MORTGAGE PLANNING
Your property may be repossessed if you do not keep up repayments on your mortgage.
Financing the purchase of our home or an investment property can often be the largest financial commitments we take on in life.
Knowing how much you can borrow, the size of deposit you will need and how long you can take the borrowing over can be bewildering and to add to the confusion, each lender has their own set of rules and limits. The mortgage market today is also filled with different types of mortgage, each of which can offer different features and types of interest rates.
We get to know you, your financial position and how you would like your borrowing structured, before sourcing the most suitable way to finance your home or investment property. We may also introduce you to one of our trusted partners, who offer mortgages and protection from a range of providers.
Factors we need to consider
WHAT
MORE
- What is the purpose of the borrowing? (i.e. to re-mortgage, to buy your first home, to move home, to consolidate debts, home improvements, or to buy a property as an investment etc.)
- What value of house are you looking to buy, or, What is the value of your current property?
- What is your financial position (i.e. employment type, sole or joint borrower, income level, existing debt, outgoings etc.
- What is your attitude towards interest rates? (i.e. do you want to look for the lowest initial cost or is fixing your payments a higher priority?)
- What is your attitude towards paying fees for your mortgage?
WHEN
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- When will you need the borrowing to start?
- When will you want the loan to be repaid?
- When do you envisage there may be changes to your circumstances (i.e. potential to repay the loan early, looking to move to a larger property or downsize etc.)
HOW
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- How do you plan to repay the loan (i.e. monthly repayments, using capital or a combination of the two)
- How much can you afford to pay towards your mortgage each month?
- How will you continue to pay the mortgage if you (or a partner) dies, becomes seriously ill, or can not work due to illness or accident?
- How long do you feel comfortable tying yourself into a specific mortgage interest rate?
- How do you plan to pay any fees relating to your mortgage? (i.e. upfront or add to the loan)
So how do we approach this journey?
Identify your destination
Firstly we need to ascertain your need for borrowing, the level of borrowing you require and the term you need the borrowing over.
Where are you now?
Once we understand what you are looking to achieve, it is important to take stock of where you are now. Do you have an existing mortgage and some equity in a property, or are you looking to buy your first home? Are you looking to buy the property as an investment?
How did you get here?
Once we have plotted where you are on your journey, it is useful to understand how you arrived here and to review your existing planning. Do you have an existing mortgage or other borrowing? Do you have capital you have saved up towards this goal? Is your existing mortgage protection still suitable for your needs? What type of interest rates have you taken out in the past (i.e. Fixed, Variable rates etc.) and what has been your experience of previous borrowing?
How can we get you there?
Once we have a good understanding on where you are and how you got here, we can assess the available options and make the best recommendations on how to reach your goal. Is it a better idea to use other assets towards the goal or does increasing your borrowing make more sense? What style of interest rate would best meet your objectives and preferences? Would shortening your term be affordable and help with regard to retirement plans? What level of budget is affordable to you now and in the future?
Service stops
As with all other areas of your financial life, your borrowing needs and preferences are likely to change over the years. The arrival of children, divorce or simply the desire or need for more or less space can all be reasons for the need to move home, or to improve your current property. Further to this, it can often be more cost effective to re-mortgage every few years to secure lower interest rates, so regular reviews of your borrowing makes a lot of sense.
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Contact
E: graham@woldsfinancialplanning.co.uk
T: 07980 568 407
A: 56 The Mile, Pocklington, York, YO42 2HG