Copywriters tout the best way to write content. PR firms tell you how to send press releases. Marketing gurus sell proven programs. Yes, 95% of the advice makes sense in theory. Toss in a dose of reality, however, and you may have an unmanageable mess.

The Big Picture

When reality hits, you find it is simply impossible to optimize all areas of your business. You cannot grind everything to a halt while you try for detailed perfection. God may be in the details, but profit is in the implementation. As manager or "chief cook and bottle washer", it is your job to bundle the advice into a profitable package and make it work.

Once you accept that some areas are going to be initially less than perfect (Providing you with opportunity over time to improve.), the challenge is to figure out what makes sense for your business and site. When is it critical to optimize and when is less than perfect acceptable?

When considering specialist's advice, ask yourself these five questions:

1) Does it solve a problem?

One of the best ways to comprehend the importance of an action is to relate it to a problem. If you think strategically - first identifying your major problems, then designing solutions to solve those problems - your business is more likely to thrive.

2) What are my alternatives?

There is always more than one solution to a problem. If you evaluate different approaches, you will ultimately make better decisions.

3) What are the downsides?

Perfection and optimization are in the eyes of the beholder. What you see as a disadvantage may seem trivial to the specialists. Ask questions and do some research on your own to uncover the downsides.

4) Is it likely to be profitable *for me*?

It is a cruel fact that larger companies can afford programs that smaller companies and individuals cannot. If you have to go into debt or dramatically reduce other critical activities to implement a program, your cost increases dramatically. In these cases, carefully weigh the resources required against the potential gain.

5) What happens if I do not do this?

Some activities are "niceties" and some are necessities. Know the difference. If you are losing customers to other sites or businesses, for example, taking action is critical. Some activities - those you *want* to do but do not help solve a significant problem - can be pushed to the back burner.

Incorporating The Big Picture into your decision-making is critical. When you ask yourself these five questions, you are in a better position to make the right decision. Your business depends on it.