25 July 2019

Don't jump on the first offer. Always do your homework!

So, your mortgage is coming to the end of its product term.  You may have fixed for an amount of time, maybe two, three or five years.  And now your rate is due to change to the lenders variable rate, which in the main, is higher than the rate you are currently on, and your monthly payments are about to increase.  But hold on, your current lender has seen the light and decided to offer you some 'fantastic' products to keep you.  Even though you are four months out of your product change, they've given you just fourteen days to take the ‘new product’ and stay with them.  After this time, they can’t guarantee the ‘new product’ will be available to you.  What do you do?

One recent example a customer showed us, had some very attractive rates.  However, when we looked, the same lender was offering better rates through the intermediary sector, with the same fees, etc.  I always say do your homework, and lucky this customer did as it saved them 0.1% on the rate over a three year period.

Even though some lenders put a deadline on any new offerings, remember most are contacting you three or four months before your product changes, so there is plenty of time to review your options and choose the best rate for you nearer the time.   This is a pretty straight forward process to arrange and normally they will have minimal paperwork and fee requirements.

As both a specialist mortgage provider, as well as whole of market (including the high street lenders), impact specialist finance has seen an increase recently in this type of transaction and why wouldn’t you stay with your current lender if they offer you a great product? 

But sometimes they don’t offer you a product at all!  It doesn’t mean they won’t!  It just means that you should find an experienced mortgage specialist who may be able to open up a door to a wide range of opportunities available to you. This is the biggest debt you have so take your time, ignore the ‘time pressures’ and ensure you seek advice, so you don’t regret it further down the line. 

18 July 2019

'Highly Commended' by What Mortgage / Fixed rates proving popular!

Firstly, we are delighted to have been recognised and ‘highly commended’ in this year’s ‘What Mortgage?’ awards Best Mortgage Broker category.   This is a great testament to the team we have and we’re very grateful to all those who have voted for us.  We are proud to be in our 28th year in the mortgage sector and look forward to many more!

The majority of clients visiting impact are looking for a longer-term fixed rate, although some are still happy to take a short term tracker rate and are confident that rates will not fluctuate too much in the coming months.  There are some good products available with minimal set up costs that have no early redemption penalties at all.  So if you wanted to switch products later on, to a fixed rate for example, this could be done (be aware that most lenders charge product fees on fixed rates).  Some lenders even offer the ability to do both in the same mortgage offering.  Lenders are innovative when it comes to attracting a certain type of business and clientele!  But do remember that tracker rates can go up, as well as down.  Although currently it does seem to be a ‘race to the bottom’ with regards to pricing.

We're also seeing lenders look at criteria to attract business, rather than just a low rate.  This could be a key part of the mortgage market moving forward.  A huge number of people will be ignored by computer technology and credit scoring decision making systems. But this does not mean they should not obtain mortgage finance, it just means they don't meet all of the rules entered to make that particular decision!

I often wonder if we are on the way back to as it was in 2007/8.   Rates couldn't go much lower then either and criteria played a huge part, then the ‘crash’ happened.  Fast forward to today and again rates can't get much lower and lenders are looking at gaps in the market where a criteria change or tweak might give them the competitive edge.

Who knows what’s around the corner and what will impact the market?  But in the meantime, make sure you think about number one and ensure you have the best rates available to you.

11 July 2019

AVM, Homebuyers, Building Survey - Which valuation is right for you?

With every mortgage, the lender will require to know that they are lending money on a suitable property.  This will entail a valuation and normally a surveyor will visit the subject property.  This is a fairly basic valuation and is for the lender, paid for by the borrower, and it should not be relied upon as a guarantee that the property is sound and fit for purpose.  It only responds to the questions lenders ask relating to the property being suitable security for mortgage purposes.  They have no obligation to tell you what is in the report or give you a copy!

In some cases, they will not actually visit.  This is because they can often access detailed information electronically, normally called an Automated Valuation Model (AVM), where a mathematical system calculates the property’s value based on a number of comparable properties and other in-depth calculations. 

Therefore, you should always consider the benefit of an independent survey on the property you are purchasing to ensure that any and all defects are noted before signing contracts. There are two main types of survey available, aside from the standard lender mortgage valuation.

Homebuyer Report - a standard format set out by the Royal Institution of Chartered Surveyors (RICS). This will not focus on every aspect of the property as a building survey will (below), but will advise on urgent matters needing attention. It may advise if items (a leaky roof for example) might have an adverse effect on the value of the property, or if further investigations are required.

A Building Survey – an in-depth survey for all properties: listed buildings: buildings that have had extensive alterations, or of an unusual construction. The surveyor will examine all accessible parts of the property and advise on technical information: the condition relative to age: further special investigations required and provide extensive information on major or minor defects.

Both will comment on whether the agreed asking price is reasonable, whether it reflects the condition of the property and should give you peace of mind whilst making the biggest purchase of your life!

Finally, if you have any burning questions or items you would like me to discuss, I’m always looking for content ideas, so please don’t be shy to ask!  You can email me at dale@impactsf.co.uk or call me on the number above.

04 July 2019

A computer can't listen to your mortgage needs and requirements!

With technology taking over the world, and so many transactions taking place over the internet, it might be easy to be attracted to products online.  There is so much information readily available and over 11,000 mortgage products to choose from, but these types of things can get lost in translation.  Therefore, seek advice!  Yes, it may cost you a small fee to have someone research the market on your behalf and make recommendations, having first assessed your short to long term needs and requirements.  More importantly, it could save you thousands in the long run, versus choosing the wrong products yourself. In addition, any professional will probably seek to build a long-term relationship with you and contact you at the time your current rate is coming up for renewal to ensure you have the best rates available.
It doesn't matter whether you are experienced, or if this is your first time.  Property ownership can be complicated, so explore all the options and do your homework.  There are a huge number of lenders available to you and all have competitive edges and good criteria options for the right customer.  Make sure you understand everything at the outset so that you don't regret it later!

A good independent mortgage adviser will be able to review the whole market for you and can identify the best lending options and then deal directly with the lenders central processing units, speeding up the process from application to offer. That said, even in this area we know of at least one lender that is sixteen days behind on post or electronic updates!  

An experienced adviser will listen to your specific needs and timescales and ensure that they line you up with a lender who will match both. So, if speed is crucial, then you may need to consider working with a lender where the rate may not be the keenest on the market, but they will get the deal to completion within your target timescales to ensure you get the property of your dreams.  Remember, make sure you adviser looks at the whole market, and not just a limited panel of lenders ensuring that you get the widest choice of lenders and products (including exclusive deals) available to you.