We can’t believe it’s October already, the countdown is on to Christmas, and, like any good advisor, we are sending you a friendly reminder to get organised ahead of the silly season.
We’ve delved into the term ‘Mortgage Prisoners’ and why it is so essential to be in touch, ideally, six months before you need to remortgage or take out a new mortgage. We think it might be good to mention that the best way to thank your adviser is to refer us to your friends and family. Do you have a friend or family member who are looking for any services? We’d value it greatly if we could send this to anyone who might benefit.
Let’s dive in!
In this month’s newsletter:
Why It Pays to Speak to a Mortgage Broker Six Months in Advance.
When it comes to buying a property or remortgaging in the UK, most people don’t think about mortgages until they’ve already found a home. Or their current deal is nearly up. But, by then, the clock is ticking, and options can be limited. Speaking to a mortgage broker around six months before you’re ready to move gives you breathing space, and often, a much better outcome.
Give Your Credit Time to Shine
Lenders want to see a solid track record, not just a last-minute tidy-up. I’ve seen clients surprised by old defaults or forgotten credit cards that popped up on their file. By starting early, you can deal with these issues well before they become a stumbling block. Six months is usually enough time to make meaningful improvements.
Protect Yourself from Rate Rises
The mortgage market moves quickly, sometimes overnight after a Bank of England announcement. For example, those who secure a deal months in advance can find themselves with lower repayments, saving thousands. Even with rates slowly decreasing, you (or we) never know what is around the corner. So, it’s so good to have rates locked in, and we can always change them if the rates continue to drop.
Know What You Can Actually Afford
There’s nothing worse than falling in love with a property only to discover it’s beyond your borrowing limit. A broker can run the numbers in advance so you know exactly what you can afford. If your budget needs adjusting – maybe cutting back on certain commitments or tidying up regular spending – six months gives you time to make those changes.
Get Ahead with Paperwork
If you’re self-employed or a contractor, you’ll know that paperwork is half the battle. Lenders can be strict about accounts, tax returns, and income evidence. Starting early means no last-minute panic to dig through old files. Everything’s ready to go when you need it.
Walk Into Viewings with Confidence
Estate agents and sellers take buyers more seriously when there’s an Agreement in Principle in place. It shows you’re prepared and able to move quickly. In competitive areas like London or Manchester, that can give you the edge over other buyers.
Getting a mortgage broker involved six months early puts you in control. You’ll have time to improve your credit, secure a good rate, sort your paperwork, and approach the property market with confidence.
Thinking about buying or remortgaging in the UK? Get in touch today for a free consultation, and let’s plan your mortgage journey together.
Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it.
Have You Heard of the Term ‘Mortgage Prisoners’?
A mortgage prisoner is someone who is up to date with their mortgage payments but is unable to switch to a more affordable deal. This situation often arises due to stricter lending criteria introduced after the 2008 financial crisis. Many of these homeowners are stuck with high-interest rates, sometimes paying significantly more than current market rates.
Imagine paying an interest rate of 9% or more while others are securing deals at 3%. That’s the reality for many mortgage prisoners.
For homeowners aged 55 and over, a lifetime mortgage might offer a solution. This type of equity release allows you to unlock the value in your home without the need to move. The loan is repaid when you pass away or move into long-term care, and there are no monthly repayments. Interest accrues and is added to the loan.
While a lifetime mortgage can provide financial relief, it’s essential to consider the implications. It can affect eligibility for means-tested benefits and reduce the value of your estate. Therefore, it’s crucial to seek professional advice to determine if this option is suitable for your circumstances.
If you find yourself in a situation where you’re unable to switch to a better mortgage deal, it’s time to explore your options. Consulting with a qualified advisor can help you understand the best course of action tailored to your specific needs. Don’t let the term “mortgage prisoner” define your financial future. Take control today – give us a call or send us an email to hear more.