Over the years many people have seen investment in property as a way of increasing their assets because as values have generally increased so therefore has the equity in a property. That principle has been the logic behind interest only mortgages whereby the capital sum is not paid off within the monthly mortgage payment. It meant a greatly reduced monthly payment to the mortgage company.
The capital sum was traditionally paid off by taking out an endowment policy over a given period which with normal growth was expected to be worth more than the sum borrowed at the end of the term.
The only other alternative was the sale of the property at the end of the interest only mortgage term. The performance of endowment policies was already poor before the worldwide financial crisis struck a blow to the safety of property as an asset of ever increasing value so that the whole property and mortgage market is something that requires careful thought.
Recent years have seen low interest rates, far below historical levels; this has meant that even those people with many years’ experience in the property and mortgage markets have had to revise their opinions on many aspects of their field.
The internet continues to be a source of information and a place where the pro’s and con’s of the different kinds of mortgages is debated. People can do their own research; a helpful interest mortgage calculator will tell an enquirer in an instant what the costs of a particular loan may be.
It does not provide the means of judging the wisdom of the purchase; that is a subjective decision. However the internet will help anyone wanting to do in depth research into the market place in any particular location, the market trends in recent years and future forecasts.
There are certainly good investments still available in the property market where buyers are able to call the tune due to variable demand.