great mortgage & protection advice

Buying a home is one of the biggest financial decisions you’ll make in your life. That’s why we’ve produced this guide to help you understand what you need to think about when buying your home or remortgaging.

Buying a home is one of the biggest financial decisions you’ll make in your life. That’s why we’ve produced this guide to help you understand what you need to think about when buying your home or remortgaging. You’ll find a range of information explaining mortgage terminology, the costs involved and how to protect your home and family. Your mortgage and protection adviser is here to help. Our advisers are professionally qualified, with the knowledge and training to help you get the most from your money by identifying your personal financial goals and objectives. They’ll keep you
up-to-date with the ever-changing choice of mortgages from the mortgage market and protection products.

Our expert team of advisers are on hand to talk you through all your financial needs. The Finance Planning Group are regulated by the Financial Conduct Authority (FCA). This means the advice provided by our advisers is monitored and has to be of a certain standard. With their help you can be confident of making the right choices for your future. It really is worth taking their advice.

 

Six ways to lose your home...
1. Unemployment
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Six ways to lose your home...
2. death
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Six ways to lose your home...
3. sickness
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Six ways to lose your home...
4. critical illness
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Six ways to lose your home...
5. fire, storm or flood
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Six ways to lose your home...
6. accident
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It's more than just the mortgage, it's protecting your mortgage and loved ones. Buying a home is a big commitment, so your adviser will also talk about the options around helping to protect your home, belongings, health and loved ones.

Once you’ve had your mortgage approved, the next step is to think about protecting your home and loved ones. The mortgage isn’t usually the only payment you need to make each month. What about covering everyday bills and expenses? Utility bills, food shopping, travel costs, childcare – the list could go on. It’s not nice to think about, but:

How would one partner cope financially with the death or critical illness of the other?

How would one partner cope financially with the death or critical illness of the other?

Could you afford to maintain your current lifestyle?

Could you afford the financial costs of raising your family?

Our wide range of protection products can help provide financial peace of mind when it’s needed most. They’re designed to provide you with a cash sum or monthly payment, depending on the product you choose. Having protection cover in place could help you:

Pay off your debts.

Premiums are based on your personal circumstances. Usually, the younger you are, the less you’ll pay for protection products. We all want security for our future, a chance to maintain the financial stability we have worked so hard for. That’s why it’s important to think ahead and plan for the future.

Who can be covered?

It’s also important to remember that it’s not just the main wage earner that you may need to consider when working out the amount of cover you need. Have you thought about the value of the work you or your partner does around the home? On average Mum does circa £31,000 worth of the domestic work around the home each year, and for Dads it’s £24,000.

Who do you use?

We offer insurance products from a panel of over 12 insurers which enables us to to find you the most competitive terms and cover to suit your perrsonal circumstances.

Borrowing to buy your home...

Make sure you can afford your mortgage before you take it on. If you fall behind with the payments, you could lose your home.

Residential Mortgage

When you buy your home, you’ll probably need to take out a loan to pay for it. A mortgage is a loan that’s secured against your home. This means that if you can’t keep up with the repayments, your mortgage provider can sell your house to recover the money you owe. A mortgage is usually offered at a much lower interest rate than you’d find for any other type of loan.

Buy To Let Mortgage

Buy to Let mortgages are a popular way of buying property solely to let out. These mortgages are very different to a residential mortgage in the way they relate to the income derived from the tenancy. Ask your adviser to explain.

Remortgage

If you change your mortgage to a new lender by remortgaging, you may find you benefit from a better mortgage rate than the one you’re currently paying. Some lenders also offer to pay the legal costs and valuation fees associated with remortgaging. The process for remortgaging your home can take around eight to twelve weeks, as the new lender will need to make similar checks to those made when you first bought your home.

You may have to pay an early repayment charge to your existing lender if you remortgage. Your current lender may also charge you a ‘deed discharge fee’ when you leave your current mortgage. These are all areas your adviser will be able to explain in more detail and help you with. We will need to make similar checks to those made when you first bought your home.

Costs involved with buying a home...

Let's talk about the money you will need to put aside for your move.

Typically between £500 to £1,500

These can be around £80 to £250

These can be around £30 – £60

These should be itemised in the quote provided by your legal adviser

These can be around £50 – £80

The higher the purchase price of a property, the more stamp duty you will pay. Furthermore, if the property you are buying is a buy-to-let or second home the stamp duty increases further. Please see the below table and accompanying examples:



Here are some examples:

Your personal costs...

Let's calculate your fees so that you can budget correctly for your move.

You may be able to afford the deposit and mortgage payments on a new home, but what about the other costs of moving? New research reveals unexpected bills can adds tens of thousands of pounds to the cost of buying and these extras need to be paid upfront.

Moving home can be exciting, but you need to keep an eye on the costs. The estimated average cost of moving in the UK is around £8,885, although this can vary dramatically depending on where you live1.

Here, we break down the cost of moving in to help you avoid any unwelcome financial surprises, whether you’re a first-time buyer or moving to a new home.

Would you like a copy?

Let us send you a copy of your costs for your records.


How much can you borrow?

Make sure you can afford your mortgage before you take it on. If you fall behind with the payments, you could lose your home.

THIS DEPENDS ON:

  • Your income and outgoings.
  • Your credit history.
  • Whether you’re able or prepared to make changes to your lifestyle that may reduce your outgoings.
  • How much deposit you have.

You’ll need to find out how much you can borrow before making an offer on a property. Some lenders will work this out before you find a property – this is called an approval or decision in principle. This will help you know the maximum offer you can make on a property and will also speed up the mortgage process.

Lenders usually base their calculations on your guaranteed earnings such as basic pay, but some will consider part or all of any regular overtime or bonuses. They’ll want to see proof of your income.

HOW LONG WILL MY MORTGAGE LAST?

This is known as the mortgage term. Mortgages usually have a term of between 5 and 40 years. A mortgage should normally be for the shortest term you can afford as this keeps the overall cost down. A longer than necessary term means you’ll pay more interest. It’s advisable that your mortgage term ends before you retire, as it’s unlikely your mortgage repayments will be affordable on a retirement income.

Your adviser will go through your needs and preferences and use these to filter out any mortgage products that don’t meet your requirements. This will reduce the amount of products your adviser will consider for you.

CONSOLIDATING DEBTS

This isn’t suitable for everyone and you’ll need to carefully consider this with your adviser. If you have existing debts, it may be possible for you to add these to your mortgage rather than continue with your

existing repayment arrangements. When you add loans to your mortgage, it’s important to understand the risks:

  • Adding short-term loans to your mortgage means you’ll repay them over a longer term. Unsecured loans are generally paid back over a shorter term than mortgage loans. While the interest rate on your mortgage may be lower than you pay on your loans, by adding them to your mortgage you’re likely to pay more over time. It may not be appropriate to consolidate small or short-term debts.
  • Your existing debts might not be secured on your property. By adding them to your mortgage they become secured on your property.

Ways to repay your mortgage

Two styles of mortgage - Repayment & Interest only

Repayment mortgages

With a repayment mortgage, your monthly payments to the lender go towards reducing the amount you owe as well as paying the interest they charge. This means that each month you’re paying off a small part of your mortgage.

Advantages

You can see your mortgage getting smaller and provided you maintain the required payments, you also have the certainty your mortgage will be repaid at the end of the term.

Disadvantages

At the start, most of your payments go towards the interest on your mortgage. So in the early years, the amount you owe won’t reduce by very much.

Interest only mortgages

These mortgages are now only offered with very strict criteria and are not available to everyone. With an interest only mortgage you only pay the interest charged on your loan, so you’re not actually reducing the loan itself.

You’ll need to have a feasible repayment strategy in place to repay your loan at the end of the term, for example investments and/or savings plans. Lenders will want to see proof of these.

Interest only is typically recommended for Buy to Let mortgages.

Advantages

If the savings or investment plan you choose performs well, then you could pay off your mortgage earlier compared to a repayment mortgage. At the full mortgage term there may be a lump sum available after the mortgage has been repaid.

Disadvantages

Very few investments or savings plans are guaranteed to repay your mortgage in full. If your savings or investment plan doesn’t cover the full amount, you’ll be responsible for paying the difference. Your mortgage lender can demand repayment, and they’ll charge you interest on any outstanding balance until it’s repaid.

How is interest charged and paid?

There are lots of different interest rate options offered by lenders. Interest rates vary from product to product and are dependent on different factors; for example; fixed rate mortgages, how large a deposit you have. Here is our guide to the different options available.

When your income stops, but your bills don’t..

The typical length of time most of us can go without earning any money is only 32 days...

Most of us don’t realise just how quickly the money could run out if anything happened to us or our partners as a result of redundancy, sickness, injury, critical illness, or death. The average UK household would only financially last 32 days before being totally reliant on state benefits, friends or family.

Statutory Sick Pay

You can get £95.85 per week Statutory Sick Pay (SSP) if you’re too ill to work. It’s paid by your employer for up to 28 weeks.

Let’s look at how much you need in order to survive and how you will manage after 32 days…

Before After
Days
Hours
Minutes
Seconds

Your monthly expenditure

How much money do you need each month?

Total Monthly Expenditure

This is the minimum amount of money you need in order to maintain your standard of living.