News & Views

Mortgages

There are a few times every year when a letter from one of your insurance providers will drop through your door to notify you of your new premium for the coming year. The chances that these letters will encourage you to shop around for a better deal are about as likely as your new premium being lower than the previous year’s. If you’re paying your premiums by direct debit then as with many financial commitments based on standing payment arrangements, providers often count on the fact that there’s an appeal in sticking with them rather than researching the market for a better price. In fact, there’s research to show that in most cases you’ll get a saving if you do shop around for a better deal. Mortgages are no different. But the latest figures from UK Finance mortgage trends suggest a decline in remortgages that involve no additional borrowing could point to a rise in the popularity of product transfers that see customers sticking with their existing lender. There could be all sorts of reasons why people might do that. Moving lender now involves a lot more effort on the part of borrowers in order to meet much stricter lending criteria and affordability tests. That often means more paperwork and more time. We’re also much busier as a society these days and life moves at a fairly frantic pace – especially if you’re holding down a demanding job, raising a family and trying to make quality time for yourself. And in some cases, the decision to stay with a lender could be entirely pragmatic – for example, maybe you’re being offered a product that, if not cheaper, is close enough to the cheapest alternative that the saving doesn’t justify the effort you think it will take to switch lenders. As a general rule, switching providers at the end of a fixed term deal is more likely to save you money because you’re probably going to be choosing from a wider selection of products and offers. Changing mortgage providers doesn’t need to be as stressful as people may have been led to believe. Although there’s no short cut to getting the right paperwork together, working with a professional mortgage broker can cut the effort you need to put in and ensure you’re getting the full benefit of all the options that might be available to you. A qualified and expert mortgage broker will have access to products you’ll never find by yourself online or on the High Street – all from trusted providers. That means you’ll get the deal that is best suited to your immediate and future needs. A broker will also handle the process of filling in the application on your behalf and managing it through the approvals system. More than that, because a professional broker will have a relationship with the lenders, knows their criteria and will understand your finances, they should be recommending a mortgage that not only suits your needs, but is likely to be approved. Even if you think staying with your existing lender is the right choice for you, it still makes sense to speak to a professional so you get the benefit of their experience and extensive knowledge – it could be there’s a different solution that works better for you. If your deal is coming to an end and you’re unsure of the right steps to take, come and talk to us – we’d love to help.     Want to find out about your mortgage options? Take a look at our short guide to remortgaging.  To find out more about our friendly and professional mortgage service, fees and what we can do to help make sure you’re not paying over the odds for your mortgage, why not visit www.oportfolio.co.uk or give us a call on 020 7371 5063. Oportfolio Limited is an appointed representative of Primis Mortgage Network, a trading name of First Complete Limited which is authorised and regulated by the Financial Conduct Authority Your property may be repossessed if you do not keep up repayments on your mortgage. Oportfolio Ltd fees are payable on application. We charge a broker fee for property purchases of £495 and a remortgage/further advance fee of £395. Our product transfer fee is £295.  

by Oliver Whitehead  -  29 September 2019

Market Trends

If recent media reports are to be believed, the ongoing political uncertainty is having a significant impact on the London housing market. According to the latest price index from estate agency portal Right Move, the impasse on Brexit has shaved £13,000 off the average asking price in the capital in just one month, which suggests hopes that the market might have weathered the ‘will-we-won’t-we-leave’ storm may have been premature. These statistics from Right Move are particularly significant because this is traditionally the time when the residential sector starts to gather pace – the fact that this is the first fall in the house price index at this time of year in nearly a decade is perhaps an indicator that Parliamentary process has transcended seasonal trends. That’s not just about Brexit, either. The last few weeks in the House of Commons have also raised the likelihood of a General Election and a possible change of Government, bringing further uncertainty over interest rates and economic policy in the long-term. In terms of how that affects people who are looking to move this autumn, clearly, a falling market has a different impact depending on whether you’re buying or selling. So, what are the opportunities and options for you if you’re committed to moving right now? On the surface of it, the maths is relatively simple: If you’re buying, then depending on the location (some London boroughs have continued to see average price increases over the past month) you’re likely to get more house for your money now than you were five weeks ago. If you’re selling, then the real impact on you will depend on whether you’re in a hurry or not. And, of course, the reality is that for the majority of housing transactions, most buyers are also sellers – and vice versa. Sellers There’s no real getting away from the fact that if you live in a part of London where prices are falling – according to Right Move, this accounts for 60% of the city – and you absolutely, definitely have to move now, you’re going to have to price your property well in order to sell it quickly. If you’re not in a chain or can afford to test the market, then you’ll have a bit more wiggle room. But all is not completely gloomy for sellers in London. The report also identifies that the amount of time a property is on the market before it sells has come down to a little over two months, suggesting that properties priced correctly will still move. And don’t be blind to longer term trends. For example, here in Fulham, according to the Right Move report, average house prices fell by 1.1% during August - but over the year since September 2018, they rose by 1.8%. What that means is even taking into account the monthly drop, on average your property will still be worth more now than it was when you bought it if you’ve been in it for a year or more. Buyers There’s no doubt now is a good time to be a buyer in London if you’re committed to a move and looking to get more bang for your buck. The considerations for sellers – competitive pricing and a buyer’s market – mean there are definitely good deals to be had out there. Inevitably, the biggest opportunities are at the higher end of the market, where the falling market translates into bigger ‘savings’ on the price you pay. And if you are in the position of wanting to trade up to something much bigger and you live in one of the boroughs where Right Move suggests your property might well have increased in value over the last month, then it’s also certainly worth looking at a move into a borough that hasn’t fared quite so well. That could mean you get top dollar for your own property – and the opportunity to pick up more house for your money. But regardless of where you are in the process, it’s always worth remembering that when it comes to buying a house, the decisions people make are personal. What is priced wrongly for one potential buyer might be the perfect asking price to another. And there’s one simply truth in property that it’s always useful to remember: regardless of size, location and layout and regardless of the price an estate agent recommends you market at – a house is only ever worth what someone is prepared to pay for it.     Want to find out about your mortgage options? Take a look at our short guide to remortgaging.  To find out more about our friendly and professional mortgage service, fees and what we can do to help make sure you’re not paying over the odds for your mortgage, why not visit www.oportfolio.co.uk or give us a call on 020 7371 5063. Oportfolio Limited is an appointed representative of Primis Mortgage Network, a trading name of First Complete Limited which is authorised and regulated by the Financial Conduct Authority Your property may be repossessed if you do not keep up repayments on your mortgage. Oportfolio Ltd fees are payable on application. We charge a broker fee for property purchases of £495 and a remortgage/further advance fee of £395. Our product transfer fee is £295.

by  -  29 September 2019

Bank of Mum and Dad

As parents, we always want to use our experience, knowledge and resources to help our children to succeed in life – and that doesn’t change whether they’re 5 or 25. A lot of the time, it’s easy to provide help that makes a difference, whether it’s in teaching life lessons, helping with a tricky bit of maths homework or simply providing support with practical tasks they don’t yet have the skills or knowledge to take on themselves. But when it comes to providing them with security as they move into adulthood, it can become more difficult. One of the bigger challenges Millennials face is in buying their own home. According to the Government’s House Price Index for June – the most recent data available – the average price of a house in the UK has dropped steadily over the last three years, more so in London than elsewhere, as political and economic uncertainty had a stagnating effect on the market. That decline has been more pronounced in London than in the rest of the country, yet even buying in the cheapest London borough of Barking & Dagenham will set you back an average of £297,000. How much you might be able to borrow has become more complicated and it’s no longer as simple as how many times your salary any given lender will consider agreeing. But assuming they might get a 100% mortgage requiring no deposit (Halifax has become the latest lender to announce a return to 100% mortgages) and pass the affordability checks that are now part and parcel of the application process, the most your son or daughter can realistically expect to borrow is four times their annual salary. And that shows the scale of the problem, because even buying in the cheapest part of London, your child will need to be earning £75,000 a year to buy on their own – which explains why the average age of a first time buyer in the capital is now 31. Last week a survey by Legal & General revealed that if the Bank of Mum and Dad was a mortgage lender, it would be the 10th largest in England. On average, those parents who are offering their children financial help to get on the housing ladder are now lending around £24,000. That’s the equivalent of £6.1 billion annually. So, if you’re worried about the prospect of your children being able to put a roof over their heads without spending a fortune on rent and having no asset to show for it, what are the options for giving them a helping hand. The obvious option, if you’re in the position to do so, is to offer financial assistance. But it is also possible to offer non-financial support if that suits your circumstances better. Before looking briefly at each option, it’s important to remember that any help you give your child – even if it doesn’t involve lending them money – could have serious financial consequences for you and you should speak to an independent financial adviser to be clear on the risks.   Options that involve giving your child a cash lump sum There are a few ways of doing this: Gift money: Helping your child by gifting them a decent deposit may well increase their chances of accessing an affordable mortgage. In general, the higher the deposit, the better the rate and the lower the monthly repayments. The average deposit in the UK is 15% of the house price, but it can be as low as 5% - and obviously it can also be higher. Any financial gift may have an Inheritance Tax implication. Lend your child money: Lending money and either charging your child a monthly repayment or agreeing what sum you’ll be repaid when the house is sold is another way of offering financial support. If a loan is to be repaid on sale of the property, it may be worth considering having a deed of trust drawn up by a solicitor to formalise the arrangement. Although your child should not have to pay income tax on this money, you should check with your financial adviser. Bear in mind, too, that there could be an impact on any means-tested benefit you child may claim in the future. You might also consider a secured loan or equity release from your own property – but these come with certain risks and you should get professional advice before going down either of those routes. Options that don't involve giving a cash lump sum If you don’t have the wherewithal to offer help through a cash lump sum, or you wish to offer them support in a  different way, there are a few options you can consider: Be a guarantor: This means your income will be taken into account on the mortgage application, potentially allowing your child to borrow more. As the name implies, being a guarantor would mean you having to take on the repayments for your child if they became unable to meet that commitment themselves. Buy jointly: Again, and depending on the arrangement you reach with your son or daughter, you will either be liable for paying half the mortgage or meeting any repayments if they can’t afford to. The potential benefits of buying jointly are that your child will be able to borrow more and you would also own a share of the property. Your child could also look at an offset mortgage, which would allow you to make repayments or pay off a lump sum when it suits you – but gives you the flexibility of withdrawing that support in the future. You might also consider a mutually exclusive mortgage deal. Under this scheme, which is not available from all lenders, you would place savings into an account linked to your child’s mortgage. You would still earn interest on those savings, but they would also guarantee the mortgage debt – meaning your child could access the benefits of a competitive rate or repayment amount without the need for a deposit. As with all big financial decisions, you should consider your options carefully and seek advice. If you’re looking to help your child get on the housing ladder, come and talk to us as well and see how we can help you to make the right choice to suit you and your child.     Want to find out about your mortgage options? Take a look at our short guide to remortgaging.    To find out more about our friendly and professional mortgage service, fees and what we can do to help make sure you’re not paying over the odds for your mortgage, why not visit www.oportfolio.co.uk or give us a call on 020 7371 5063. Oportfolio Limited is an appointed representative of Primis Mortgage Network, a trading name of First Complete Limited which is authorised and regulated by the Financial Conduct Authority Your property may be repossessed if you do not keep up repayments on your mortgage. Oportfolio Ltd fees are payable on application. We charge a broker fee for property purchases of £495 and a remortgage/further advance fee of £395. Our product transfer fee is £295.    

by Oliver Whitehead  -  19 September 2019

Personal finance advice

The world we live in is increasingly on-demand and technology has made it possible for us as consumers to easily get what we need from multiple sources. Personal finance advice and products are no different. But is that the best way to make important financial decisions about your future? When it comes to entertainment, the world is no longer linear. The very idea of having to plan a night’s television viewing, for example, is preposterous. TV shows, film and music is now just a download away, allowing us to build our viewing and listening experiences into the demands of modern life. Our online environment has made ownership of our personal finance environment similarly accessible. At the stroke of a key or click of a mouse, we can compare hundreds if not thousands of different personal finance products, from loans and credit cards to mortgages and insurance. And while that’s obviously very convenient, does it actually serve our best interests? If we visit a mortgage comparison website, we can see the interest rate and the repayment amount – but do we understand what that means in the context of our own lives? Some of us are savvy enough to be able to look at a range of mortgage products and take a step back to consider how our lives might change as the years pass, making decisions about our borrowing accordingly. Some people will be able to look at economic trends or industry patterns and make calculated decisions about their long-term employment prospects, and that will help them to make key decisions about the level of income protection they might need. Many people will know there’s a difference between standard buildings and contents insurance and the property insurance they might need if they rent out their property. Similarly, there are lots of people who can look at their family medical history and draw pragmatic conclusions about their own long-term health and the advantages of having health insurance in place. But does everyone possess this ability? Is everyone able to take a long pace back and look at their financial options in the context of their own lives? More importantly, do you have the knowledge and objectivity to do that – and to get it right? Part of the problem with living in an on-demand world is that price becomes the key to everything. Type ‘health insurance’ into Google and at the top of the results page that comes back will be a load of adverts from price comparison sites. And that’s the problem – price comparison sites are not benefit comparison sites. They don’t know you and they can’t tailor the product to you. All they can do is present you with a list of products, starting with the cheapest. And that isn’t the same as presenting you with the best, even if price is likely to be a factor in your decision. The same is true of any similar search around mortgages, property insurance, or income replacement cover. The online market is geared to giving you choices that are defined by cost first and benefit second. That carries an obvious risk: that in choosing the cheapest product available, you’ll be buying a product that doesn’t actually offer you the cover or benefit you expected it would. And if that happens, the chances are you’ll find out when it’s too late. There are all sorts of products that are directly available online or promoted as part of a price comparison service that could be said to be relatively low risk: car insurance, pet insurance and appliance cover are three that spring easily to mind. That’s not to say choosing the wrong cover in those cases isn’t costly. On the contrary, in fact – an error can be painfully expensive. But borrowing hundreds of thousands of pounds to buy a property, insuring its value or being able to pay your bills and keep your home in the event of being unable to work is a step up from those kinds of annual policies where relatively small – or at least well-defined – sums of money might be involved. That’s why asking advice from a professional adviser is always a good idea. A professional mortgage or insurance provider will be able to offer you advice ‘in the round’ – in other words, advice that’s informed by your complete financial circumstances. He or she will recommend policies or options that will give you the peace of mind and certainty you need, without jeopardising your financial security or your ability to meet your financial obligations. Taking decisions in isolation by yourself is a right and privilege that comes with digital empowerment. It has many positive things to commend it. But it can also be a dangerous environment that can have a serious impact on your future security. No reputable adviser will charge you for an initial chat, so you have nothing to lose by calling a professional individual or business you trust and fin ding out how they can help. If you’d like to talk about your own circumstances and needs, we’re listening.   Want to find out about your mortgage options? Take a look at our short guide to remortgaging.  To find out more about our friendly and professional mortgage service, fees and what we can do to help make sure you’re not paying over the odds for your mortgage, why not visit www.oportfolio.co.uk or give us a call on 020 7371 5063. Oportfolio Limited is an appointed representative of Primis Mortgage Network, a trading name of First Complete Limited which is authorised and regulated by the Financial Conduct Authority Your property may be repossessed if you do not keep up repayments on your mortgage. Oportfolio Ltd fees are payable on application. We charge a broker fee for property purchases of £495 and a remortgage/further advance fee of £395. Our product transfer fee is £295.

by Oliver Whitehead  -  31 August 2019
Disclaimer

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

Oportfolio Ltd fees are payable on application. We charge a broker fee for property purchases of £495 and a remortgage / further advance of £395.
Our Product Transfer fee is £295.

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You voluntarily choose to provide personal details to us via this website. Personal information will be treated as confidential by us and held in accordance with the appropriate data protection requirements. You agree that such personal information may be used to provide you with details of services and products in writing, by email or by telephone.

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