Mortgage Common Mistakes
Releasing Equity from your Property:
• Releasing equity from your property without considering all the options first such as trading down in property size.
• Releasing equity and not using a Safe Home Income Plan (SHIP) registered organisation to ensure your property and tenure is safe.
• Releasing equity without looking at grants for the work you are considering first.
• Releasing equity without realising what impact this will have on your state benefits.
• Releasing equity too early only for the interest rate to roll up and eat into your equity at a time when property prices may fall.
• Releasing equity for access to it, but then putting it into your bank account. If you did this and you were a tax payer you would be paying 55% more for the cost of the borrowing than the income you would receive currently.
• Not understanding the difference between a lifetime mortgage and a home reversion scheme which will have a very different impact on your finances.
• Paying fees to someone who is not independent to arrange such a scheme for you and missing out on independent advice. The cost difference between the most competitive and the least competitive of the best offerings is still over 27% which is better in your pocket than theirs.
Mortgage and Debts:
• Having credit card balances outstanding and personal loans with high interest rate charges.
• Not reviewing the mortgage rate every year to make sure that it is still offering the best value for money.
• Paying interest monthly which is only adjusted annually by the building society.
• Taking out building and contents insurance with the lender at a more expensive rate than can be secured through an independent broker.
• Overstretching mortgage levels and not being able to cope with any increases in future rates.
• Waiting to find a house before arranging your mortgage.
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‘Your home may be repossessed if you do not keep up repayments on your mortgage’
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Your home may be repossessed if you do not keep up repayments on your mortgage.
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