Category : Mortgages

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

Help to buy mortgages

What makes a good Buy to Let investment?

What makes a good Buy to Let investment?

With property prices continuing to rise, Buy to Let can be an attractive way to invest. But whether buying your first Buy to Let property, or adding to your portfolio, it’s important to consider what’s involved.

Being a landlord
As well as the obvious duties of finding tenants and making sure they pay their rent on time, there are also a number of legal requirements that you need to meet as a landlord. For instance, you’ll need to use a deposit protection scheme, have the right Energy Performance Certificates and arrange annual safety checks and certificates for the utility supplies. You’ll also need to keep the property well maintained and respond to requests from your tenants if and when an issue arises.

Managing your finances
Then there’s the question of managing your commitment to the mortgage lender. Interest rates may be low now, but if you’re on a tracker mortgage and rates go up, could your income stand the rise? What if you have a gap in tenants and the rent dries up temporarily?

In the short term, landlords can still deduct mortgage interest from their rental income before calculating how much tax they should pay. However, from April, tax relief on Buy to Let mortgage interest will gradually be reduced. The restrictions will be phased in over four years, resulting in tax relief only being available at the basic rate of income tax (currently 20%) from April 2020. This could impact on any profit you’re expecting to make on your investment so it’s important to take it into account now.

Research before you buy
In terms of the property itself, have you thought about the location you’re buying in? Take the time to look around the area you’re considering. Is it up and coming or going down and out? If you’re looking to rent to a young family, do the local schools have a good reputation? Does it have good commuter links for young professionals? It may sound obvious, but it’s a good idea to put yourself in the shoes of your potential tenants and ask yourself what they would want. Their requirements may be quite different to yours.

Work out all the costs
Buy to Let lenders may require the rent you charge to cover up to 145% of the mortgage repayments, with many now requiring 25% deposits, or even larger. Once you know your mortgage rate and the monthly rent you’re going to charge, you should also factor in maintenance costs.

And with stamp duty 3% higher than on a residential property, make sure you cover all the costs involved in buying your investment property – especially in view of the diminishing tax relief.

Protect your investment
It’s important to protect your property, its contents, and your ability to keep up with your mortgage repayments should the unexpected happen and there are a range of different insurance products designed to meet these requirements:

• Buildings insurance
• Contents insurance
• Landlord’s insurance
• Life insurance
• Mortgage payment protection insurance (MPPI)
• Critical illness insurance
• Income protection

Which product is right for you will depend on your individual circumstances, so it’s important to get professional advice as part of the process.

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

piggy bank

Teaching kids about money

Teaching kids about money

As parents we teach our children a lot: to count, read, say please and thank you and, hopefully, be an example to others.

Research shows that parents also pass on their approach to finances. So exactly how are we teaching our children to be financially astute from a young age?

Pocket money
Compared to some of their European counterparts, British parents with children under 10 are more generous when it comes to paying pocket money. That changes from 10 upwards when they end up paying well below the European average.

Teaching the value of money
Your child’s financial education can begin as soon as they learn to count and a great time to start talking about spending and saving is birthdays or Christmas (if they‘re likely to receive a cash gift).

If your child asks for something expensive: an iPhone 7 for £599, or an Xbox One for £199, try to explain to them the time it would take to earn that amount of money. The minimum wage for a person under 18 is £4 per hour, which means it would take 150 hours or nearly three weeks working full-time, to save for that new iPhone.

How to budget
An important lesson to instil from a young age is not to spend more than you have. Dividing money into different pots is a great way to demonstrate this as it really helps your child to visualise where their money is going. They can also see that when it’s gone, it’s gone.

Try using two jam jars. Label one ‘Spend now’ and one ‘Save for later’. Talk to your child about how they would like to divide their pocket money or any cash gifts they receive between the two jars. If they keep their savings jar topped up, they can see that they have rainy day money if they need it when their ‘spend now’ jar is empty.

You could also add in a third jar ‘Donate to others’ to show your child that they can afford to help children who may not be lucky enough to receive pocket money for their own jars.

Talk to us about investing for yourself or your children

downsizing your home

Parent landlords

Parent landlords

With house prices rising faster than salaries, the younger generation face having to find a much bigger multiple of their income to buy a home, compared to their baby-boomer parents.

Couple this with rising rent payments that stifle the ability to raise a deposit and you can see why ‘Generation Rent’ is a growing population and more kids are looking to their parents for help.

Parent landlords
In the UK, 730,000 parents rent properties to their children and a further 1.4m landlords have said they would be willing to take their children as tenants.

As both the cost of renting and buying a property increases, renting from a parent should help prospective first-time buyers get on the property ladder sooner rather than later. Especially given that just 5% of parents charge the market rate, 30% allow their children to pay whatever they can afford and 12% even go so far as to pay the bills for the property.

Buy to Let
If you have a property you’re considering renting to your children, or you’re thinking of Buying to Let to help out your kids, make sure you consider all the costs involved before you take the leap.

Solicitors, valuers and surveyors are not regulated by the Financial Conduct Authority.

[gem_quote style=”5″]If you need mortgage advice, or you’re looking to help your children onto the property ladder, please talk to us.[/gem_quote]
Mortgage Advisers

Buying for the first time?

Buying for the first time?

For first-time buyers, getting onto the property ladder may seem a daunting process, but there’s more help available than you might think.

With supply and demand at an imbalance, the average UK house price has been pushed beyond the reach of many first-time buyers. August data from Land Registry shows an annual price increase of 8.4%, taking the value of the average UK property to £218,964. When you consider that first-time buyers would typically put down around 20% against their first home, it’s no wonder finding a sufficient deposit is becoming increasingly difficult – especially if you are currently renting.

Help is at hand
A report from Which? shows that just over half of first-time buyers (52%) had to rely on financial support from a parent or family member in order to purchase their home. This ‘bank of mum and dad’ has been a useful financial foot-up for many.

If you’re not able to put down 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.

Government help
Although the Help to Buy: mortgage guarantee scheme came to an end in December 2016, the Help to Buy: Equity Loan is still available. Here, the Government lends you up to 20% of the cost of your 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, provided it’s for a new-build
worth less than £600,000.

The Help to Buy: ISA will help 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

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

Savings

Achieving your financial goals

Achieving your financial goals

We lead complex lives in an increasingly complex world. As your financial adviser we can help you better understand your financial challenges, goals and needs, and help you find appropriate ways to meet them.

Even a seemingly straightforward financial goal can involve numerous decisions and a lot of time and effort getting it right. Whether it’s buying a home, investing for the future or protecting the people and things you cherish, we’re here to help you make the right choices for your needs. Here are some of the services we provide, which our clients have told us they value the most.

Mortgages
With so many mortgage lenders offering products on the high street and online, it can be tempting to cut out the middle man. But when you’re making such a huge financial commitment, professional guidance can be invaluable, particularly if your needs are out of the ordinary. As well as arranging your mortgage we can also recommend specialist professional services that can help with other elements of your home-buying process, including solicitors and surveyors.

Protection
When using comparison sites and direct insurers, how can you be sure their “off-the-peg” solutions meet your specific needs? Using our expert product knowledge we can help you find the right solution for you. Whatever your particular need – be it income, family, mortgage or business protection – we can access high quality products from a range of handpicked providers; providers we have selected because they are proud to stand behind claims when it matters the most.

Investment planning
As well as your pension, you may have opportunities to invest lump sums – such as an inheritance or bonus – but are unsure about what strategy is best. As with all areas of financial planning, it pays to have a clear objective or vision. We can talk you through the important things to consider and help you create a balanced and diversified portfolio, taking into account your financial goals, attitude to risk, and any appropriate tax planning.

Retirement planning
The onus to create a comfortable retirement is falling increasingly on the individual, and the new pension regulations, whilst bringing welcome freedoms, introduce additional complexity to your at-retirement choices.

The right financial plan could help secure a more comfortable retirement – not just for you, but also for your loved ones and heirs. We can help you navigate the complexities of the new rules. Knowing what can be achieved and establishing the right strategy as early as possible can help you prepare for the future.

Inheritance planning
Passing our hard-earned wealth to loved ones often forms a big part of our ambitions. The right forward planning can help you maximise your heirs’ inheritance by minimising tax liabilities. We can help you put the right structures in place.

Of course, your needs in any and all of these areas will change over time, and regulatory changes can impact the effectiveness of any structures already in place, so we recommend a regular review to ensure that your plans remain on track and relevant.

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

The value of investments and any income from them can fall as well as rise. You may not get back the amount originally invested.

[gem_quote style=”5″]To find out more about how we can help you, please get in touch.[/gem_quote]

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

Financial Advice

Are you considering remortgaging?

Are you considering remortgaging?

With continuing low interest rates, you may be considering remortgaging to save money.

Even if your mortgage provider has recently reduced its Standard Variable Rate (SVR), moving to a new mortgage deal could save you money. But before you’re tempted by an attractive introductory rate, it’s worth considering the bigger picture.

Should I stay or should I go?

It’s true that moving to a new deal could save you money, just remember to check that you won’t incur an Early repayment Charge (ERC) if you change your mortgage before the end of your current deal. It’s also worth factoring in any potential legal, valuation and administration costs that may be associated with signing up to a new mortgage deal.

Tougher lending rules

Mortgage regulation may also have changed since you took out your current deal. The EU Mortgage Credit Directive of 2015 introduced stricter lending criteria which has led to mortgage lenders having to take greater steps to check affordability – including on remortgages.

You can expect to be asked to show evidence of your income, such as payslips and bank statements, and your outgoings, including other debt repayments, household bills and living costs such as travel, clothing, entertainment and childcare.

Changing the type of deal

When looking at new deals, you may want to consider a different type of mortgage arrangement to your current deal.
For instance, you may decide you would benefit from the option of payment holidays, or a more flexible repayment arrangement.

If you have significant savings, you may want to switch to an offset or current account mortgage, where you use your
savings to reduce the proportion of the loan on which you pay interest.

Are you still covered?

If you’re thinking of changing your mortgage, remember to review your protection arrangements at the same time – especially if you don’t already have cover in place, or your circumstances have changed since you last reviewed your cover.

The value of personal, family, or income protection should not be underestimated if it means keeping the roof over your heads when you need it most.

With so many areas to consider, it makes sense to seek professional mortgage advice. We can help you weigh up the financial benefits of remortgaging, choose the most appropriate deal, handle your mortgage application and ensure your loan is properly protected.

[gem_quote style=”5″]If you’d like help choosing the right mortgage, please get in touch.[/gem_quote]

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

moving home

Pack up your troubles

Pack up your troubles

Moving home can be stressful, especially if you’re new to the property ladder. But, by following a few simple tips, you can help ensure your move goes as smoothly as possible.

Seek mortgage advice

Try and get a mortgage offer in place before you start the buying process. It can be tempting to cut out the middleman and ‘go direct’ when choosing a deal, but the guidance you can get from qualified mortgage advisers, like us, can be invaluable.

We’ll compare a wide range of lenders and thousands of deals to find the most suitable Mortgage for you. We’ll also advise you on the right insurance cover to make sure you and your new home are protected. And we’ll be on hand throughout the application process to make sure everything runs smoothly.

Choose a reliable estate agent

If you’re selling up and want an estate agent to market your property, make sure you choose one who knows the local market. It’s easy to be tempted by a lower agency fee or higher suggested asking price, but make sure this doesn’t reduce the number of viewings or compromise on service. A comparison site like www.estateagent4me.co.uk can help you come up with a shortlist of agents in your area.

Find a good solicitor

As with estate agents, choosing a reliable solicitor can help remove unnecessary stress from the buying and selling process. You don’t need to use a local firm, but you should consider postal delays when it comes to signing or verifying important documents. Seek recommendations from friends and family where possible and make sure your solicitor is always going to be easy to get hold of.

Pack to a plan

Start packing up non-essential items early on. Label boxes on the top and side with details of what’s inside and where it needs to go, and keep screws and bolts from deconstructed furniture attached to the relevant piece.

Create an essentials box for items you’ll need on moving day (including things like kettle, mugs, lightbulbs, bedding etc.). If you’re paying to use a professional removals firm, check they’re a member of the British Association of Removers.

Small but important details

Make sure you find out those small but important details about your new property before you move in. Ask the previous owner, their solicitor or the estate agent, things like where the stopcock and utility meters are, what day the bins are collected, details of any alarm codes and who supplies the utilities. If the sellers leave any appliances, ask for the instructions and details of warranties.

Review your insurance

While putting buildings insurance in place is normally a condition of your mortgage, it can be easy to overlook other types of insurance that will help you pay your mortgage should you become ill or unable to work. We can help you identify the risks you face and, where appropriate, put policies in place to financially protect you and your family

[gem_quote style=”5″]If you’re planning on moving home, please talk to us about your mortgage and insurance needs.[/gem_quote]

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

mortgage advice

Help to Buy schemes proving successful

Help to Buy schemes proving successful

Over 160,000 people have been able to achieve home-ownership thanks to the government’s Help to Buy housing schemes.

Of those, 118,000 were first time buyers, the average house price was £189,795 (significantly under the national average of £292,000), more than half were for new build homes and all but 5% of completions took place outside of London.

Supporting first time buyers

The Help to Buy schemes were primarily designed to support first time buyers and began with the Help to Buy: equity loan launched in April 2013. This was designed to support purchases of new build properties up to the value of £600,000, with a maximum equity of 20% (40% in Greater London). To date, 81,014properties have been purchased with the help of a Help to Buy: equity loan. Then followed the Help to Buy: mortgage guarantee scheme in October 2013, offering lenders the option to purchase a guarantee on mortgage loans where the borrower has a deposit of between 5% and 20%. 78,749 mortgages have been completed with the support of this scheme and 79% of those are first time buyers.

First time buyers got a further boost in December 2015, with the launch of the Help to Buy: ISA. Since then, more than 500,000 people saving for their first home will benefit from a government bonus of up to £3,000.

Helping people across the UK

Help to Buy is helping people throughout the UK to achieve their dream of owning a new or bigger home. It also appears to be contributing to a potential turnaround in the housing market decline: recent figures from the latest English housing survey show the number of people owning their own home has stopped reducing for the first time since 2003.

With the majority of completions outside of London, the highest number of homes completed through both the Help to Buy: ISA and mortgage guarantee schemes has been in the North West region. The equity loan is particularly popular in the South East region.

City-based first time buyers and second-steppers have been supported further by the London Help to Buy scheme launched in February 2016. The scheme supports purchases of new build homes in the capital by offering a 5% deposit backed by an equity loan of up to 40% from the government. There were 256 completions in London between 1 February 2016 and 31 March 2016 using the equity loan.

Right to Buy

In total, more than 309,000 households have been helped to purchase a home through a government backed Right to Buy scheme in the last six years – that’s 141 new homeowners a day and around 4,350 a month.

Contains public sector information licensed under the Open Government Licence v3.0.

[gem_quote style=”5″]If you’re dreaming of getting onto the housing ladder, or you need more space, please get in touch. We can help you find the perfect mortgage for your new home[/gem_quote]

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