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Category: 2017 News



Here To help

Monday, November 20, 2017 12:37:00 PM

More than 2.6 million* mortgage borrowers have never experienced an environment where the Bank Rate has risen!

The increase in the Bank of England's Bank Rate from 0.25% to 0.5% is the first such rise since July 2007.  Back then, the rate hit 5.75%, although, for much of the following decade the Bank Rate did sit at 0.5%. 

(Source: Bank of England, November 2017)

So it's not panic stations, and the Bank of England regularly says that any rise would be measured and increase slowly over time.  However, it does signal intent and will be a concern for some, such as the 4 million or so* on a variable rate with their lender, who may see a rise in their monthly payments.

The current climate

In recent months we've already seen some lenders upping their mortgage rates, partly in anticipation of the Rate rise, and partly  because of an increase in SWAP rates (the interest charged between banks for lending to each other).

That said, the whole market hasn't changed overnight, and if you consider your existing deal, should you be on a fixed  rate, for example - and took it out a few years back - then you may be pleasantly surprised to see what's on offer.

The importance of Advice

In short, the Bank Rate rise is simply yet another consideration amongst the ongoing issues of Brexit, rising inflation, value of the pound, house price moves and the overall economic conditions for the UK.

Of course, you may be perfectly happy with your current situation and the deal that you're on.  Additionally, you may have one or more protection policies in place to ensure that you (and your family) are in a good position should the unexpected occur.

However, for others the Bank Rate rise may be a wake-up call, which prompts the need to have a conversation, such as:

1. You're approaching the end of your mortgage deal period, and want to chat through the options, and perhaps snap up one of the current deals on offer.

2. You might simply want to change your existing arrangement, possibly to raise further funds, or feel that it may be financially beneficial (even when factoring in any applicable early repayment charges).

3. A house move may be on the cards, and you might require a larger mortgage.

4. You may be one of the 3-4 million** sitting on your lender's Standard Variable Rate, and could want to act, or perhaps feel (possibly wrongly) that you may not meet the current affordability criteria.

5. You're a first-time buyer who has saved up a deposit, and is keen to jump onto the property ladder, and perhaps take advantage of the schemes on offer.

6. Or you're a landlord - or prospective one - in which case it would be wise to talk to us, as so much is occurring in this sector.

As you can see there are plenty of areas where we may be able to help you - and that's before we even cover the importance that protection products may play for you, your partner, and your family.

You may have to pay an early repayment charge to your existing lender if you remortgage.

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

(Sources: * UK Finance, Nov. '17; **, March '17)

Gloucestershire Business Awards

Monday, August 21, 2017 5:47:00 PM

Exciting news, we have been selected as one of the finalists for the Gloucestershire Business Awards in the category of 'Marketing Campaign of the Year' to be held at Cheltenham Racecourse on the 5th October.

Good Luck to all the finalists for the big night.

Help to Buy Bristol, Bath and North Somerset Roadshow

Monday, August 21, 2017 3:51:00 PM

The Mortgage Brain will be exhibiting at the Help to Buy Bristol, Bath and North Somerset Roadshow on Saturday 21st October. Come and say hello and explore your home ownership options.

If you are looking to purchase a new home with the aid of the "Help to Buy' schemes in Bristol or the surrounding areas, this is a great event for you to attend.

Our team will be on hand to tell you about the different home buying options that are available and how Help to Buy works.

The roadshow is not just for first-time buyers, it's also for people thinking about moving up the property ladder, or downsizing to a smaller place.

Entry is free. Avoid the queues by registering for your free tickets today.

Online registration is open at:

Event Information:

Date: 21st October 2017
Time: 10am to 3pm
Cost: Free Admission

Venue: We The Curious Science Centre, (formerly At Bristol),

Anchor Road,Harbourside, Bristol, BS1 5DB

We look forward to meeting you there!

Macmillan Coffee Morning

Wednesday, August 16, 2017 9:13:00 AM

The Mortgage Brain are holding a Macmillan Coffee Morning on Friday 29th September at our offices between 10.00a.m. - 12.00p.m.

Please come along to help support a wonderful cause and enjoy a slice of cake and a cuppa.

Help to Buy Northamptonshire Roadshow

Wednesday, June 14, 2017 11:28:00 AM

The Mortgage Brain will be exhibiting at the Help to Buy Northamptonshire Roadshow on Saturday 24th June. Come and say hello and explore your home ownership options.

If you are looking to purchase a new home with the aid of the "Help To Buy' schemes in Northamptonshire or the surrounding areas, this is a great event for you to attend.

Our team will be on hand to tell you about the different home buying options that are available and how Help to Buy works.

The roadshow is not just for first-time buyers, it's also for people thinking about moving up the property ladder, or downsizing to a smaller place.

Entry is free. Avoid the queues by registering for your free tickets today. Online registration is open at:

Event Information:

Date: 24th June 2017
Time: 10am to 4pm
Cost: Free Admission
Venue: Northampton Saints Rugby Ground
Weedon Road, Northampton, NN5 5BG

We look forward to meeting you there!

We Are On The Move

Wednesday, May 17, 2017 12:52:00 PM

The Mortgage Brain are pleased to announce that we will be moving to new larger premises as of Monday 22nd May

Park House

We would like to take this opportunity to thank all our customers for their continued support

It is business as usual

£100,000 better off with The Mortgage Brain

Monday, April 10, 2017 2:51:00 PM

Our Insurance Department is headed up by Katy Edginton, who recently went the 'Extra Mile' for one of our clients.

We arranged a critical assurance policy for a client  through a well known leading insurance company.

Unfortunatley, our client recently suffered a critical illness and needed to make a claim of approximately £100,000, however this was declined by the insurance company on a technicality, which as you can imagine left the client distraught.

Katy reviewed the situation and decided to pursue the matter further on behalf of the client by escalating the matter to the insurance companies complaints department. We worked with the client by instructing them to employ a solicitor to take up the case and the insurance company eventually paid our client the £100,000.

Here is Katy pictured with the flowers sent from our grateful client to say thank you to her for her efforts to ensure she got the right outcome. Well done Katy for a great job well done!

With this story in mind, its a great reminder that looking online for the cheapest insurance policy price isn't as important as making sure you have the right policy with the right provider.

Here at the Mortgage Brain our insurance team work hard to deliver the right policy for you at competitive prices, and you are safe in the knowledge that should you need our support with a claim, we are only a phone call away!

Build Your Own Home - Self Build Mortgages

Wednesday, March 29, 2017 9:23:00 AM

If you have ever considered getting a mortgage to building your own home this article might be of interest to you.

On the 1 April 2016, a new piece of government legislation came into effect which makes it easier for those interested in building their own home to find suitable land. The Self build and Custom Housebuilding Act, dubbed the 'right to build' by media, means that local councils are now obligated to offer suitable, serviced plots to those who are interested in acquiring land on which to build their own home. Councils are also required to keep a register of these individuals and groups of people.

Anyone wanting to undertake a custom build project can register their interest with their local council or via the Local Self Build Register website. The council will then offer them a number of suitable council owned plots and can also put them in touch with local landowners who have land to sell, via the register.

In the past, self-builders faced barriers including finding and access to suitable land and development funding, and challenges in navigating regulations in the development process, such as acquiring the necessary planning permissions.

The Act, championed by the National Custom and Self Build Association (NaCSBA), removes these obstacles through obligating councils to offer plots of land. There is also the promise of fast track planning processes and planning permission 'in principle' for some sites, which will greatly reduce timelines and the hoops that self-builders have previously had to jump through.

What can I do to get a self-build mortgage?

For those looking to build their own home, there are a number of self-build mortgages on the market. Depending on the lender, there will be different terms and conditions, so it is important to do your research to find out what sort of self-build mortgage is best for you. We would recommend you talk to a mortgage broker who will be able to offer you the right advice and approach the right lenders ensuring you get a better mortgage.

Things to consider include:

  • The stages at which funds are released
  • Whether funds released in advance or arrears of each stage
  • If the lender allows borrowing on the value of the land as well as the build
  • Will the lender release finds for the purchase of land

Here at The Mortgage Brain we have experience of self-build mortgages and have relationships with a number of lenders who specialise in this type of finance.

If you are considering building your own home and need a mortgage please give us a call on 0333 340 8888 or email and ask to make an appointment with one of our team.

Keeping your credit score in order

Monday, March 27, 2017 3:12:00 PM

The Council of Mortgage Lenders have stated that 1st time buyers are returning to the market, and it is a trend that is expected to continue. With 'Help To Buy’ schemes, other Government incentives available and low interest rates there has never been a more attractive time to buy, and to remortgage too.

An interesting survey recently carried out by MyCreditMonitor has revealed that 54% of Brits have never checked their credit score, even though there are a number of easily accessible websites offering this service. Having a good credit score is a necessity should you be looking to take out a new mortgage or are considering remortgaging your existing property. Here at The Mortgage Brain we would recommend everyone should check their credit score before putting in an offer on a property if they hope to get a mortgage, especially as close to 1 million people obtained a CCJ in 2016.

The report stated “Certain life-changing events will necessitate the need for self-investigation prior to a purchase and a poor credit score can dramatically impact the chances of securing the finance required.

Of those who did check their credit scores (46%), around a quarter (24%) had done so because they were considering purchasing a car, and a third (33%) undertook a credit check before taking on a mortgage.”

Regularly monitoring your credit report allows you to react quickly to any issues that might arise having a negative impact on your credit score. It also allows you to quickly deal with any errors detailed on your credit report.

In a world where suppliers, and most notably mobile phone providers, are quick at registering missed payments, defaults and CCJs, it is vital you keep your finger on the pulse and work hard to retain a decent credit score, and continue working to improve it.

Having a decent credit score really does make the difference!

Here are some websites that allow you to monitor your credit score:

1) MyCreditMonitor -

2) Noddle -

3) Experian -

4) Equifax -

If you are considering taking a mortgage out but are concerned about your credit score give The Mortgage Brain a call. We will be happy to discuss your situation with you and see if we can offer suitable advice to help you achieve your aim. Please call us on 0333 340 8888 or email

Looking for that dream home

Wednesday, March 22, 2017 12:56:00 PM

Viewing new houses can be exciting but is also one of the most important steps you will take in life. No matter how big or small, new or old the house its going to be your new home.

When viewing properties, it is important you don't get carried away, and it can be helpful to take a family member or friend to get a 2nd opinion that is emotion free.

Where should you look for properties?

Online: Zoopla, RightMove and your local estate agent's website.
In the property pages of your local newspaper
Show homes for new property developments being built. You can sometimes get a better deal buying off plan.
Property auctions
By being vigilant and driving around the areas you like looking for sale boards.

Planning is Essential...

Before you start looking create a wish list of what you definitely want, and what you would ideally like. Once you have the list prioritise it and make notes of what each property you visit does and doesn't have off the list. The list might include:

  • Kitchen with room for dining area too
  • Upstairs and downstairs WCs
  • Large garden
  • 2 living paces
  • Close to local shops or a local pub
  • In a catchment area for a certain school
  • Off road parking or a garage

This way you can weigh up on paper the pro's and cons for each property.

The property:

Check out how the property looks from the outside including:

  • there a garage or off-road parking?
  • If you spend time in the garden a south-facing house is better for you.
  • there a garden and has it been well maintained?
  • Can you see any wall cracks, damp or mould on the exterior of the property?
  • Are the fascia boards and guttering all in good condition?
  • Are the neighbouring houses and gardens well kept?

And check out the property on the inside:

  • What heating system is in place and what is the energy rating for the property?
  • How much will the local Council Tax be?
  • Is there enough storage for what you need?
  • Can you see any cracks, mould or damp?

What to look out for in the area?

  • Is it peaceful, clean and quiet or is it a busy built up area?
  • How long will the commute to work take - even try it to see?
  • Is there public transport available should you need or use it?
  • Are the schools and nurseries close and are they good?
  • Is the on-road parking good or is it busy?
  • Check out the local crime figures for the area.

Once you have found the property of your dreams you are ready to make an offer.

It is a great idea to have a mortgage in principle to ensure there are no delays getting the mortgage that may affect the property sale. For that we can help here at The Mortgage Brain in Gloucestershire.

To contact us for mortgage advice, call 0333 340 8888 or email

We would welcome the opportunity to help you buy your dream home.

Are you single and buying a house, what help is available to you?

Wednesday, March 22, 2017 1:40:00 PM

Buying a house is a big decision for a couple, so when you are buying one alone it is obviously more daunting having to make the decisions alone. However, don't despair, take a little time to research and you might find some schemes and options that might help you out.

Help to Buy ISA
Saving money into a Help to Buy: ISA can help top up your savings pot if you are looking to buy your first home. This is where the government will boost your savings by 25%. This means that for every £200 you save, you will receive a government bonus of £50, up to a maximum of £3000

Shared Ownership
Shared ownership schemes are aimed mainly at first time buyers, who don't earn enough to buy a home outright, where you partially buy and partially rent. With shared ownership, you buy between a quarter and three-quarters of a property and at a later date you can choose to buy a bigger percentage or even all of the property if you can afford to. The criteria to qualify for shared ownership is:

  • Your household earns £80,000 a year or less, outside of London.
  • You are a first-time buyer and used to own your home, but can't afford to buy one now or you're an existing shared owner looking to move.

Most of the homes available are newly built, but some are properties being re-sold by housing associations. All shared ownership homes in England are offered on a leasehold only basis.

Help to Buy - equity loan scheme
With a Help to Buy: Equity Loan, the government lends you up to 20% of the cost of your newly built home, so you'll only need a 5% cash deposit and a 75% mortgage to make up the rest. You won't be charged loan fees on the 20% loan for the first five years of owning your home.

To reflect the current property prices in London, from February 2016 the Government is increasing the upper limit for the equity loan it gives new home-buyers within Greater London from 20% to 40%.

The Help-to-Buy Equity Loan scheme - which is only available on new-build homes - will remain on offer until 2020, in England alone.

Bank of Mum and Dad
For many aspiring homeowners buying with help from Mum and Dad, family and friends is the only way with them being given a large enough deposit to help them onto the property ladder.

With a guarantor mortgage, a close relative acts as a guarantor on the loan. This does mean that if you are unable to make your repayments, your guarantor will be chased for the cash.

Guarantor mortgage can be useful for first-time buyers as the guarantor's income is taken into account when establishing how much the borrower can afford to borrow. As a result, you may be able to borrow more than if you were simply applying on your own.

If you are interested in any of the above schemes and would like further information, please contacts us here at The Mortgage Brain in Gloucester on 0333 340 8888 or

Life Insurance .... the real story!

Tuesday, February 21, 2017 11:52:00 AM

The stories surrounding Life Insurance can be off putting, meaning more and more families go unprotected each year putting themselves them at risk should anything happen to the main income generator.

We have looked at some of the reasons people dont get life insurance and hopefully helped make it a little clearer for you.

One - "Life Insurance is Expensive"
No. Life insurance can be cheaper than your Sky TV costs ... and surely is more important. We all love to watch the football or Coronation Street, but neither of these will take care of your family should the worst happen.

Love a few trips to your favourite coffee shop in the week for a cuppa and cake? 3 or 4 trips a month could cost about the same as your Life Insurance policy, but instead of a tall skinny Americano your family could get a £250,000 cash pay-out.

Tip: If you don't have a great amount of spare cash but still want protection, why not tell the insurance specialists here at The Mortgage Brain what you can afford each month and they will find a policy to best suit your budget.

Two - "My work give me a Life Insurance Policy, I Don't Need More Cover"
Not true! The policy provided by your employer will normally only cover you whilst you work for that company. The cover amount would often be a fixed amount and won't take into account personal finances such as mortgages, other debts or your lifestyle.  If you leave the company, or are made redundant the policy will quite often end.
The biggest catch of them all.. Some polices provided by employers will only cover you whist you're at work. That means if you get hit by a car on your lunch break you won't get a pay out!

Three - "I'm a stay at home Parent, I don't need cover, it's not worth it"
Your job is as important and the person who goes out to work every day.  The cost of someone to take on all of the 'stay at home parent' tasks is more than £31,000 a year*, if the worst were to happen and your family were left not only to grieve for you but to cook, clean, do the washing, clean the crayon off the walls, upkeep the garden, make the pack lunches, prepare the birthday parties, buy the Christmas presents' the list is endless then I'm sure they would need some help which will cost money.

The main breadwinner will eventually return to work but all of these things are what make life normal and a little more stress free. For a small monthly payment, you can cover yourself against this eventuality.

Four - "I'm not in great Shape & have been ill  - I Won't Get Insured"
Not true! We have Insurers on our panel that don't even ask any health & lifestyle questions, so no matter what your previous or pre-existing medical conditions we can look to offer you cover.

Don't get me wrong, your policy might be a little more expensive, but the peace of mind knowing that your family aren't going to be left with a huge funeral bill will be a greater comfort to you.

Five - "I've seen TV adverts! I will get a better price online"
Ah Ha! We've seen those adverts too! The problem with using an online system is that, you don't always actually know what you're getting for your money and quite often it doesn't do what it says on the tin.

You wouldn't want to think you were buying fully comp and only ending up with third party because you saved yourself £5 a month by doing it online. Here at The Mortgage Brain we can help you make the right informed decisions, allowing you to know exactly what you are covered for, and at a competitive price too.

Online prices are normally ALL pre-medical prices so as soon as you tell the computer that you have a condition the price could double; but unless you are speaking to a specialist on the phone you can't go into detail about medication, test results, doctors' advice. You may find that speaking to someone on the phone in fact SAVES you money because you can explain your circumstances rather than being classed as high risk.

We hope this has helped you in some way.

If you need any insurance help or advice, please talk to us here at The Mortgage Brain. You can call us on 0333 340 8888 or email

Three ways to cope with losing buy-to-let tax relief'

Tuesday, February 21, 2017 11:40:00 AM

If you have bought buy-to-let properties as an investment, you are likely to be feeling like someone has got it in for you! Initially the budget slashed tax relief, and following this there was the added blow if an increase in stamp duty costs, all of this hitting your profits!

These changes have definitely hit our buy-to-let customers who are now having to work a little smarter to ensure they maximise their investment returns.

In previous years' people with buy-to-let mortgages have been able to claim tax relief on their mortgage payments at a marginal rate of tax, of between 20 and 45% depending on whether you were a basic or higher rate tax payer. The new changes mean that tax relief will be a flat rate of 20%, so those on higher incomes will be losing more in mortgage interest payments.

The answer to this isn't to hike up rents to compensate as most tenants are already paying as much or more than they can afford. The advice we would recommend our clients to consider is:

1. Consider a shorter-term fixed rate deal to get lower rates of interest, but be aware these mortgages carry more risk.

2. Consider placing your property portfolio in a limited company structure. This would then allow you to pay corporation tax rather than income tax (corporation tax is lower). The drawback to this is mortgages might be harder to find as fewer lenders will loan to a limited company.

3.  Transfer the houses into your spouse's name if they pay a lower rate of tax. Be aware though that this doesn't lift them into a higher tax bracket.

As with most situations there are also benefits for buyers with these changes taking place. Landlords with lower incomes are now at less of a disadvantage to those larger landlords when looking to invest. Homebuyers might also find houses a little more affordable and more properties available as competition from buy-to-let investors decreases a little.

If you are a buy-to-let landlord looking for advice on this matter, please feel free to contact us to arrange a meeting to discuss your situation and see how we can help you maximise your return on investment.

To contact us please call us on 0333 340 8888 or email

'Mortgage made simple' across the UK.

'Are 30 year mortgages to become the norm?'

Monday, February 13, 2017 6:06:00 PM
Here at the Mortgage Brain in Gloucestershire we are seeing more and more of our clients opt for a 30-year mortgage, and a recent report from the Halifax indicates that the 25-year mortgage might be on its way out, revealing that 28% of first-timers chose 30- or 35-year mortgage terms in 2016, up from 11% in 2006

There are many factors that include high house prices, student debts and a rise in the age at which couples have children, meaning people are tending to buy a home later in life than in previous years and so are opting for a longer repayment term. The Halifax report shows that the average age of a first-time buyer is now 30, although this does change from region to region. The average figure for London is 32, but in certain boroughs and areas, such as Barnet and Ealing and Slough in Berkshire, it is 34.

Stretching the term of the loan reduces monthly payments, which makes the mortgage more affordable and with mortgages available up to 40 years long there are suitable options for most people who have a decent regular income. The disadvantage however is very simple... if you take a longer mortgage you will pay more interest, meaning the property will cost you more money.

This trend of taking longer mortgages now means that many people are continuing to pay mortgages once they have retired, something that was unusual up until recent times.

In its report, the Halifax said that as the cost of a typical first home has risen, there has been a growing trend towards mortgage terms longer than the traditional 25 years.

In 2006, almost two-thirds (64%) of first-time buyers opted for a term of between five and 25 years, while the remaining 36% were over 25 years. Ten years on, the picture is dramatically different: 60% of first-time buyer mortgages involve a term of at least 25 years.

In 2016, the average price paid by someone who had never owned a property before was £205,170 - the highest on record. At the height of the housing downturn in 2009, the figure stood at £135,254.

In London, first-time buyers have seen the average price rise by 81% since 2009 to reach £402,692 - again, the highest on record.

If you are looking for advice on your mortgage and want to discuss what you can and cannot afford, to find the most suitable mortgage please contact us here at The Mortgage Brain in Gloucestershire. We are available on 0333 340 8888, or visit

8 out of 10 Remortgage applications lead to an offer

Monday, January 30, 2017 8:58:00 AM
80% of remortgage applications resulted in an offer in the third quarter of 2016, up from 77% in the previous three months, according to the Intermediary Mortgage Lenders Association.

83% of those remortgages offered were converted into completed deals. As a result, 67% of all remortgage applications completed – the highest percentage seen in any quarter this year.

Executive director of the IMLA, Peter Williams said: “The low interest rates available to borrowers almost certainly contributed to this increase, with borrowers able to switch on to very attractive deals.

“Rates are unlikely to fall much further, but the sustained 0.25% Base Rate means they are also unlikely to rise – which should encourage further remortgage activity.”

Buy-to-let mortgage applications had a 55% completion rate, while 52% of all specialist mortgage enquiries ended up completed, according to the research.

Williams added: “2016 has been a tumultuous year for the market, with the changes to Stamp Duty and the Brexit vote both affecting activity. However, the market has proved itself much more robust than many predicted it would be, and the industry is in a good place to continue this momentum into 2017.”

This is great news for property owners looking for better mortgage deals, or who are looking to release equity in the property.

If you are looking to remortgage your property, then please talk to us here at The Mortgage Brain in Gloucester, we look forward to hearing from you.

Time for Advice?

Thursday, January 19, 2017 10:21:00 AM

The last year or so has delivered some fairly seismic changes to the normal order of things.

In the midst of all this, however, there continues to be some excellent mortgage deals on offer, should you be looking to:

  • get onto the property ladder
  • move to a new home
  • raise some extra funds to undertake renovations to your existing property
  • secure a btter inteerest rate on your mortgage deal
  • expand or get into the buy-to-let arena

Current climate
But let's not kid ourselves that decisions are being taken in a normal market environment.  Not when we've seen Brexit occurring, a Trump Presidency, elections coming up in France and Germany, and a more emboldened Russia.  Additionally, the Pound has fluctuated, UK inflation is on an upward cycle and growth in the economy is slowing.

This has, and will continue to have an impact on the financial markets and may also  affect the property sector, where annual UK house price growth (albeit with regional variations) ended up at 4.5% for 2016, the same as 2015 - with around 2% projected for 2017. (Source: Nationwide House Price Index, Dec. 2016)

The way forward
While none of us really knows how it will all pan out, we - as professional financial advisers - operate daily within the mortgage and protection marketplace; so are well placed to have an excellent insight into what may be the best way forward to help meet your own particular needs.

It makes sense, of course, to suggest a degree of caution - and that is why professional advice is important.  However, it's also worth noting that much has been done by the government and the Bank of England (BoE) in recent times to help ensure the country is in a better position to sustain any future shocks to the economy.  

BoE initiatives such as the drop in the Bank Rate, £435bn of Quantitive Easing, and the Term Funding Scheme, may help to keep down the costs for those that have, or are seeking to take advantage of the current deals for mortgage loans.

At the same time, we'll understandably be keeping a close eye on how the Brexit process will develop and any impact it may have on your borrowing options.

Support for YOU
Of course, we are aware that you may have time-pressed lives, so we can hold your hand throughout the whole process, and liaise with the various parties along the way.

In addition to your borrowing needs, we can also discuss specific insurance products, that may help protect you (and your family).  So please do get in touch.

And reassuringly, in a 2016 report, 81.7% of mortgages now go through intermediaries (such as us), a sizeable jump against 56.3% back in 2014 - a pleasing endorsement. (Source: IRESS, Mortgage Efficiency Survey, October 2016)

You may have to pay an early repayment charge to your existing lender if you remortgage.

Plenty may want to Remortgage

Thursday, January 19, 2017 1:37:00 PM

Residential Mortgage Borrowing by type of deal  

(Source: Council of Mortgage Lenders, August 2016)

  • 3.5m on a Fixed Rate
  • 1.5m on a Tracker Deal
  • 2.2m on an SVR
  • 2.1m largely on an SVR

If borrowing by Landlords slows, then the lenders will be keen to look to other sectors to help make up the shortfall.

This will be even more pronounced when you then consider that gross mortgage lending in 2016 is expected to sit at £246bn (almost 12% up on 2015), and rise slightly to £248bn in 2017.

In order to hit that level of lending, the remortgage market would be an obvious target.  And it is one that has already shown growth over the last year or so - where it's 22% up by value year on year.
(Sources: Council of Mortgage Lenders, Market Forecast December 2016; remortgaging statistics Q3 2016 v. 2015)

Remortgaging is where you opt for a more suitable deal than the one you're currently on.  In short, you remain where you are, but simply try to find a mortgage that'll cost you less each month, or perhaps one that will generate additional funds to enable you to undertake key home improvements.

The good news is that there are still decent (and in some cases, improved) deals out there.  (Source: Mortgage Brain, October 2016)

On Fixed or Tracker deals
Of the 9.3m residential mortgage deals in play (see chart above, which excludes buy-to-let), about 5m are currently sitting on either Fixed or Tracker rates.

In some of these instances, the best option may simply be to remain as is, but it would be sensible to have the conversation to make sure you do have the right deal to meet your current needs.  Particularly, if you have decided that now's the time to undertake some of the more major renovations to your home that you've put off for the last couple of years - and require some extra funding to help make it happen.  In which case, remortgaging could be one of the options to consider.

On a Standard Variable Rate
Another sizeable figure is that 2.2m are definitely known to be on their lender's Standard Variable Rate (SVR).  This figure could even rise to over 4m, if you add in the majority of the 2.1m loans taken out more than 12 years ago, as most are assumed to be on an SVR too.

If thats the case, then a staggering 45%, or thereabouts, of all residential mortgage borrowers are sitting on an SVR, where the average rate is around 4.9%*, meaning they could possibly be saving £000's if they remortgaged onto one of the current deals.  (Source: *, November 2016)

Benefit of Professional Advice
Of course, in some cases the borrower may feel that they won't qualify for a remortgage deal.  This could be due to a change in circumstances, concern about the tighter affordability criteria, currently sitting on an interest-only deal, or needing an arrangement that may run into their retirement years.

But, let's not forget that many of those on SVRs, for example, may also be long-term borrowers who have benefited from the growth in house prices, meaning they're an appealing audience for lenders, and possibly qualify for the better loan-to-value deals.

Additionally, every lender doesn't work to the same criteria, and that's why it's in your interest to have a conversation with us, as you might be pleasantly surprised.

You'd also benefit from the fact that we already help a whole range of clients, from those who are new to home ownership, have a home and may want to move up (or down) the property ladder, seek buy-to-let deals, or (as we're discussing here) simply want to stay put and identify a better deal and/or require further funds.

As part of that process we would run through the 'tighter' rules, which now apply to ensure that borrowers are stress-tested to see if they can not only meet current payments, but are also be able to cope should the interest rate rise.  

You may have to pay an early repayment charge to your existing lender if you remortgage. Your home may be repossessed if you do not keep up repayments on your mortgage.

Mortgage Calculator - could it work for you?

Here's how to use the mortgage payments calculator:  A £100,000 mortgage over 25 years, charged at a 2% interest rate would cost 100 x £4.24 (for Repayment) = £424 per month.

Monthly payments for a mortgage per £1,000 borrowed over 25 years.

* Excludes any payments to a separate savings scheme, to help pay off the capital amount borrowed.

This calculator only provides a guide to monthly payments and does not guarantee eligibility for a mortgage.  The actual amounts that you may have to pay may be more or less than the figures shown

Please contact us for a personalised illustration.

Could you Manage

Thursday, January 19, 2017 12:14:00 PM

Would you (or your family) cope financially if faced with an untimely death, serious health issues, a major injury, or other massive shocks to the existing lifestyle?

We go off and insure our cars, homes, mobiles, and pets but do we think enough about protecting a key asset(s) - a wage earner - and what would happen if this income stream dried up, or was reduced markedly?

Of course, many of us may feel, "it'll never happen to us", or that 'the state, (or employer) will step in', but the latter options may offer limited support, and often only for a short period.  As for the former - the protection industry is awash with sobering research on the numbers that have faced serious illness, injury, or an early death.

Yet, even at the basic level of protection needs, half of the people in the UK with a mortgage have no life cover in place!  This means that they are leaving themselves and their families financially exposed should the worst happen.  The same research also shows that more than two-fifths of mortgage holders couldn't live on the, possibly, resulting 'single wage', and would have to then turn to dipping into their savings to survive - savings that many feel would only last for a few months.  (Source: Scottish Widows, June 2016)

Start somewhere

So, it makes sense to ensure that life cover is in place to help pay off the mortgage should the unthinkable happen (plus a bit more to help cover immediate living costs).  There are numerous options to consider, but the most basic is Term Assurance, where you choose the amount you want to be insured for and the period for which you require cover.  If you die within the term, the policy pays out. 

Should you not die in this period, then the policy won't pay out and the premiums you've paid are not returned to you.

There are two main types to consider - level and decreasing-term insurance.  As the names suggest, with level-term the amount of cover remains the same, but with a decreasing-term policy, the level of cover decreases over the policy period - possibly to cover a debt that reduces over time, such as a repayment mortgage.  Premiums are usually noticeably cheaper for the latter, albeit you may decide that maintaining the constant lump sum level of the former may be a better option for you.

Even if you don't have a mortgage, you'll probably still have major financial responsibilities (rent payments?), so it would also be wise to consider having life and other protection cover in place.

Make sure you take advice

Whilst there are more complex protection products to consider which meet other needs - such as facing a serious illness, or being unable to work for a long period due to illness or injury - it makes sense to take advice for life cover too.  For example, once you start the process, you need to consider a number of options, like 'single or joint cover?', or 'inflation linked?'.  So, it makes sense to get in touch and then we can thoroughly discuss your needs.

It makes you think...

Leaving loved ones behind to pick up the pieces. 

  • On average, around 120 adults, aged 18-55, die every day. (Source: Office for National Statistics, 2014 UK figures, December 2015)

Will the income stream be hit, whilst the wage earner recovers? 

  • In the 1960s more than 7 out of 10 heart attacks in the UK were fatal.  Today at least 7 out of 10 people survive. (Source: British Heart Foundation, December 2016)
  • Every two minutes someone in the UK is diagnosed with cancer. (Source: Cancer Research UK, 2014 research)
  • One in 10 will face a period of sickness absence off work of more than six months.  (Source: Demos survey, April 2013)

As with all insurance policies, terms, conditions and exclusions will apply.

Other Funding paths to consider

Thursday, January 19, 2017 11:26:00 AM

Did you know that there are other borrowing options out there which may be more appropriate for certain circumstances, such as Secured Loans, and Bridging Loans.

Some people may have had enough of treading water for the last few years and could now want to undertake some of the bigger tasks around the home.  However, this might not require sizeable funds to make remortgaging a worthwhile (or desirable) option.

This is where a secured loan might help.  It is designed for homeowners who can use part of the equity in their property to obtain a loan that may sit as a second charge on top of their mortgage (which would probably be with a different lender).

Secured loans may be an option for the following situations:

  • A large number of mortgage borrowers are deemed mortgage prisoners', who may find it difficult to remortgage (particularly if they want to increase the amount borrowed).
  • Some mortgage borrowers may be sitting on an interest-only product, where remortgaging could require them to revert to a standard repayment loan (which may cost them more each month, even if they secure a better interest rate deal, as part of the capital needs to be paid off too).
  • Other mortgage borrowers may simply not want to jeopardise the current deal they're sitting on.
  • Or some may want to consolidate their debts.  Although, taking out a longer term loan such as this may mean that the borrower ends up paying more in interest payments, than if they paid off any credit or storecard amounts over a shorter term.

As the interest rate on a secured loan is generally higher than an average mortgage one, talk to us and we can help assess if it's a suitable option for you.

These are designed to be a short-term measure that can help you through an initial period, until alternative financing can be put in place.  

Individuals (and businesses) often turn to bridging when they require short-term funds swiftly, and the industry can be highly responsive to those needs.  These funds could enable borrowers to secure a property (at auction perhaps), or make enhancements to their current property, while waiting for a loan from their mortgage lender or other source to come through.

Bridging loans will not suit everyone and can be a more expensive form of borrowing, and specialist finance such as this is certainly NOT the right product for those who are in any form of financial distress.  On the contrary, it's designed for people who have some element of wealth through property assets and who wish to use a bridging loan to quickly and easily extract liquidity from those assets.

The benefit is that it could, for example, open up the possibility of snapping up a property at a time that suits you - without losing out because the sale of your existing home may be part of a lengthy chain.  You'd obviously need to do the maths, to establish if the cost of a bridging loan is outweighed by the time, flexibility and possible financial benefits it may deliver.

The Financial Conduct Authority does not regulate some Bridging Loans.


Navigating choppy waters

Thursday, January 19, 2017 11:24:00 AM

With all the developments within the Buy-to-Let marketplace, it's vital that you take advice.

Despite the many challenges, Buy-to-Let remains a sizeable part of the mortgage lending marketplace, and the rental sector is likely to continue to be fuelled by demand (such as, not enough homes being built and the issues renters face in pulling together the deposit required to get onto the property buying ladder).

The upshot of this is that landlords are seeing decent rental returns, and are benefiting from some of the excellent buy-to-let mortgage deals out there. (Source: Mortgage Brain, November 2016)

However, they will need to adapt and evolve as market and economic conditions change, and it's vital that landlords take professional advice. From us, as well as other professions, such as their accountant - particularly if they want to assess if opting for a Limited Company status may now be a better route going forward for their portfolio.

The key impacts
The government sees this sector as a decent revenue source, and the Bank of England feels that it needs to be controlled so that it's not so sizeable that it could have an adverse effect on the overall property sector. The latest initiative, in this respect, relates to the stricter affordability stress test rules, and this needs to be considered alongside other developments that have occurred in recent times, such as:

  • Tax changes - Higher tax burdens for buy-to-let landlords are being phased in from April 2017 - with the full impact being felt by 2020. Currently, landlords are able to offset their mortgage interest and other finance costs against the property income, thereby reducing their tax liability. Those on higher tax rates are able to receive relief at their marginal rates of 40% or 45%.

By 2020 the government's plan is to restrict relief to the basic rate of income tax (20%) for all individual landlords. Some basic rate taxpayers may also be hit, as the change might push them into the higher rate tax bracket.

  • Stamp Duty changes - purchases of buy-to-let properties (and second homes) now attract an additional 3% stamp duty above the current banded levels.

What it means
Of course, Brexit, and other economic impacts may ultimately influence current and planned regulatory controls. But, in the meantime, it's vital that both existing and potential landlords do their homework. For example, think about remortgaging onto a better deal, or look for the best possible deal if just starting up.

Stricter RULES for Buy-to-LET
From 1 January 2017, new stress tests and affordability checks will need to be in place, with the remainder of the new rules to be implemented by 30 September 2017.

What this means is that unless the initial mortgage rate is fixed for at least five years, lenders must take account of possible interest increases over a five-year period using a minimum stress test interest rate of 5.5% for new loans.

Alongside this, the Prudential Regulation Authority (PRA) has also stipulated a minimum interest coverage ratio of 125% - albeit it seems many lenders are already applying 145%.

Another rule is that from September 2017, Portfolio landlords (those that have four or more mortgaged properties, as defined by the PRA) must have a specialist underwriting approach applied, as lending to this group is viewed as being inherently more complex.

There is no guarantee that it will be possible to arrange continuous letting of the property, nor that the rental income will be sufficient to meet the costs of the mortgage.

The value of your Buy-to-Let property and income from it can go down as well as up. You may also require advice on the legal and tax issues.

The Financial Conduct Authority does not regulate legal and taxation advice, and most Buy-to-Let mortgages.

HM Revenue & Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

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


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