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How Lenders Consider Mortgage Interest
 A mortgage, which effectively is a financial loan secured by property, invites mortgage interest. In a 'purchase mortgage' a new property is bought with the loan amount. It serves as security for the loan as mortgage terms permit the lender to repossess the property and sell it for recovering his dues if the borrower defaults on repayment. In a 'Refinance/remortgage', the borrower gets a refinance on an existing mortgage to pay it off and secure a better one. There may be a variety of reasons for a borrower to obtain a refinance mortgage. He may do this to lower his overall interest burden by paying off higher interest charging credit card and personal loans, balance his monthly outgo through a longer repayment period of a low interest rate new mortgage or for changing the terms of his previous mortgage. He may want to free his equity in the house to build a new kitchen or other value adding construction. He may even want to use it to take advantage of a good investment opportunity.
The credit history of the borrower plays an important role in deciding the rate in interest applicable to the mortgage. A high credit score tells the lender that he faces a low risk of losing principal and assures him of steady interest income through the lending as good credit rating is indicative of a trait of timely payment of dues. This leads to better mortgage interest rates for the borrower. A secured mortgage has a collateral security that the borrower provides to back up his intentions to repay his debts against the loan. This involves documentation conferring rights of repossession and sale of the property on the lender in case of borrower's default on repayment. This cushion lowers the rate of interest the lender applies to a mortgage allowing the borrower access to funds at a much lower rate than that of personal loans or credit cards. The personal funds that the borrower puts into the mortgage also have a bearing on the mortgage interest. Usually lenders require that a borrower put in 15 to 20 percent of the total cost and the lender will loan the rest. However there are 100% mortgages also available where the entire amount is loaned. In certain cases the loan goes up to even 125%. These of course carry a considerably higher mortgage interest rate than where just 85% is loaned with the borrower putting in 15% of his own funds as well. Investment property loans like buy-to-let mortgages are also subject to higher interest levels. There is never a bad time to invest in property. Historically, property has always risen in price regardless of any short term trends. Let Mortgages Limited has exclusive access to the best deals for investors who wish to grow their portfolio fast and at the minimum cost. Check out our No Proof Of Rental Income Required Buy To Let Mortgages & for those who are able to negotiate a 15% discount a 15% Builders Deposit Buy To Let Mortgages or 15% gifted deposit will allow you to purchase without using your own funds! "For A 100% FREE Consultation
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