February 2023

Newsletter

The importance of mortgage advice

At a time when mortgages are in the spotlight, or because of the difficulties around being able to afford a mortgage as a first-time buyer, where do you go? The normal and first instinct might be to turn to your bank or building society – as they will have their own products. However, it could be a good option to look at a wider range of options, depending on what it is you’re looking to do. As we have access to a wide range of lenders, we can take a look at the options available to you and provide a tailored service to match your individual needs.

Even before you find a house, a discussion with us could help you decide how much you could afford, how to much to save for a deposit and when you do find a property, provide a recommendation for a product that is suitable for your individual needs.

Once the mortgage application has been accepted, we’ll follow up with the lender to ensure that everything is going according to plan and keep you informed of progress at each stage of the exciting journey. We’ll also deal with your legal representative to make sure that all the legal aspects of the property transaction, aiming to ensure they are delivered on time and with minimum hassle.

We’ll also be able to help you with keeping your home yours, should the worst happen. We can talk through your circumstances to help you find the most suitable range of protection cover that fits your needs now, and for the future ahead.

In a nutshell, seeking advice on a mortgage can help, saving you time, effort and giving peace of mind that you’re getting the bespoke advice for your own situation, as well as protecting you and your family for all life can throw your way.

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

All the information in this article is correct as of the publish date 23rd February 2023. The opinions expressed in this publication are those of the authors. The information provided in this article, including text, graphics and images does not, and is not intended to, substitute advice; instead, all information, content and materials available in this article are for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information.

Rate Update – Are mortgage rates coming down?

With the Bank of England Base Rate still going up, it looks odd to see mortgage rates coming down when logic dictates that they should be following the Base Rate. Yet as the Bank of England raised interest rates by 0.5% to 4% on the 2nd of February, a lender had just announced a five-year fixed rate mortgage at 3.95% for five years1.

Please note that where Rates are referred to in this article, they may be subject to further criteria or an assessment of your finances before applying and may not be available after this article is published.

One of the main reasons behind the Base Rate increases has been the Bank of England seeking to counter inflation.. The Bank of England hopes that higher rates will slow economic activity, which in turn will reduce prices and lower the rate of inflation2. For those of us with mortgages on variable or tracker rates, it means that the monthly cost of our mortgages will go up, while those on fixed rates are shielded from any immediate change in monthly repayments. However, when their fixed rate periods end, it is likely that refinancing to an equivalent fixed rate will be difficult to emulate, depending on when the mortgage was taken out and refinancing could cost more.

Market analysts forecast that mortgage rates and borrowing costs will start to soften and fall during the year, even though Bank Rates may peak at 4.5% later this year. Some even forecast that Rates will stay above 3.25% for the next three years, despite inflation starting to dip3, yet this can be hard to predict.

Part of the reason for the reduction in mortgage rates seen already is that lenders have already factored in Bank Rate rises to their calculations, and that some lenders are keen to encourage buyers back to the housing market, or assist those looking for the certainty of a fixed rate mortgage at a time of volatility. Competition is high and we are likely to see further lenders looking to compete by lowering their fixed rates.

According to figures from the Office of National Statistics, 57% of mortgages coming up for renewal in 2023 were originally at rates of below 2%, which means that many householders should prepare for the difference when looking to remortgage now. The Office of National Statistics believes that the average rise in mortgage repayments will be around £250 more per month, whilst a £300,000 mortgage may see the repayments rise by as much as £661 per month4.

Though the figures can look intimidating, this is a trend that we have seen recently in the market, and so should not come as too much of a shock. If you wish to discuss your mortgage circumstances – contact us today to see how we can help.

If you are struggling to keep up on your mortgage payments, please contact your lender in the first instance or use the services of free, not-for-profit advice services such as MoneyHelper or StepChange.

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

Sources

  1. IFA Magazine (2023) Virgin Launches a 5-year fixed rate at 3.95% – reaction. Available at: https://ifamagazine.com/article/virgin-launches-5-year-fixed-rate-at-3-95-reaction/ [Accessed 21Feb 2023].
  2. Bank of England (2023) Why have interest rates in the UK gone up?. Available at: https://www.bankofengland.co.uk/explainers/why-are-interest-rates-in-the-uk-going-up [Accessed 21 Feb 2023].
  3. iNews (2023) When will mortgage rates go down? How recent interest rates affect lenders and when mortgages could change. Available at: https://inews.co.uk/inews-lifestyle/money/property-and-mortgages/when-mortgage-rates-go-down-interest-lenders-mortgages-change-2130939 [Accessed 21 Feb 2023]
  4. Office of National Statistics (2023) How increases in housing costs impact households. Available at: https://www.ons.gov.uk/peoplepopulationandcommunity/housing/articles/howincreasesinhousingcostsimpacthouseholds/2023-01-09 [Accessed 21 Feb 2023].

All the information in this article is correct as of the publish date 23rd February 2023. The opinions expressed in this publication are those of the authors. The information provided in this article, including text, graphics and images does not, and is not intended to, substitute advice; instead, all information, content and materials available in this article are for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information.

When is the right time to remortgage?

Are you happy with your current mortgage? If so, then that’s excellent news. However, if it’s been a long time since your mortgage was last reviewed, or the end term is coming up soon, then a remortgage may not be far away.

Your circumstances may also have changed in the years since your current mortgage was arranged, so it’s always worthwhile seeking advice to check whether the mortgage you hold is right for your current situation.

Things to consider;

  • If you have a fixed rate deal and it is coming to an end, you will likely end up on your lender’s standard variable rate (SVR) once the fixed period has ended.
  • If you have a variable rate deal* you may be worried about rising monthly costs. If you are concerned, you may find a fixed rate deal will give you peace of mind with fixed monthly costs. However, it might be worth weighing up the pros and cons of costs of remortgaging, and note that fixing into a rate means you may not be able to benefit in reductions in the future.
  • If your share of the property’s value has grown* because the price of your property has gone up, lenders may be able to offer you better terms. A lower loan-to-value (LTV) could help you to access a lower rate by remortgaging, but it’s worth considering your options as a whole.
  • If you want to borrow more money*, remortgaging by using the equity in your property can sometimes be a popular way to raise finances, however there may be cheaper ways to borrow.
  • If you want more flexible features* – Your existing mortgage deal might have strict terms regarding overpayment and will prohibit you from paying more than the contracted monthly amount. If you’d like to repay more quickly, a remortgage could allow you to switch to a deal that allows a certain amount that you can overpay without incurring fees. Other features, you might want to look for include having the ability to apply for ‘payment holidays’ when cashflow is tight.

*IMPORTANT – If you are currently in a deal that is not due to end and decide you wish to remortgage to another lender, there may be high early repayment charges to leave.

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

Speak to us to discuss your options further, we can help talk you through your circumstances and can offer our experience and knowledge of the market and products available.

All the information in this article is correct as of the publish date 23rd February 2023. The opinions expressed in this publication are those of the authors. The information provided in this article, including text, graphics and images does not, and is not intended to, substitute advice; instead, all information, content and materials available in this article are for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information.

Take charge of your property sale

If you are thinking of selling your home, there is an important list of ‘to-do’s that should be followed to ensure that you get the right price and the transaction completes at a time that suits you.

 Choosing the right estate agent

Of course, personal recommendations are extremely helpful but a good agent should be proactive on your behalf, know the area in which you live intimately and have a list of likely buyers to introduce and be able to present your property in the best light. Remember, going with the one who promises the highest price does not guarantee a sale at the level you are looking for.

Don’t rely on your estate agent

Having said how important it is to find the right estate agent, don’t sit back and expect them to do all the heavy lifting.

Check out other properties’ asking prices

Look at what other houses in your area are selling for. View online the most recently sold properties in your postcode to give you a good idea of an asking price.

Make your property clutter free

If you have a lot of furniture it can make the rooms look smaller than they are. Pack away (where possible) extraneous furniture and other fixtures that make the property look cluttered. For example, work surfaces in the kitchen should be clear to make the space look bigger and more attractive to potential buyers.

Clean up and make minor repairs

Make a point of cleaning the house. If you have time, cleaning the carpets can have a dramatic effect on the atmosphere and look of the property. Having a good clean up, helps make your home more sellable. Also, places, where paint has flaked off through constant use, could use a paint refresh. Check and see whether there are any other small repairs that need doing or scuff marks that need a touchup. Making an effort will make your home look better and the offers you get will reflect the care you have taken.

Giving a good first impression

What do people see as they come to the front door? Don’t forget the garden and the front of the house. Look at the outside of your house as if you were looking at it for the first time. Are there any bushes or trees that need trimming? Are the windows clean, has the grass been cut? As you go through the front door, does the scene before you make you feel that if you were a buyer, you would want to buy your home?

Up to date with paperwork

Do make sure that all your relevant paperwork is up to date such as gas safety certificates or sign offs for building work you might have undertaken. Having everything up to date will mean a faster resolution.

Conveyancer

Make sure that your legal representative is keeping up with the conveyancing of your property. They might not need chasing up, but there is no harm in making sure that they know you are on the ball and expecting a fast resolution.

If you want everything to go smoothly with your sale, it pays to be proactive.

All the information in this article is correct as of the publish date 23rd February 2023. The opinions expressed in this publication are those of the authors. The information provided in this article, including text, graphics and images does not, and is not intended to, substitute advice; instead, all information, content and materials available in this article are for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information.

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