Buying a house involves making lots of choices, and some can be simpler to make than others. Finding the right house in the right location can be the easy part, choosing the best and most suitable mortgage deal for your financial circumstances can prove to be more of a headache.
There are hundreds of different mortgage deals available in the market, so how do you know which one represents the best deal? The market is very competitive and if you aren’t familiar with the way it works it can be hard to understand what is on offer.
It’s hardly surprising then that so many people are choosing to work with a mortgage adviser to ensure they get the mortgage that’s best suited to their needs. Taking out a mortgage and buying a property is a big responsibility, and it can be a stressful time. So, it helps to work with someone who shares your commitment in making it all go as smoothly as possible.
HOW TO GET THE BEST DEAL
Like properties, mortgages come in all shapes and sizes. There are many different types to choose from (fixed, variable, tracker, and that’s just for starters). You’ll also find that lenders offer mortgages with different interest rates that can be fixed for various time periods. There are also special deals on offer that include extras such as survey fees, legal costs or cashback arrangements.
Looking just at the interest rate that’s being charged can be misleading. Although a low rate can look enticing, you also need to check out what the fees and charges are as these could be high, meaning you’ll end up paying more which could make the deal less cost-efficient.
GETTING GOOD ADVICE PAYS
Working with us will save you time, money and stress. We will be able to compare the deals available from various lenders, taking into consideration things like fees and charges that will affect the overall cost of your mortgage. We will ensure that your mortgage application goes to the most appropriate lender. What’s more, we are on hand from start to finish and can provide help with many aspects of the house-buying process, like getting your offer accepted, finding solicitors and organising property surveys. You’ll also be able to get good advice about putting protection policies in place. These are designed to provide financial safeguards that mean your mortgage would be paid if you experienced one of life’s unexpected events.
So, if you’re a first-time buyer, second-stepper, re-mortgager or would-be buy-to-let landlord looking for professional mortgage advice, why not put us to the test?
As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments.
A Will isn’t the only piece of forward planning you should consider as you get older. Against the backdrop of an ageing population, the government has been campaigning to raise the profile of Lasting Powers of Attorney (LPAs). Processes and application forms have been simplified to encourage widespread take-up. This has worked, as an increasing number of people are now deciding to consign their money, legal and healthcare affairs to family and friends.
An LPA enables you to choose the person or people who you trust to be in charge of making decisions which affect you if you are no longer able to do this for yourself. Taking legal advice over the appointment of an attorney can ensure that there are safeguards in place against financial abuse.
LPAs make things easier for family and relatives if you lose capacity, helping ensure that decisions that affect you would be made in your best interests, and that your affairs, both your finances and your health, are managed in the way you would have wanted.
If you’re looking to set up an LPA for someone living in Scotland, parts of the agreement and document differ to the one for England and Wales.
Retirement is often seen as the end of one chapter and the beginning of the next. Planning for it isn’t just about getting your money organised, although that’s obviously very important.
Depending on your circumstances, you may want to take the opportunity to completely change your lifestyle, move home, start a new business, travel the world, learn a new skill or simply put your feet up. And like all big projects in life, the more time you can invest in thinking it through, the better the outcome will be.
MANAGING YOUR MONEY
Getting financial planning advice before accessing your pension pot can go a long way to help alleviate financial worries later on in life. With longevity increasing, more people than ever will spend longer in retirement than previous generations.
The changes in legislation have given those about to retire far greater freedom when it comes to using their pension pot, but freedom brings with it greater individual responsibility. Low interest rates and periods of market volatility can make income planning for the future a difficult task without professional advice.
It is generally agreed that spending in retirement tends to follow a u-shaped curve. People often spend more money in the early, more active years of their retirement, with spending decreasing in the middle years and increasing again later in life when additional care and medical expenses are more likely to be required.
BUDGETING FOR YOUR LIFESTYLE
It makes sense to begin drawing up a budget for your retirement that covers your likely income needs. There are various factors to consider. You may have income from employment, equally you could choose to give up work altogether and tick off the items on your bucket list. You may decide to downsize from a family home to a smaller retirement apartment that is cheaper to run and means you can extract some equity to bolster your income.
You may want to help children or grandchildren financially by paying for school fees or helping them with a deposit for a home of their own. You will also have to plan for a time when you might need to pay for help around the house, and for the likelihood of needing medical and nursing care in your later years. Taking professional advice can help by creating a roadmap for your financial future.
If you’re a homeowner, it makes sense to have plans in place that protect you, your family and your home. Insurance policies are designed to provide financial safeguards and valuable peace of mind.
LIFE INSURANCE TAILORED TO YOUR NEEDS
Life policies provide a tax-free cash lump sum for those you leave behind in the event of your death. If you have a mortgage, it’s a big financial responsibility and no one would want to leave their family with money worries at a sad and difficult time.
There are other types of plan that protect growing families, such as critical illness cover, which means that if you are diagnosed with a serious illness as defined in your policy, there’s a cash payout to help alleviate financial worries. Income protection policies provide an income should you suffer an accident or illness and be unable to work. Accident, sickness and unemployment policies provide a monthly payout that would help pay your mortgage and other living costs in the event of an accident, sickness or involuntary unemployment.
PROTECTION FOR YOUR VALUABLE POSSESSIONS
Buildings insurance covers you for damage to the structure of your home. When you take out a mortgage, your lender will require that you have buildings insurance in place, and that it covers the cost of rebuilding the property and its permanent fixtures and fittings. The rebuilding cost isn’t the same as your property’s market value, it’s generally a lower figure which will be detailed in your lender’s valuation report or arrived at by using an online calculator.
Unlike buildings insurance, mortgage lenders don’t insist that you have cover for your home contents; however, it makes sense to protect them against risks like burglary, fire and flood. You can also arrange insurance for valuable items like jewellery, and those belongings you use away from home, such as laptops.
If you could use some help in ensuring you have the right protection policies for your needs, do get in touch.
Rising house prices, burdensome student debt and a low-wage economy have all contributed to millennials feeling under financial pressure.
However, the good news is that many more people in the 18 to 35 age range are regularly saving into a pension than ever before. According to data from the Intergenerational Commission1, a decent pension ranks as the second biggest area of concern for young people’s prospects, second only to housing.
PENSION SAVING IS BECOMING THE NORM
Auto-enrolment has been a great success in improving the proportion of pension savers, particularly among the younger age group, where participation levels have increased significantly. However, it is crucial that those being auto-enrolled into pension schemes for the first time do not consider it ‘job done’ and disengage from their savings.
April saw the minimum auto-enrolment contribution increased to 3% of qualifying earnings for employees and 2% for employers, and although staff can opt out of their workplace pension scheme, figures to date show that fewer than expected have chosen to do so. Whether more will opt out as the minimum contribution increases to 5% for employees and 3% for employers in April 2019 remains to be seen. It’s to be hoped that having embraced the pension saving habit and got used to receiving regular statements showing how their money is growing, they will be sufficiently incentivised to stay the course.
MORE IS NEEDED TO SECURE A COMFORTABLE RETIREMENT
The problem remains that to retire with pensions that are comparable to those of their parent’s generation, millennials will need to think about contributing far more than auto-enrolment. This could prove difficult if they simply don’t have the spare cash available to top up their pension savings.
Employers will have an important role to play in ensuring that employees receive every encouragement to keep saving during their working lives; they could help by allowing workers to sacrifice part of their salary or bonus to make pension contributions.
1Intergenerational Commission, 2017
Income drawdown is where you leave your pension pot invested and take an income directly from it, instead of using the money in your pot to buy an annuity from an insurance company. As the rest of your pension pot remains invested, it will continue to benefit from any investment growth.
Since pension reforms were introduced in April 2015, more and more retirees have opted to take flexible withdrawals from their pension funds, and the Financial Conduct Authority has reported that drawdown has become much more popular, with twice as many pots moving into drawdown than into annuities.
UNDERSTANDING THE RISKS
Whilst drawdown offers great flexibility, there are risks that you need to be aware of. Unlike an annuity, the amount you could draw as income isn’t guaranteed. Your pension fund remains invested which means that you are exposed to share price movements as markets rise and fall. This makes it even more important to take good independent professional advice. Without it you could find your income level falls and you might even risk running out of money at some point.
In drawdown, there are risks involved both in taking out too little and too much. If you draw too little you might not have sufficient to cover your living expenses, taking out too much could have tax implications and also restrict your remaining pension pot’s ability to provide an income throughout your retirement. This is where your financial adviser can provide valuable input, helping you plan your drawdown strategy and ensuring that it’s kept under regular review.
Although it’s no longer obligatory to take an annuity at retirement, they still have benefits to offer. It is possible to put a portion of your pension pot into an annuity to provide a regular guaranteed amount for the rest of your life. Some people choose to do this to ensure they cover their core living costs.