Negotiating the best deal; money talk John Atton offers his expert advice on cutting outgoings in the current mortgage market.
AT a time when current mortgage deals are coming to an end, with daily reminders of the increase in the cost of living and a feeling that debts are taking over, now is the time to arrange a full financial check-up which could ease the worries and help you survive the credit crunch.
By carrying out a full review, the chances are high that you could reduce your monthly outgoings and make living more affordable.
With mortgage packages becoming more available, an increased number of lenders who will look at 95% mortgages and many lenders re-pricing their interest rates, now is a good time to review your finances to ensure that you are paying as little as possible. In my experience when mortgage interest rates are higher, having an affordable payment becomes a priority and there are a number of ways in which this can be achieved : Restructure your mortgage
THIS normally happens when your current package comes to an end and your payment is set to rise.
By having a full review, all options can be considered and one way to achieve affordable repayments is to extend the term of your mortgage. When rates fall, the term can be shortened providing payments are affordable. This method can also be used if you want to borrow additional money for home improvements.
THIS can be considered when there is a need to make monthly payments affordable, particularly when mortgage rates have increased.
The advantage of arranging this is that it should result in lower total monthly outgoings. However, one should be aware that if you do consider this option the overall cost of the loans would be greater as the loan would be over a longer period. If you decide on this option, your adviser will show you what the additional cost of adding the loans to your mortgage would be.
This action can only be considered where there is sufficient equity in the property that you own.
It is important to get the best qualified advice and you should ensure that the broker is fully independent and has access to all available packages and does not, as in some cases, only have access to a limited panel of lenders. If you want to know that the broker you intend to use is fully qualified, check to see if they are a member of the Personal Finance Society.
Before receiving any advice ensure you are given an initial disclosure document which shows the status of the person you are dealing with, what level of advice they are authorised to give, how they get their income and a statement as to what fee they are going to charge for their advice. If a fee is to be charged an agreement form must be completed by the adviser at the initial interview.
You should also ensure that full details of all your circumstances are taken by the adviser so that both advice and a recommendation is made.
While there is still some way to go before normality returns to both the housing and mortgage markets, it is reassuring to see that there are signs that lenders are making lending more achievable and with the right expert independent advice it is possible to secure competitive mortgages.
John Atton is an independent financial adviser at Personal Touch Northumberland, authorised and regulated by the Financial Services Authority. He can be contacted on ( 0191) 266-9966 or email firstname.lastname@example.org
'One way to achieve affordable repayments is to extend the term of your mortgage.'