[New] Mortgage Advice

Many people are concerned about the increases in the cost of living, and one of the biggest financial commitments you will have in your lifetime is a mortgage. In this issue Suffolk Mum and Independent Mortgage Advisor Sharon Wright shares some professional mortgage advice.

With interest rates rising and mortgage lenders tightening their criteria and affordability, you may be wondering when is a good time to review your mortgage and can you protect yourself against an increase in future payments?

Here are some of the common questions that I get asked by my clients...

When should I start to review my mortgage?

You can look to review your mortgage six to seven months before your current mortgage deal is due to end. This will give you an idea of what rates are available and the potential new mortgage repayments. It is important to find out what new mortgage rates your current lender will offer you too so that you can compare this to the other lenders. Each lender has their own criteria so it’s worth checking to see how early your lender can offer a new rate.

Whether you stay with your existing lender or look to remortgage to another provider, reviewing your options months before your fixed or tracker rate ends means that you could secure a new deal that protects you from further interest rises. Many lenders’ offers are valid for six months and if the rates come down then you could review this again before your deal ends.

What happens when my mortgage deal comes to an end?

Unless your mortgage is on a lifetime tracker, after your fixed or tracker rate mortgage ends you will automatically be moved over to the lenders SVR (Standard Variable Rate).

WHAT IS A STANDARD VARIABLE RATE? A mortgage that is on the SVR (Standard Variable Rate) is similar to a tracker rate in that the monthly payments can go up as well as down. The SVR is the rate set by the lender and changed at their discretion. It is up to each lender as to how much they will increase or decrease their rates and this increase could be more than the Bank of England base rate.

With the majority of lenders SVR’s being over 6% and continuing to rise at the present time, it is wise to plan ahead to avoid paying this default rate when your mortgage deal ends. How can I protect my mortgage repayments from a rise in interest rates?

It is difficult to predict where the interest rates will end up this year but one thing is for certain, we will not be enjoying the historically low rates of the last few years. There are some steps you can take to protect yourself financially against a mortgage rate rise.

A fixed rate will give you the certainty that whatever happens to the Bank of England base rate or your lenders SVR, your mortgage repayment will remain the same throughout the deal period. Rates can be fixed for 2,3,5 or even 10 years. The longer you are fixed the longer you are protected from any interest rate rises. However, if during your chosen period the rates become more competitive you may not be able to switch to a better deal without incurring charges.

Can I overpay my mortgage?

Most mortgages allow you to overpay a certain amount without penalty (check the terms and conditions of your mortgage). Overpaying your mortgage will reduce your mortgage balance, saving you interest over the full term.

If you are fixed into a low interest rate take advantage if you can, as overpaying now could give you a buffer for when you come to the end of the rate and source a new mortgage.

STRUGGLING TO KEEP UP THE PAYMENTS ON YOUR MORTGAGE?

Should you be in a position where you are having trouble keeping up your payments then you should contact your lender as soon as possible. There are options available depending on your financial situation and your lender can talk these through with you. The lender might offer to extend the mortgage term or suggest a reduced mortgage payment for a period of time. This will make your monthly repayments less but will increase the interest you pay over the term. This could however be a short term solution to get you back on your feet.

You can also get free money advice from various charities and organisations including Citizens Advice and Step Change Debt Charity

Reader Offer

I usually charge a fee of £275 for a mortgage or remortgage, which covers all administration costs. However, the initial consultation is free and the fee is only payable after a mortgage offer has been produced.

For readers of Families Suffolk Magazine I will reducing this fee to JUST £99 saving you £176.00.

Please use discount code: FamiliesSuffolk

For more information or to book a FREE CONSULTATION with Sharon Email: sharon@wolseymortgage.co.uk Call: 07955 199219

For more information about Wolsey Mortgage Company visit: www.wolseymortgage.co.uk

Your Home may be repossessed if you do not keep up repayments on your mortgage. Wolsey Mortgage Company Ltd is an appointed representative of The Right Mortgage Limited, which is authorised and regulated by the Financial Conduct Authority.