Mortgage Common Mistakes
• 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.
For truly independent advice from the FT Adviser, UK Mortgage Broker of the Year for 2005, 2006 and 2007, complete our enquiry form or feel free to call us in confidence on 0845 230 9876.
'Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage'
'For lifetime mortgages to understand the features and risks ask for a personal illustration.'
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