THE HOME

Having and protecting a home is a financial priority for most of us. This ensures that we cannot be moved on by a landlord and gives us the freedom to decorate it or change it as we want. As the majority of us do not have the funds to buy a house outright, it means that getting (and paying!) a mortgage is an essential requirement. Currently the property market is pretty static – another result of the political uncertainty. On the plus side, however, this has meant that mortgage interest rates have remained at record low levels. This makes it a good time to take out, or change to, an interest rate fixed for a reasonable term. We consider the five year fixed rates to look pretty attractive. If you have a mortgage, it would be a good time to ring up your lender and find out what they can offer. You can then make other enquiries to other lenders (or using the services of an independent mortgage broker such as ourselves) and decide the best route for you to take.

MORTGAGE SOLUTIONS FOR OLDER GENERATIONS

There are many more options now for those who are 60 or older. Where the incomes are guaranteed, such as income from pensions or investment income, more lenders will now offer normal residential interest rates and terms. Where the incomes are not guaranteed or not at a high-enough level, there are the Lifetime Mortgage options. These are not based on income. They are calculated on age and property value only. The money raised can be for any purpose. You have the option of making payments or simply letting the interest be added to the original borrowing – to be paid from the eventual sale of the property. The interest rate is fixed for the life of the mortgage. Do contact us if you would like to know what options might be available to you.

FIXING YOUR MORTGAGE

If you have a mortgage, review it. If you are already on a fixed rate for a reasonable term,

you probably do not need to take further action. However, if you are on your lender’s Standard

Variable Rate, you face an increase in your monthly costs in the event of any mortgage rate increase.

The easy solution is to talk to your lender about changing your mortgage over to a fixed rate. This

can usually be done for little or no cost, and for most people will also mean they will immediately

pay less than they were paying. For example a switch to a fixed rate can mean your paying a rate

which is 2.0% or so lower than you are paying currently. This can result in significantly lower monthly payments. Check it out.

The Inertia Tax!

Those with residential mortgages that stay on their lenders’ Standard Variable Rate are effectively suffering a voluntary tax by not taking advantage of their lender’s special deals. Shifting over to the lender’s special deals, such as a fixed rate for two or three years, can save hundreds or even thousands of pounds over those couple of years. Simply contact your lender and ask them what is

available. This same principle applies for those who have buy-to-let mortgages on investment properties.

OTHER NEWS: MORTGAGE RATE WAR

There is still fierce competition as regards mortgage interest rates. While the Bank of England seems minded to move slower rather than faster in raising interest rates, we still believe it is an excellent time to take advantage of the current fixed interest rates – with 5 year fixed rates under 3.0%. We would be pleased to provide you with quotations so you can see what savings you can achieve. This can be done very speedily.

MORTGAGES – TIMES ARE CHANGING

The mortgage market is still struggling to adapt to the new MMR (Mortgage Market Review) requirements. There is a much more detailed focus on affordability which has, in our experience, made quite a dramatic difference for those who need to push the boundaries such as borrowing past age 65 or needing to stretch their income as far as possible. We have also seen that virtually any past or present credit difficulty makes it very difficult to obtain borrowing from High Street lenders. There are still possible lending solutions for all of these hurdles but be prepared for the process to take longer and be more difficult than before.

Having said all of that, it is a very good time to move to a fixed interest rate for 3 to 5 years in order to avoid the effects of the coming rate rises. With the average Standard Variable Rate averaging about 4.4%, and 5 year fixed rates available for 1% or more below that, a re-mortgage could allow you to both reduce your outgoings now and avoid the nasty upward movements in interest rates that will almost inevitably start in 2015. We would be happy to make enquiries to see what could be available for you.

Income Please

Income please


After you have taken your tax-free cash

Option 1 Take a guaranteed income for life (Annuity).

Option 2 Receive a higher guaranteed income for life due to an adverse medical condition or medical history or history of smoking (Enhanced Annuity).

Option 3 Take a fixed income for a period of time (usually 5 years) and have a guaranteed amount left at the end so you can then review your options (Temporary Annuity).

Option 4 Get an income which can possibly increase depending on the underlying investments (Investment Based Annuity).

Option 5 Leave your monies invested with the option to draw an income from the fund itself (Drawdown). There are two possibilities here.

The first is called Capped Drawdown. With this one the maximum you can take is based on your age and the value of the pension fund. The second is called Flexible Drawdown. This allows you to take out as much as you want from your pension fund – but only if you already have a guaranteed pension income of at least £20,000 per annum (this can be made up of the State Pension and Private Pension income but cannot be made up of other earned income or investment income).

Could Mortgage Interest Rates Go Up Soon? Can You Save Money Immediately?

With the economy starting to improve a rise in mortgage interest rates starts to look more likely. Fixed interest rates are at historically very low levels and it is worth taking advantage of this opportunity. Check your mortgage now! If you are on your lender’s normal variable rate, contact us to discuss your options.

A TIME TO CHANGE?

Mortgage lenders have been reducing rates generally and fixed rates for 3 and 4 years are now under 3.0% and 5-year rates at 3.5%. While the economy is probably going to mean that the Bank of England interest rate will remain low for some time still to come, those who want some future security should consider moving to one of the new fixed rates for 3 years or more.

However, these best rates are really only available to those whose borrowing is 70% or less of their property value and who can prove adequate income and have no credit problems. For those not in this category, rates are not going to be as competitive and it may be best to stay with your present lender. But feel free to give us a ring to check it out for you. We make no charge to investigate what might be available for you.

MORTGAGES – DON’T PAY MORE THAN YOU HAVE TO!

The residential property market is still relatively quiet. Lenders are being forced to bring out new offers to tempt borrowers to move or remortgage. Our general advice for those on their lenders’ standard variable rate is to remortgage to a fixed rate for between 3 and 5 years. There is generally money to be saved and peace of mind to be gained. We will be happy to review your options for you. Note: those who still have interest-only mortgages should take immediate advice to ensure that they either move over to a repayment type of mortgage or have sufficient resources to pay the mortgage when it falls due.