Case study: Mortgage advice at the end of product life

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The client

One of our long-standing clients approached us for mortgage advice as his product was ending. He was looking to take out a new 5-year fixed rate product.

Our solution: mortgage advice

We reviewed his options, and looked at suitable products from a number of lenders. The best option for him was to take an offer from his existing high street lender. Our client spoke to the lender, and was offered a competitive rate.

The challenge: changes in rates

A few weeks later we went to apply for this, to find the rate had increased. The client was happy to go ahead with this, but we could see no reason for the change. We therefore suggested he should wait whilst we did a little more digging.
On checking the numbers we found that his loan to value was just under the 80% mark. However on checking the rates we found the rate he was being offered was for loans over 80%. It was possible the lender had changed their recorded property value, but this seemed unlikely.

After much pondering we came up with a possible answer. As the lender charges daily interest, then this is added to the loan every day. This could mean that during the month then he could be pushed over the 80% threshold, and by waiting until his monthly payment was paid, then the original products would become available again. We therefore suggested waiting until the start of the next month, and then re-apply for the product change.

We did this, and were offered the original rate. By waiting a few days and working with us the client saved £1,525.80 over the next 5 years. Had the client gone direct to the lenders website and applied himself he could have ended up with the wrong product without realising.

To ensure you are taking advantage of the right mortgage product, why not call us for on 01543  410512 and make an appointment for a free mortgage advice consultation.

3 financial steps to take to protect the important things in life

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In the last few months have you stepped back to consider what is important? Have you been reviewing your future plans and finances? Have you realised the importance of ensuring your family and future are protected? After three months of lockdown, we are starting to see shops and businesses opening up. We are all getting used to a new way of working. Now is the perfect time to take some simple steps to ensure your finances are arranged in the best way to support your family. Here are our 3 steps to financial planning.

Step 1: Getting your finances in order

For most of us our mortgage payment is the biggest item of monthly household expenditure. You may have applied for a mortgage holiday in recent weeks. If you haven’t, the option is still available. However, if you can avoid this, we would suggest you do so. Some lenders are saying they think this should affect your ability to borrow in the future.

Aside from this, it can be a good idea to check if you are on the best mortgage deal. We may be able to find a better rate or a better option to help you reduce that monthly payment. There has been a change in the mortgage market, with lenders trying to keep their borrowers more actively, rather than borrowers having to change lender every time their mortgage product ends. However, your existing lender won’t do a thorough review of the market for you! We will review what they have to offer and advise you on the alternatives, for example whether a 2 year or a 5-year fixed rate might suit you best. When we find the right product – whether this is with your current lender or a different lender – we can arrange a transfer for you on your behalf, often at no charge to you.

Step 2: Planning for your future

Are your pension arrangements well planned? If you have been working for any length of time, it is likely you have a number of different company pension schemes and maybe a personal pension which needs reviewing. Now is a good time to ask, are you in the right plan, are you investing in the right funds and are you paying too much in fees?

We can help you identify what plans you have, and check that they are still suitable to support you in retirement. A quick check can also reveal who stands to gain any death in service benefits, which you can change.

For our small business owner clients, we can help you plan a personal pension scheme to support you in the future. Even if your business finances are under pressure right now, starting a pension is an essential step.

Step 3: Supporting your family

Whenever we see a client, we always check to see if they have made a will. So many financial arrangements are set up to benefit you in your lifetime. But did you know they can also be structured to support your family after your death? If you would like us to recommend a solicitor to help you with this, or if you need us to work with your solicitor, please let us know.

We can also ensure that you have arrangements in place to support your family after your death or if you can’t work because you are ill. If we have learnt anything in 2020 it is that life can take some very unexpected turns. We can find the right type of plan at the right monthly costs with cover levels that are right for your needs. We can check any existing plans you have to make sure they are still suitable for you.

Hopefully our 3 steps to financial planning were helpful. If you would like to speak to us about any aspects of your financial planning, get in touch. We are booking appointments either in the office in Lichfield or via video call. Call us to make an appointment 01543 410 512

Financial planning when going through a divorce

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Divorce is stressful. We can at least help in taking part of that stress away for you.

Sometimes our services are needed most when our clients are going through a stressful change in their lives. Recently Paula has been advising several clients who are going through the divorce process, working with them and their solicitor. Here she offers some key financial issues to think about when you are going through a divorce or separation. She also covers what information you may need to provide for us and your solicitor to advise you appropriately.

Mortgage planning for divorce

If your separation means you need to sell your home – what your solicitor will refer to as the matrimonial home – you will need to consider whether you need a mortgage in order to buy a new property. You will also need to have an idea how much you may need.

In order to help you with this, you will need an idea of what the matrimonial home is worth, the amount of any existing mortgage and an indication of how any equity may be split between you and your ex-partner. Proof of earnings will be needed to help you obtain a new mortgage. You will also need an idea of the value of any property you are looking to buy. We are happy to talk to you about getting a mortgage in principle so you can have that conversation with your solicitor.

Pensions considerations

The value of your pension and your ex partner’s pension will be taken into account with any financial settlement. You will need to supply your solicitor with the Cash Transfer Value of any occupational and private pension schemes. We can obtain that information for you if you wish, to help you to fill in form E.

If you are allocated a pension sharing order as part of the settlement, you will need some idea of where you are going to invest that money. If you have a private pension plan it may make sense to invest it here. We can look at the amounts involved, and consider how close you are to retirement age before we advise you.

You may need to access some capital in the short term for example when you are waiting for your matrimonial home to sell. If you are over 55, you may be able to release a tax free cash sum from your pension pot to help you.

 

We do understand that considering your financial affairs while going through a divorce is stressful. Our aim is to help you consider all the possibilities to help you make the right decisions. We want to ensure the financial aspects of the divorce go as smoothly as possible for you.

If you would like to book an appointment with Paula to discuss any of these issues, please call us on 01543 410512. We do not ask for a fee for an initial meeting, where we can meet to check whether we can offer what you need. Any business that we conduct on your behalf will be subject to a fee. We will always advise you of up front before we start any work for you.

We are now members of the Equity Release Council!

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Equity Release is a subject that has become prominent in the news recently, as more and more people are looking to raise funds through their property. Equity Release is one way of doing this, and we are now proud to say that we are members of the Equity Release council!

To become a member of the Equity Release Council, we must adhere to their high standards and principles. Therefore, we will always:

  • Ensure that all our actions promote public confidence in equity release as a potential retirement solution
  • Act at all times in utmost good faith
  • Communicate high expectations for equity release outcomes in all our dealings
  • Ensure conflicts of interest are managed fairly and reduced to the lowest practical level
  • Exercise due skill, care and diligence in all that we do and uphold the standards set out by our professional bodies at all times
  • Always act with the best interests of our clients being paramount, treating our customers fairly in all our actions.

If you would like to know more about Equity Release, and how this could be of use to you, please contact us on 01543 410512, or email enquiries@acuityfinancial.co.uk.

You can also visit the Equity Release Council website at https://www.equityreleasecouncil.com, where you can find more information about the council and what it does.

Mortgage product ending soon? Thinking maybe of just changing product?

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Let us check whether this is best for you, and if it is we can normally arrange it for you, without charging you anything.

That’s right. There has been a seed change in the mortgage market, with lenders trying to keep their borrowers more actively, rather than borrowers having to change lender every time their mortgage product ends.

Some are better than others. Some lenders will offer all their mortgage products to existing borrowers, some will have a limited range with the best rates only being given to new borrowers, though they are now becoming the minority.

A further change is that many lenders have changed their systems so that we can access your mortgage account (with permission of course!), and if it is in your best interests we can arrange a product transfer for you.

We will always check whether you would be best served by changing lender, as we can look at thousands of mortgages, but if the current lender does offer good rates this is much easier to arrange than a remortgage.

It should be quick, normally doesn’t need underwriting again, and there is no need to use a solicitor to change lender.

And, again a recent change, most lenders will pay us a fee for arranging this. If so, and the case is straightforward as it should be, then we won’t need to charge you anything directly for arranging this for you.

So, if your product is ending in the next 4 months why not give us a call. We can advise you, arrange everything for you, you will get advice on your options which most lenders won’t offer, and it won’t cost you anything.

What do you have to lose?

Secure a very low fixed rate mortgage now whilst you can!

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According to Bank of England Governor Mark Carney, a rise in interest rates could be happening in the “relatively near term”.

The Bank of England will next review the current interest rate on the 2nd November, so there is no time to lose. Contact us now to secure a fixed rate mortgage whilst rates are around ‘record low’ levels, because it won’t forever!

Email: enquiries@acuityfinancial.co.uk     Tel: 01543 440 300

 

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