It’s been a few months since I last wrote about Brexit and its likely impact on interest rates, the mortgage sector and the residential property market. That was not long after the deadline for the UK to leave the EU was extended to the end of October. So, now that we’re roughly halfway between the last deadline and this one, what’s changed? On the one hand, nothing much has changed at all. There’s no more clarity now on how we’ll leave the bloc (or even, perhaps, if we’ll leave) than there was three months ago. But politically-speaking, on the other hand, everything has changed. We have a new Prime Minister working with an even more slender majority than his predecessor and leading a party that, if anything, is more divided than it has been at any point since the EU referendum. He chairs a cabinet that is loudly pro-Leave and, publicly at least, completely aligned to taking the UK out of Europe on October 31 come what may. Outside the inner sanctum of the cabinet, former senior ministers warn of chaos ahead if Britain is allowed to crash out of Europe without a deal, while the apparatchiks of central and local government ramp up their preparations for No Deal. Labour is said to be planning a vote of no confidence in a bid to force a General Election. The Liberal Democrats have a new leader in Jo Swinson, and her fiercely pro-Remain party is attracting membership applications from former Tory MPs, disillusioned with their brief stint as part of the Change UK party. All in all, things have certainly been better within Great Britain PLC. But what does the uncertainty mean if you’ve got a mortgage or you’re thinking of buying and/or selling your home? Naturally, it depends on what you read, who you listen to and whether you’re on the Winnie the Pooh or Eeyore side of the optimism/pessimism divide. But amid the more outlandish crystal ball-gazing, there have been some interesting and well-informed hypotheses doing the rounds recently. The general consensus seems to be that a No Deal Brexit would substantially increase the chances of an economic downturn. Some commentators have stopped short of predicting a full-on recession, but others haven’t been quite as shy. According to the Guardian’s personal finance and consumer correspondents, this may not be a bad thing for homeowners where interest rates are concerned. Their joint article talks of mortgage interest rates returning to their sub-1% levels of 2016 and even of the Bank of England imposing a zero rate to ease the transition to a new trade arrangement with the rest of the world. Such a move would undoubtedly be welcomed by homeowners who suddenly find their mortgage rates significantly reduced. But the other side of that coin, of course, is the resulting misery for savers and investors. As for house prices and whether now is the time to buy or sell, the same article suggests that trying to predict whether to move before or after October 31 is more likely to be a lottery. Having said that, the fact remains that if you consider your finances to be insulated from the immediate impact of Brexit – whether with or without a deal – then when you move is less of an issue. The only question at that point is whether you can sweeten the process by winning out on the price at which you agree to buy and securing the market value of the house you sell. The Daily Mail’s financial website This Is Money reports that there’s been a growth in the appetite for long-term mortgage deals, including the recently-trending 10 year fixed product some lenders are offering. As I said in our recent article on whether you should fix your mortgage rate, we’d advise caution when it comes to locking on to a long-term deal. They tend to be more expensive and if rates do come down – which is a distinct possibility over a period of a decade – then you’re going to lose out in the long run. There are circumstances where a long-term fixed product might be right for you – but I would strongly advise getting advice from a professional mortgage expert before you commit. And then there are the conflicting calls in the Express and Times for the Bank of England to either raise interest rates and demonstrate its commitment to – and confidence in – Brexit (Express), or cut rates ahead of Brexit to ease the impact on the economy (Times). So, even the papers are divided on the best approach to fiscal policy. The fact is, we won’t have true clarity until October 31 arrives. In the meantime, the world keeps turning and life goes on. My advice is always that you should take any long-term financial decision – such as buying a house – in the context of your long-term financial security, and ultimately that comes down to the answer to the question of whether your potential financial exposure is controllable. Any investment is a risk – but calculated risks, where you’ve looked at the worst-case scenarios and demonstrated you can survive them, are always going to be preferable to walking into a commitment blind. The best thing you can do if you’re thinking about moving in the next three months is get some advice from a professional broker and a financial adviser – and factor that advice into your decision. Need more information 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.
Nothing in life stays the same. The plans we make for today and tomorrow can change over time and new plans will need to be made. That’s certainly true when it comes to buying houses. There are all sorts of reasons for moving. It may be that you originally bought the biggest house you could afford and now find yourself in a better financial situation that allows you the scope to get your dream home, or put you on the next step towards it. You may have bought when you lived alone but have since found a long term relationship and, perhaps, a growing family and a need for more space. Maybe you’ve become empty-nesters or perhaps have unexpectedly found yourself on your own again and simply don’t need the space you once had. But when it comes to moving to somewhere new, there are some tactics that can serve you well, whatever your reasons for leaving where you currently are. Find a potential buyer first On the assumption you’re set on upping sticks come what may, it’s worth considering either completing the sale of your existing home before you buy, or at least finding a potential buyer for it. Why? Because it puts you on the front foot when it comes to negotiating a deal on your next property. Of course, selling up before you start house-hunting in earnest means being prepared to rent for a time, and there are downsides to that, too – not least of which is the ‘dead’ money you’ll spend on renting that might otherwise be earning you interest. But if you do the sums and are realistic about how long the whole process will take – and, consequently, how long you may need to rent for – you may find it’s an option that could work for you. There’s a good chance the person you end up buying your new home from is trying to move up the ladder themselves, meaning they’re going to be part of an upward chain – and house chains can be the cause of nervousness for vendors. If you’ve sold, you’ll automatically be of value as a buyer because there will be no downward chain – and that makes the person you want to buy from a valued buyer, too. One possible outcome from this is that the person selling your next home may well be prepared to accept a lower offer from you simply to strengthen their own chances of successfully completing their onward move. And if your circumstances mean you can’t sell up before you buy, having your house on the market and being able to prove genuine interest in your property still strengthens your buying hand. Get a mortgage agreed in principle! We hear lots of tales of estate agents who seem less interested in you if you haven’t sold your own property and don’t have a mortgage in place. They may be true, they may not be – but having a mortgage agreed before you ask an agent for a viewing of your dream home will certainly benefit you. Being able to show you have secured the necessary funding for your intended property gives the agent confidence in you as a buyer and means they are much more likely to recommend your offer to their client. A mortgage approval in principle is usually valid for around three months (some lenders offer longer terms). By working with a professional mortgage broker like Oportfolio you can reduce the stress that can be associated with the mortgage application process, because your broker should take on the job of completing the application for you – leaving you to simply check and sign the forms – and then managing the application through to a decision. Having a mortgage in principle doesn’t guarantee your offer on a new property will be accepted – in the end, it has to be the right offer for the seller – but it certainly makes you more attractive as a buyer. These two simple tactics together prove you’re serious about buying and that alone has significant value to the people selling a property and those who represent them. If you’re thinking of moving house this year, come and talk to us about getting a mortgage in place. You can also watch our short video on the ins and outs of moving to get some insight into the things you might want to consider as you take your next step up or down the ladder. 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.
You’d think it would be the easiest thing in the world. You’ve been highly successful in your life, invested wisely and, by anyone’s standards, you’re comfortably wealthy and able to buy just about anything you desire. Anything, that is, apart from a mortgage. Bizarre though that might undoubtedly seem, it’s a problem that faces many high net worth individuals (HNWIs) – and there’s a simple reason: because income taken by HNWIs is often not from conventional sources and wealth can be tied up in long term investments, lenders see them as high risk. Income is the single most important factor for mortgage lenders in determining whether to approve an application or not, and the processes that banks and building societies now need to follow in order to meet regulatory requirements don’t give much room for discretion. Indeed, the wealthier an individual is, the more complex their finances can be, making it even more difficult for lenders to unravel the information they need to see. With investments straddling multiple portfolios, perhaps not all of them made easily liquid, and income irregular or even, on the surface of things, non-existent, a mortgage application can be challenging at best for HNWIs. Interestingly, instances where HNWIs are refused an overdraft facility, credit card or mortgage are more common than many people perhaps think – and that’s largely because the criteria by which affordability is defined are often highly specific. The very nature of investment is risk-based and so it shouldn’t be too surprising to find lenders being cautious around those who appear to have sizeable exposure, even though the net value of their investment assets is high. And given the economic events of a decade ago, few of us are going to lament a lending process that seeks to prevent them happening again. But it does lead, inevitably, to frustration among HNWIs who find themselves at the mercy of an inflexible affordability assessment that doesn’t take account of a more holistic view of their financial circumstances. Ultimately, the lenders that are prepared to adapt their businesses to meet the needs of both the majority of ‘ordinary’ borrowers whilst at the same time servicing the particular needs of HNWIs are in a minority. That said, it doesn’t mean there aren’t lenders out there who have the expertise and knowledge to be able to service the needs of the very wealthy – which is why those people looking for a mortgage but who have unique finances should seek specialist advice from a broker or adviser who has access to the right network to help. Equally, with the right preparation and groundwork around demonstrating income, it’s still possible for those with what lenders might view as challenging or complex financial circumstances to access conventional mortgage products. Again, it comes down to getting the right advice from the start. At Oportfolio, we’re mortgage experts and when it comes to offering support and sound advice, we have a wealth of experience in advising people from all walks of life and backgrounds. If you have an unconventional financial set-up and think you might struggle to demonstrate affordability to a potential lender, why not come and have a chat with us? We can offer you the right advice to improve your chances of finding the right mortgage to suit your needs. Want to know how other clients felt about working with Oportfolio? Watch Gus and Selena’s video story! 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.
If you search on the web for advice on the things you should do when choosing a mortgage, you’ll get a lot of information back. Some of it’s good, some of it not so good. But as important, if not more so, is what you should avoid doing. Here’s our guide to the mistakes you’d do well to avoid making. Don’t approach your hunt for a mortgage in the same way you would if you were buying a washing machine We know that sounds obvious, but you’d be surprised at the almost laissez-faire way a good many people approach the business of securing the finance to buy their home. Put simply, buying a home is a huge investment – and almost certainly the largest single purchase you’ll have made in your life at that point. It’s fine to buy a washing machine from Amazon or another online retailer. If it doesn’t work, you send it back. If you realise there was a better model you could have bought, it’s not a calamitous financial mistake to have to live with. Choose the wrong mortgage provider or product, however, and you could be paying for it – literally – for years. Don’t obsess about the interest rate We’ve said this before, but it’s worth repeating. If the only thing you’re looking at is the interest rate, then the chances are you’re missing a trick. Yes, how much you’re going to pay each month is important and so that means the rate is a factor in your decision – but it’s not the only factor. Is the rate fixed or variable? If it’s fixed, how long is it fixed for? Are there early exit fees? Is there an arrangement fee? Will you be able to overpay if you want to, and if so, by how much? Just as importantly, is the mortgage provider reputable and do you believe you’ll get good support and care during the lifetime of the loan? The days of personal 121 contact with an account manager may be over, but your relationship with your lender remains just as important today as it always did. Don’t chase lower rates at the expense of lender reputation Even if you do put a lot of store by the interest rates on offer from lenders, they don’t always tell the whole story. If you saw what looked like two very similar cars on offer from two different dealers, and one was significantly cheaper than the other, you might be tempted to buy the cheaper of the two. But it’s always worth taking pause for thought. There could be legitimate reasons for two apparently identical mortgages being offered at different rates of interest. It could be that one lender is squeezing as much margin out of the loan as possible to maximise profit. Equally, it might be that they’re a bigger, more well-established and reputable lender, with bigger overheads and a better overall service. Don’t take a mortgage from an unregulated lender If you do nothing else (and we hope you’ll do a lot more than this), don’t take a mortgage with an unregulated lender, because when things go wrong, you have no easy recourse to get them put right. Unregulated lenders aren’t subject to the same lending standards as regulated banks and building societies and don’t offer the same protection. Do your homework and ensure your lender is reputable and regulated by the Financial Conduct Authority. If you’re in any doubt at all, hit the pause button and reconsider. Use a professional mortgage broker If you only follow this final – and, we’d obviously argue, most important - rule, you’ll also avoid making the first four mistakes, too. A good, professional mortgage broker will also be regulated – giving you protection against bad advice – and will know the market inside out. They’ll know what deals are available, what products will best suit your circumstances (not just today, but in the longer term, based on your priorities and ambitions) and the lenders who can offer you the best options for buying your home. At Oportfolio, we’re mortgage experts regulated by FCA and with years of success behind us – so if you’re ready to take the next step in your property journey, we’re ready to help you. Want to know how other clients felt about working with Oportfolio? Watch Gus and Selena’s video story! 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. 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.