| Fixing Your Mortgage For 25 Years
In How Long Should You Fix Your Mortgage For? I tested the hypothesis that all fixed-rate mortgage deals work out about the same, regardless of how long they are fixed for. The gist of the article was that the most important thing is simply to make sure you're one of the people who has some kind of mortgage deal. Of course, as I explained in that article, it's not quite that simple. It's important to compare mortgages and assess your personal circumstances to find the deal that's most suitable for you. That's certainly the case with Nationwide's new 25-year fixed-rate mortgage. Nationwide is not the first company to sell such a mortgage, but it's by far the biggest. Here are the pros: Its deal is 5.49% for 25 years, which means that, provided you never move home, you know for certain the maximum cost of buying your home.It could even cost less, as it allows you to overpay by £500 per month.There is something very appealing in the idea that you will never be hard-pressed by a rapid rise in interest rates.The 3% early-repayment charge ends after ten years.
Investors are chasing modest returns
Intermediate-bond funds, with average maturities typically between four and 10 years, drew slightly more than $12 billion in net new money from investors over the first two months of 2007, reports the consulting firm Financial Research Corp. That beat every other category of stock, bond, or hybrid fund, whether international or domestic.
Nothing so odd about this, you may say. In uncertain times, fund buyers are understandably turning to a conservative, middle-of-the-road investment. The trouble is, they are being poorly paid for doing so.
Investors certainly aren't scrambling after performance. Intermediate-term bond funds have returned a modest 3 percent a year over the past three years, and 5 percent over the past five years, according to researchers Morningstar Inc.
Fight brews over home equity loans
Nearly a decade after voters approved home equity loans in Texas, a high-stakes legislative fight is brewing over some of the major consumer safeguards in the law. The debate could determine whether bankers can continue to charge fees that a State District Court has ruled excessive and whether lenders can continue to take most applications over the phone. Consumer groups say that practice is rife with potential abuse and contributes to mortgage fraud in all types of home loans. The chairman of the House Financial Institutions Committee, Rep. Burt Solomons, R-Carrollton, has introduced a proposed constitutional amendment to the home equity law. One housing law expert said it's critical that the Legislature clarify consumer protections in home equity lending that voters approved as a constitutional amendment in 1997.
|
