Category : Mortgages

Mortgage Advice

The value of our advice

The value of our advice

Good financial advice and planning helps people to protect and build their assets, make the most of their investments and help to achieve the goals and lifestyle they desire.

Establishing priorities
Every client we meet has a unique and varied range of financial planning needs, so it’s important to establish priorities right from the start if we are to create a meaningful and relevant plan.

As time passes, your financial plan will need to evolve, and regulatory changes can impact the effectiveness
of any structures already in place. That’s why we recommend a regular review to ensure that your plans remain on track and relevant.

The importance of ongoing advice and service
If you choose to receive ongoing advice and service from us, we’ll invite you to regular meetings where we will monitor the progress of your plans and discuss any adjustments required in the light of changing circumstances.

We believe that ongoing service can help you continue to make well-informed choices and give you the best chance of achieving your goals through key life stages.

Five promises we make to our clients

  1. We will help you arrange your finances so that they work as effectively as possible towards funding your life goals.
  2. We will help you take steps to ensure your income, assets and family are protected from the impact of long-term illness, disablement or death.
  3. We will advise you on how your investments can benefit from relevant tax reliefs and allowances. We will also advise you on the most effective way of withdrawing income or capital from your arrangements when the need arises, or how best to pass wealth to your intended beneficiaries.
  4. We will help you keep your plans in focus by regularly meeting with you to review and refresh arrangements. This might be a result of changing personal circumstances, legislation, new opportunities and any other factors relevant to your situation.
  5. We will be accessible and responsive whenever you wish to contact us with queries or requests.

For more information about any of our services, please get in touch.

Financial Advice

The value of mortgage advice

The value of mortgage advice

With so many mortgage lenders offering their products on the high street and online, it can be tempting to cut out the middleman and ‘go direct’.

But when you’re making such an important financial commitment, the guidance you can get from a qualified mortgage adviser can be invaluable. Here are five ways we can make a difference to your mortgage search:

  1. We know what a good deal looks like
    We have access to a wide range of well-known lenders and thousands of mortgage deals, so we can find a
    rate that suits you. But we also look beyond the rate. Lender administration and booking fees, length and
    type of loan, valuation costs and repayment methods can all affect the total amount you pay. By considering
    all these elements, we can recommend a solution tailored to your individual circumstances.
  2. We know the market
    If your needs or circumstances are ‘out of the ordinary’, it may be much harder for you to find a mortgage now than it was a few years ago. This is particularly true if you’re self-employed or a small deposit, or are
    borrowing into retirement. We can save you the time and hassle of trawling the market, and help you find a
    lender willing to provide your loan.
  3. We’ll do the hard work for you
    Selecting the most appropriate mortgage is just the start. We’ll work with you to complete all the necessary
    application forms, liaise on your behalf with solicitors, valuers and surveyors, and help to make the
    process as smooth as possible.
  4. We’re professionally qualified
    Unlike many branch and telephone-based mortgage sellers in banks and building societies, we’re qualified
    to advise you on a broad range of lenders and products. This means you benefit from genuine choice coupled with quality advice.
  5. We go beyond the mortgage
    We can help you safeguard your investment in your home by advising on a range of products that can
    financially protect your home, and your family, should the worst happen.

If you’re looking for a new mortgage, we’d love to help.

Your home/property may be repossessed if you do not keep up repayments on your mortgage.

Mortgages

Mortgage-savvy millennials

Mortgage-savvy millennials

When it comes to their mortgage, are younger people making better financial decisions than their older counterparts?

The term ‘millennial generation’ applies to people born somewhere between 1980 and 2000, a 20-year span which also saw a huge rise in property prices. At the start of 1980, the average house price was £22,677, but by the end of 2000 this had risen to £81,628. Today the figure stands at £209,971.

A recent study shows the dramatic rise in property prices means just one in five 25-year-olds can afford to buy a property, and the average age of a first-time buyer in the UK has been pushed up to 30. Despite the financial challenges, almost three quarters of UK millennials intend to buy their first home in the next five years.

Repayment vs interest-only
The millennials who’ve bucked the trend and already made the first rung of the housing ladder obviously prefer the concept of reducing their loan month by month, with the vast majority (92%) of 18-34 year olds choosing a repayment mortgage, compared with 68% of those aged 55 and over.

Fixed rate
Younger borrowers also seem to prefer to know what their mortgage repayments are going to be, with nearly 70% opting for a fixed-rate deal compared with 35% of their older counterparts. They also seem happy to shop around, with a quarter remortgaging to potentially reduce their monthly payments, whereas 82% of those aged 55 and over have stuck with the same mortgage.

Offset mortgages also appear to be more attractive to younger generations with one third of 18-34 year olds taking out an offset mortgage (where they will use their savings to either reduce the term or repayments on their mortgage) compared to just 11% of over 55s.

If there is a conclusion to be made from these statistics it could be that millennials are more savvy when it comes to their mortgage, but remember, interest rates have remained at record lows for nearly ten years; something that’s very much in their favour.

Figures correct as at September 2017

Whatever age you are, whether you’re looking to buy for the first time, remortgage or move up the housing ladder, please get in touch to see how we can find the right mortgage for you.

Your home/property may be repossessed if you do not keep up repayments on your mortgage.

conveyancing

Do you know your credit rating?

Do you know your credit rating?

If you’re looking to take your first steps onto the housing ladder you may have sacrificed your takeaways and holidays to save the deposit and scoured hundreds of houses online. But have your checked your credit history?

Even if you’re remortgaging or moving up the housing ladder your credit history will be important.

What is a credit score?
A credit report includes details of your credit history including any credit you’ve applied for (like loans,
credit cards, and overdrafts), credit you’ve been given and how you’ve managed the repayments. Also included are your address details (current and previous), public records such as county court judgments and financial associates (someone who is financially linked to you eg. a joint mortgage or bank account).

All the details in your credit report are analysed to calculate your credit score. This score is used by
lenders as an indication of how you’ll manage and repay the money you borrow.

Scores on the doors
The general rule is the higher the score the better, and the more likely you’ll be accepted for a mortgage or other credit.

If you’re looking to take out a mortgage or remortgage, check your credit score regularly. You can usually get a simple overview for free and it pays to check with several different sources. Noddle, Equifax, ClearScore and Experian all offer a service to help you understand your rating.

According to research from Experian, when the home buyers who were surveyed checked their
credit 18% found their score was lower than expected. The good news is that there are ways
to improve a low score:

  • Pay more than your minimum payments on credit cards
  •  Bring your overdraft down
  • Close unused credit accounts
  • Register for the electoral roll

Happily, 54% of those surveyed found their score was higher than expected and 25% were surprised
by their score. Given that 43% of people haven’t checked their credit score it may be that many are unaware of the impact it may have until they come to apply for a mortgage.

If you’re a first-time buyer looking for a mortgage or a homeowner looking to remortgage, please get in touch to see how we can help find the right mortgage for your circumstances.

Your home/property may be repossessed if you do not keep up repayments on your mortgage.

conveyancing

How to choose a good conveyancer

Conveyancing is an important part of the home buying process, and it’s important to note it’s required when both buying and selling a property.

So what should you consider when choosing a property solicitor to carry out your conveyancing? It’s important to use a qualified property solicitor who’ll be able to take care of a range of issues on your behalf, including:

fixed rate mortgage

Thinking of fixing your mortgage?

Thinking of fixing your mortgage?

If you think an increase in your mortgage repayments could have a negative impact on your lifestyle or financial wellbeing, you may want to consider fixing your mortgage.

With a fixed rate mortgage, your payments are set at a certain level for an agreed period, regardless of whether your lender changes its Standard Variable Rate (SVR). Such an increase typically occurs when the Bank of England Base Rate starts to climb.

Fixed rate mortgages can offer protection from rate rises for an agreed period, but there are several considerations you’ll need to think about before making your decision.

Predictable repayments – but you won’t benefit from rate cuts
With a tracker mortgage, your monthly payment fluctuates in line with a rate that’s equal to, higher, or lower than a chosen Base Rate (usually the Bank of England Base Rate). The rate charged on the mortgage ‘tracks’ that rate, usually for a set period of two to three years.

Tracker rates might be more appealing if you don’t have a fixed budget and can tolerate higher mortgage payments if rates rise, whilst being able to benefit from reduced monthly mortgage payments if rates go down.

But with a fixed rate mortgage, the rate (and therefore your repayments) will stay the same for an agreed period. A fixed rate mortgage makes budgeting much easier because your payments will not change – even if interest rates go up. However, it also means you won’t benefit if rates go down.

Longer fixed terms will be more expensive

If you choose a fixed rate mortgage, you’ll need to decide how long you want your fixed rate to last. Two-year fixed rate mortgages typically offer the lowest initial interest rate. If you want to fix your interest rate for longer, you will probably pay more
for that longer-term security. This may be worthwhile in return for predictable repayments, or you might choose to take the lower rate for a shorter timeframe if you expect that your financial position will improve by the time the deal ends.

A change in circumstances could cost you
Do you have any known changes on the horizon that will have an impact on your mortgage?

With a fixed rate mortgage, you could face an early repayment charge if you repay all or a certain percentage of the mortgage during the fixed rate period.

If you have no known changes and want to benefit from a longer period of security, then a longer term fixed rate of five years may appeal. It might cost more initially, but you’ll benefit from knowing that your budget is fixed for that period.

Your home/property may be repossessed if you do not keep up repayments on your mortgage.

Don’t be drawn into trying to second guess what will happen with interest rates over the coming years. We can help you come to the most appropriate decision for your next mortgage.

Mortgages

The ninth largest lender

The ninth largest lender

34% of first-time buyers relied on their parents for financial help, making the bank of mum and dad’, the equivalent of the UK’s ninth largest lender in 2017.

If you’re trying to get on the housing ladder, you’ll know how hard it can be
• The average price of a first home is over £200,000 in the UK (and £400,000 in London)
• The average first-time buyer deposit has more than doubled over the past decade from £15,168 in 2006 to £32,321 in 2016
• Only 29% of all first-time buyer purchases in 2016 were below the £125,000 Stamp Duty threshold.
• 28% of all first-time buyers with a mortgage opted for a 30 to 35 year mortgage term (in 2016)

With numbers like those left it’s little wonder that so many first-time buyers turned to their parents for financial support in helping them buy their first home. In fact, according to a recent report from Legal and General, the bank of mum and dad could lend more than £6.5bn in 2017, a massive 30% increase on 2016.

The money will help to buy £75bn worth of property and puts parents on a par with the UK’s ninth largest mortgage lender, the Yorkshire Building Society.

Is parental support sustainable?
The bank of mum and dad makes an average financial contribution of £21,600 for each property. And of the buyers who received support from their family, 57% received it in the form of a gift while just 5% were given the money as a loan with interest.

According to Legal and General a loan by the bank of mum and dad could wipe out just over half of a family’s available net wealth, raising the question of whether this type of support is sustainable over the longer term.

Your home/property may be repossessed if you do not keep up repayments on your mortgage.

If you’re looking to buy your first house with help from your family, we can help you find an appropriate mortgage deal for you.

If you’re still in the process of saving your deposit (typically 16% of the value of an average first home), we can help you explore the different ways to invest for your near, mid and long-term plans.

Buy to Let

Buy to Let Mortgage market changes

Buy to Let Mortgage market changes

The UK’s Buy to Let market is in a state of flux, with an extra 3% Stamp Duty on the purchase of additional properties and changes to the way a landlord’s income is taxed.

Landlords used to be able to deduct all finance costs from their rental income, with net profits taxed at their marginal rate. Starting in April 2017 tax relief available for buy to let related finance costs will gradually reduce each year. Phased over 4 years it will finally be restricted in 2020/21 to a basic rate of tax, currently equivalent to 20%.

In September 2016, The Prudential Regulation Authority (PRA) – those responsible for the prudential regulation and supervision of around 1,700 banks, building societies, credit unions, insurers and major investment firms – announced expectations of firms’ underwriting standards to apply to the Buy to Let market.

What you need to know

The PRA changes mean that landlords:

  • face tougher affordability assessments which take into account borrower’s costs including tax liabilities, verified personal income and possible future interest rate increases.
  • must provide evidence that rental income covers their mortgage payments by a minimum of 145% at an interest rate of 5.5% for all products other than longer term (five years plus) fixed rates.
  • with four or more properties, will have their whole portfolio assessed for affordability by the lender – even where other Buy to Let mortgages are held with different lenders.

With all of these changes many landlords may find their portfolios are less profitable.

Incorporation

According to research by the National Landlords Association (NLA), one in four landlords are considering setting up limited companies to negate the tax changes. If you hold a property in a company, your profits are liable for Corporation Tax at 20%, however, if you hold an investment property personally, your rental earnings are combined with your other earnings (such as income from your job) and taxed as Income Tax up to 45%.

At first glance a company structure could look more tax efficient, especially if you are a higher rate tax payer. But before you consider incorporation you should take into account the cost of commercial mortgages.

There’s no doubt the changes in the Buy to Let sector can cause some confusion but we can help find the most appropriate solution for you.

This information does not constitute tax advice. For more details on how this will affect your circumstance you should consult with an independent tax adviser.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

Some Buy to Let mortgages are not regulated by the Financial Conduct Authority.

Your property may be repossessed if you do not keep up repayments on your mortgage.

If you’d like to find out more about Buy to Let mortgages, please get in touch

downsizing your home

The downside of downsizing

The downside of downsizing

The decision to sell up and move to a smaller property could come as a result of children flying the nest, the need to free up cash, or both. Whatever the reason, there are costs to downsizing that are important to know about before you make the move.

The ‘hidden’ fees
Research from online estate agent OwnerSellers.com suggests it costs an average of £17,843 to downsize, thanks to estate agency fees, stamp duty, conveyancing fees, surveys and removal costs. These add up to a sizeable chunk that can eat into
any equity released from the sale of the house.

The figure is based on downsizing from a detached family home in England worth £381,211 to an average two-bedroom apartment costing £268,174. In principle the move would free up £113,037, but when you take into account the additional costs this drops to £95,194.

Reducing the cost of downsizing
If you’re thinking of downsizing, there are ways to reduce the fees you’ll incur. For instance, if you’re looking to relocate, you might be moving to a cheaper area where properties don’t attract as much stamp duty. Estate agency fees can vary so it pays to shop
around for offers; like free valuations, or no up-front fees, or perhaps choose an agent who’ll sell your property for a fixed fee.
If you still require a mortgage after downsizing, we can help you find the right mortgage rate for your circumstances, particularly as we have access to some exclusive deals that you may not be able to get on the high street.

Researching all the costs up front, from stamp duty and estate agency fees to conveyancing and finding the right mortgage can help make downsizing work out for you financially.

Please talk to us if you’d like any help or advice on your next property move

Your home/property may be repossessed if you do not keep up repayments on your mortgage.

First Time Buyers

Buying for the first time

Buying for the first time?

For first time buyers, getting onto the property ladder may seem like a daunting process, but there is help available.

With demand outstripping supply in many areas, the average UK house price has been pushed beyond the reach of many of the UK’s estimated 335,750 first time buyers. A report from The Land Registry (based on data from November 2016) shows an annual price increase of 6.7%, taking the value of the average UK property to £217,928.

When you consider that first-time buyers would typically put down around 20% against their first home, it’s no wonder that finding a sufficient deposit is becoming increasingly difficult – especially for those currently renting. In fact, one of the major lenders reported the average first-time deposit has more than doubled since 2007 to more than £32,000.

If you’re struggling to save a large deposit you may be able to find a mortgage rate of 90% or 95% – provided you can meet the lender’s affordability criteria.

The bank of mum and dad
Meanwhile research by the Social Mobility Commission has found an increasing proportion are turning to their parents for help buying their first home. In fact, over a third of first-time buyers in England (34%) are relying on the bank of mum and dad, compared to one in five in 2010.

The ‘bank of mum and dad’ has been a useful financial foot-up for many, but what about parents who want to help their kids but don’t have savings?

Government help
Although the Help to Buy: mortgage guarantee scheme ended in December 2016 the Help to Buy: Equity Loan is still available. The Government lends you up to 20% of the cost of your newly-built home, so you’ll only need a 5% cash deposit and a 75% mortgage to make up the rest. Equity loans are available to first time buyers as well as homeowners looking to move. The home you want to buy must be newly built with a maximum price tag of £600,000.

Other initiatives to help first-time buyers include The Help to Buy: ISA which helps you boost your savings by 25%. For every £200 you save you receive a government bonus of £50. The maximum government bonus you can receive is £3,000.

Sound mortgage advice can take the complexities out of the home-buying process and maximise your chances of getting an affordable mortgage.

At a glance:
335,750 first time buyers in the UK
x2 first-time buyer deposits doubled since 2007
34% of first time buyers rely on parents
£217,928 average value of a UK property

If you need help getting onto the property ladder please get in touch

Your home/property may be repossessed if you do not keep up repayments on your mortgage