The Mortgage Minefield

Dear All

If you are considering remortgaging to another lender in order to obtain a cheaper interest rate. Beware! You are about to enter the Mortgage Minefield.

If you haven”t changed your lender in the past few years, then you are in for a nasty surprise. What used to be a straight forward process, has now become a very difficult task indeed. You will no longer be a customer. You will become a profit centre, to be “milked” for the maximum profit they can extract from you.

If you fall into any one of the following categories, then you seriously need to plan well ahead, before you attempt to remortgage:-

1) Aged 40 plus.

2) Have an Interest Only mortgage.

3) Self employed.

So how do you escape from your lender”s clutches? Plan ahead & take independent financial advice.

Lenders have for a while become very ageist. They will discriminate against you if you are aged 40 plus. This is because most lenders take the view that you will retire at age 65. Hence they will limit your mortgage term to age 65. They will want you to be able to fund your mortgage from your pension, investments or other sources. In fact, anything apart from earned income!

If you have an Interest Only mortgage, then unless you have a lot of equity in your property, the new lender will insist that your new mortgage will be on a capital & interest repayment basis. This will make your monthly payments a lot more expensive. The shorter the term of the mortgage, the more expensive it will be.

If you are self employed & having read the above, not given up yet! Then you face another obstacle – your accounts. Lenders now want to see an increasing net profit figure over the past 3 years. If your income has not increased each year, then the lender will “average” your income over the last 3 years. The effect of this will be to greatly reduce your income, which the lender will use to assess affordability of the mortgage. In effect, this will probably kill off your application there & then.

If you have successfully navigated the above, then you can look forward to being credit checked, credit scored & not forgetting, having your personal expenditure assessed for lifestyle issues, which the lender may deem inappropriate.

And if you do manage to successfully pass all the above, you can look forward to paying grossly inflated arrangement fees as your reward.

I haven”t even touched on when the lender does the dirty on you by hiking your mortgage payments, just to boost their profits. I”ll cover this one in another blog.

If you would like to find out more & to discuss your own requirements, please get in touch.

Regards

Gary

The Investment Minefield

The Investment Minefield

Dear All,

This year has seen monumental changes in the provision of Independent Financial Advice in the areas of Investment and Pension planning.

No longer will the basic company projections be sufficient when talking with clients about how their investments are doing and more importantly, how they could be expected to do.

Therefore, a more detailed and holistic approach is required. In response to this, I am now employing a state of the art software system, which allows me to provide my clients with a detailed analysis of their current investment(s) together with an explanation of what areas of financial planning they should be looking at and how best to address such issues which come up.

The other issue which is becoming more prevalent, is a conflict between an attitude to risk and what their capacity for loss is. A perfect example of this is a recent client where the attitude to risk was moderate to high but their capacity mobile casino for loss was low! In simple terms, online casino”s this meant that they wanted to take a reasonable risk with their money but didn”t want to lose any of it. The dilemma for an adviser, is how to satisfy both requirements.

The solution is to provide a thorough examination of the client”s current financial situation and their future aspirations. The client receives a detailed written analysis of where they are now and where they could be. This takes into account, using the latest holistic financial planning techniques, all the information provided. This then becomes the basis for all ongoing financial reviews.

This software is the most sophisticated available and can provide the most accurate projections, which are fully compliant with the new industry regulations.

So, if you would like to see a personal review of how your current finances look and what if any, actions you need to take, please get in touch.

Regards

Gary Minkin

Consolidated Financial Management Ltd 01727 858136
Gary@consolidatedfinancialmanagement.com

An Alternative to Remortgaging

An Alternative to Remortgaging

Dear All,

An increasing predicament for some of my clients is that they would like to raise money from their home but have a great mortgage rate which they do not want to lose.

The usual solution to raise extra money, would be to transfer the mortgage to a new lender & to increase the borrowing at the same time.

However, if you have a very cheap rate, it would not make sense to lose this. So the solution is to look at Second Charge Lending. Like first charge lending (mortgages) rates have come down this year. It is now possible to obtain loans at rates between 6-10%.

At first glance, this looks expensive when compared to a mortgage rate of 2%. However, if you have a sizable mortgage & you are paying around this rate, then the extra borrowing at this higher rate makes financial sense.

A further benefit of this option, is that Second Charge Lenders can be more flexible in their approval of loans than normal mortgage lenders.

So, if you would like to borrow money & have a great mortgage rate, then this could be a cost effective option.

To find out more & to get a bespoke illustration of how much it could cost, please get in touch.

Regards

Gary