News & Views

Mortgages

We’ve talked a lot in the past about mortgages and mortgage rates, but with interest rates at a competitive level and no sign yet of the market changing for the worse, now is a good time to find out if you’re missing out on a significant saving. There are all sorts of good reasons to remortgage, just as there are times when it’s not such a good idea to change the borrowing you’ve got on your house. If any of these statements apply to you, then you could be saving yourselves hundreds – if not thousands – of pounds a year by switching your loan to a new lender or a better rate. You’re coming to the end of your current mortgage deal You’ve already lapsed to your lender’s standard variable rate (SVR) Your house has increased significantly in value since you took out your current mortgage You want to overpay your mortgage, but your lender won’t allow it You want more flexibility in how you manage your mortgage You should also consider switching your mortgage if you want to borrow more money for whatever reason. If you’re currently on an interest-only mortgage and want to switch to a repayment mortgage, your lender should be happy to move you over to the arrangement without the need to remortgage (though expect the lender to be difficult about allowing you to switch the other way – from repayment to interest-only). You're coming to the end of your current deal or your fixed-rate or fixed-term mortgage has already run out We talked a lot about this in our last blog, so we won’t labour the point again here, save to say that allowing yourself to lapse onto your lender’s SVR is always likely to prove more expensive. Most banks and building societies will allow you to arrange a replacement deal three to six months before your current arrangement expires, but it’s a good idea to speak to a professional mortgage adviser who will be able to compare your current lender’s products against rival deals to ensure you’re getting the best possible deal. If you’ve already slipped onto your lender’s SVR, then you need to take action now. Again, speak to a professional mortgage adviser to understand what your options are – but at the end of the day, your lender should be able to let you switch to a fixed-rate or fixed-term deal without needing to make a formal application. That said, look out for any fees that might be applicable. Your house is worth significantly more  If your house is now worth significantly more than the outstanding debt on it, your loan to value (LTV) requirement will be significantly lower too – which may mean you qualify for lower rates with your existing lender or another lender. A professional mortgage adviser like Oportfolio will be able to look at the market and determine whether this is likely to apply to you and what might be involved should you wish to switch to a new product. You want to overpay your mortgage, but your lender won’t allow it Paying off your mortgage earlier than the term agreed can save a great deal of money, but the terms of your existing deal may make that difficult. If you’re lucky enough to be in the position to repay over and above your minimum mortgage payment, then this could a very effective way of saving money over the longer term. It’s a good idea to discuss this with an independent financial adviser who can assess the cost-benefit of overpaying in the context of the financially planning you or they are already doing on your behalf. But if you decide this is a route you want to explore, talk to a mortgage adviser to get a sense of the products that are worth considering. You want more flexibility in how you manage your mortgage From offset mortgages that reflect your current or savings accounts to mortgages that allow you to take a payment holiday or vary your monthly payments, having flexibility over how you repay your loan can be really important. If you want to know more about how to take control of your mortgage, talk to us to ensure you’re in the best possible position to make the right choices about how you pay for your property.   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  -  14 February 2020

Coronavirus Advice

The ongoing coronavirus crisis continues to put pressure on family income as the true impact of the Givernment's social distancing strategy is felt around the UK. There are a number of schemes that have been launched to help businesses, those in full-time employment and the self-employed financially. But the enforced isolation we're all experiencing has also been a time for many people to take stock of their personal finances. Despite the concerns that many people feel at this time, it's also an opportunity to think about the future and how we can safeguard ourselves in the future. Here’s our checklist for the things you can do now to give yourself complete peace of mind that you're protected in the future. Does your mortgage need updating? Many people are worried right now about how to pay their mortgage. If you share that concern, you're likely to qualify for the Government's mortgage relief scheme, which offers a 3-month 'holiday' from mortgage payments to ease the pressure on your finances. Even if you don't have any immediate concern about meeting your monthly payments, this is a good moment to review your existing deal. If you’re on a fixed rate or fixed term mortgage, do you know when your deal expires? Even though there’s a lot of publicity around reminding us all of the possible benefits that can be gained from switching your mortgage when you’re approaching the end of your existing agreement, it’s still surprising how many homeowners allow themselves to lapse to their lender’s standard variable rate (SVR). Paying your mortgage at the SVR is more expensive and although there are circumstances where it might not make sense to move to a different rate (for example, if you’re planning to move or remortgage and want the option to move to another lender without having to pay an exit fee on your current mortgage) it’s a good idea to look at your needs a few months before your existing deal runs out, as most lenders will allow you to start applying for a new rate between 3 and 6 months ahead. You should always talk to a professional mortgage broker as he or she will be able to give you the right advice about the action you need to take with your mortgage, whether that’s to stick with your current lender on a new deal or switch your mortgage elsewhere. Is your life cover fit for purpose? It’s easy to forget about things like life insurance when our circumstances change, but it’s important that you take a moment each year to review the provision. It may be that you took out your policy years ago, perhaps to cover the remaining term on your mortgage when you first took it out, but if you’ve had a change in your circumstances since then – maybe you’ve remortgaged and extended the term, for example – then it could be your current level of insurance won’t cover what it needs to cover should the worst happen. If you discover that your life insurance is no longer adequate, then speaking to a professional adviser like Oportfolio can help you to choose the right product. Is your income protected? Your life insurance will pay out when you die, ensuring the people you leave behind are looked after financially. But what happens if you can’t work – either permanently or for an extended but temporary period? These are situations that can be overlooked when planning for the future, but as we age our health inevitably becomes more vulnerable. There are two types of protection that can give you peace of mind when it comes to your income. One is critical illness cover, which will pay out a tax-free lump sum on diagnosis of a serious (often terminal) illness. This type of insurance, also known as cancer cover, since that is the condition most policies pay out against, ensures you have enough money to allow you and those close to you to live comfortably. The second type of financial protection you might consider is income protection. This is a useful policy replaces a significant proportion of your salary if you’re unable to work for a prolonged length of time, but will eventually be able to return to work in the future. Although the sum paid is usually around 75% of your gross salary, the fact it’s tax-free means it is likely to more or less equate to your take-home pay. At Oportfolio we have the experience and expertise to offer you professional advice about the suitability of these products for you. Property insurance These are the policies that are most likely to be on your radar because they renew each year and you’re reminded of that by the insurer. Again, it’s worth taking a moment to speak to an adviser to ensure you’re getting the right product and to explore the market to see what else might be available. At Oportfolio we use a trusted panel of mortgage and insurance providers in order to give you the best possible advice about securing your financial future. Why not get in touch and see how our friendly team of advisers can help you to have a successful 2020?     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 Oportfolio  -  6 February 2020

Buy to Let

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.

by Oliver Whitehead  -  19 August 2019

Mortgages

We often talk and write about the importance of making sure you start to plan early when it comes to managing your mortgage. Although the stricter regulatory environment that’s evolved since the economic crisis began in 2008 has resulted in much greater protection for borrowers and lenders alike, those who already have a home loan can still be tripped up by failing to plan for the end of a fixed deal. Typically, your lender may give you between 8- and 12-weeks’ warning of your fixed loan coming to an end. Fixed deals give homeowners certainty over their payments and, as a result, they can prove cheaper over the long run if a rise in interest rate would otherwise result in higher repayments. But while the post-2008 regulatory changes have brought changes in the way banks and building societies lend and the criteria they use to assess affordability, it’s still the responsibility of borrowers to look for a better deal at the end of their fixed term – your lender won’t do it for you. The danger for borrowers in delaying is that when your existing mortgage deal does come to an end, your lender will simply move you to their standard variable rate (SVR), which may well be more expensive than the one you’re currently on. The result of that is you’re going to pay more over the lifetime of your loan than you would do if you switched at the end of your existing deal. The reality, though, is that for many people the prospect of remortgaging to a new deal – either with your existing lender or a different one – can be a source of some anxiety. Most lenders now treat a remortgage as a new application, so the days of ringing up your lender and simply asking to be moved to their cheapest rate are long gone. As a result, people worry about all sorts of issues from whether they’ll meet the stricter affordability criteria to whether they’ll be able to find or provide the paperwork they need to complete their application. In fact, a 2018 survey suggests 41% of people find the application process to be stressful, so it can end up being one of those things people keep putting off until tomorrow. The truth is the application process can be quick provided you have all the information you need easily to hand, but leaving everything to the last minute is likely to simply increase your stress levels rather than reduce them. So, we always encourage our clients to take early action to ensure they transition smoothly from their existing mortgage product to a new one. And working with a professional mortgage broker can relieve most of the stress anyway, because your broker should be working with you to ensure you have the right documents and to pre-assess your financial circumstances to ensure you have the best possible chance of your application being approved. If you’re currently within six months of the end of your existing fixed deal, this is a good time to begin thinking about switching. Some lenders – Barclays, Nationwide and Santander among them – are trialling schemes that allow their existing customers to agree a new fixed deal up to 6 months before their current one ends. Clearly that’s more to do with lenders improving their customer retention rates than it is altruism on their part, and it’s not necessarily the case that the deals they offer will be right for you. As is the case with any financial commitment you make, it’s wise to consider carefully whether the deals available from your existing lender are right for your particular needs and circumstances. A good mortgage broker will be invaluable to you in making that decision. But if you decide those products are appropriate for you, then agreeing a deal now that will be come into effect in the New Year could make some sense. Given the likelihood of interest rate rises in the future, one of which could arrive before we see in 2020, even fixed mortgages could be more expensive in January than they are now. Having a clear plan to ensure you enjoy the benefit of the best possible mortgage deal is crucial if you want to futureproof your repayments and ensure you don’t end up paying far more than you need to. At Oportfolio, we’re mortgage experts and can help you to make decisions about your finances that not only suit your circumstances today, but also take into account your plans and aspirations for the future. Why not give us a call to talk to us about your current mortgage arrangements and find out how our experience, expertise and access to products you won’t find on the High Street or online can help you to make the most of your mortgage. And to learn about some of the things you’ll need to consider as you plan, 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.

by Oliver Whitehead  -  24 July 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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