Don't be pressured to make a mortgage decision.

Some mortgage lenders are sending out letters to those coming to the end of their product term offering them new rates, but giving them a time deadline in which to switch.  We had one customer recently who was four months out from their current rate changing from a fixed rate and moving on to the lenders Standard Variable rate.  They were offered some great new rates to stay with the lender, but the way the letter was worded, suggested that there was a deadline of just two weeks in which to accept, even though their current product wasn’t changing for four months!  This is not acceptable, no one should be pressured to accept a deal.  What if rates decrease in the next three months?  You’d be annoyed.  Read the small print, do not panic and get expert advice. 

We all know life doesn't end at age 65-70 and neither should it on the high street!  Often, retired people have managed their finances successfully over the years and enter retirement mortgage free.  At the same time, many, whilst having no mortgage, also suffer from reduced income and there is a saying in our profession that it is not always wise to have everything tied up in bricks and mortar and yet have nothing to spend.  Others may wish to continue their mortgage past normal lender retirement age, whilst they may still be working.  There are schemes where equity can be turned into a mortgage (not necessarily equity release) and where off-spring may be able to assist with the repayments in order to secure and protect their inheritance whilst also ensuring a comfortable retirement for their parents.  This is not right for everyone, but it is certainly worth talking to a qualified adviser to review all possibilities.

And finally, do you look at your financial budgets frequently?  A report from a well-known credit referencing agency has suggested that over 78% of mortgage people surveyed are not currently budgeting for a rate rise.  We all know rates will rise at some point, probably after Brexit now, but nobody knows when this will happen!  Many people asked did not know how much a rate rise would cost them on a monthly basis, despite many respondents believing rates would rise over the next twelve months! A 1% rise on a £100,000 mortgage can increase the monthly payment by as much as £83.  As we go in to further months of uncertainty, and especially with regards to the cost of funding within the mortgage market, do make sure you are ready for all eventualities.

Mortgages for the Self Employed or Over 65s

Mortgages for the self employed have, over the years, sometimes been as difficult and as scarce as those for First Time Buyers.   Lenders have noticed this and a few have taken action.  Over the last couple of weeks, we’ve seen some lenders launch products just for the Self Employed.  Specifically aimed at those newly self employed and with minimal accounts.  Although not household names, specialist lenders have funds to lend and a desire to create products to assist gaps in the mortgage market.  For instance, the usual requirement on the self employed is 2 or 3 years accounts and possibly the SA302 returns from the Inland Revenue.  The specialist lenders, for the right deposit, will allow just 1 years accounts to prove income, normally with an accountant projection for the second full year and probably up to six months personal and business bank statements.

Product innovation is key in the current climates, when volume is not necessarily the be all and end all.  As mentioned, specialist products to fill gaps are high in demand.  We’ve seen some lenders insisting on repayment of their mortgage around age 70 regardless of the clients circumstances and others will no longer allow 'sale of property' to be an acceptable repayment option at the end of the term for those currently with interest only.  Customers are seeking solutions.

One lender, through AToM, has provided one solution to the ‘lending in retirement’ conundrum. Often, retired people have managed their finances successfully over the years and enter retirement mortgage free.  At the same time, many, whilst having no mortgage, also suffer from reduced income and there is a saying in our profession that it is not always wise to have everything tied up in bricks and mortar and yet have nothing to spend.  Others may wish to continue their mortgage passed the normal lender retirement age, whilst they may still be working.  There are schemes where equity can be turned into a mortgage (not equity release) and where off-spring may be able to assist with the repayments in order to secure and protect their inheritance whilst also ensuring a comfortable retirement for their parents.  This is not right for everyone but it is certainly worth talking to a qualified advisor to review all possibilities.