What happened in July?
The school holidays are here. As you can see Kate’s little boy has been enjoying attending forest school over the holidays.
Are you counting down the days yet until the kids go back? Emotions have been high in the office as several of the girls have children moving onto secondary school, so there are some big changes ahead. The summer break is also a good time to come and see us if you work in a school and have more time to spare. Add us to your summer to do list and get another job ticked off your ‘to-do’ list.
Congratulations Lionesses! What a journey you have had to the final. We are sending lots of luck from our fierce team to the Lionesses. Hopefully they bring it home and there is good news to report on next month!
Barbie mania has struck the globe, and of course our offices. We could not let this opportunity pass without jumping on the bandwagon and doing our own Barbie posts! There was a lot of discussion in the office around if there was a Redditch or Birmingham Mortgage Advice Barbie, what would she be like? The main suggestion was that she would need to drink a lot of coffee and have a refillable wine glass!
Less Barbie and more mortgage related; did you catch the Martin Lewis Special? It was good to watch this, making mental notes and confirming that the advice he was offering was the same as what we are currently! Well done girls!
We have had a lot of internal training this month as our industry has big changes happening with regards to regulation that sets higher and clearer standards of consumer protection across financial services. Our focus has been around this and to ensure we are ready for any changes, so we can continue to offer our customers the highest level of service.
We have put a temporary pause on external training with providers and lenders whilst the team are so busy. A lot more work is required for each case at the moment, with the way the market is, even on normally straightforward cases.
What’s been in the News?
The Bank of England increased the base rate on the 3rd of August by 0.25% to 5.25%, the 14th consecutive increase. The increase, as expected, has caused a lot of concern to many of our clients and you should contact us if you need any advice or support about the base rate change. We will keep you updated on future changes.
Remember – just because the Bank of England’s base rate is increasing, it doesn’t mean Fixed Rates automatically increase by the same amount. The market has felt a lot calmer over the last couple of weeks and we are pleased to say we are feeling a lot more stability in the pricing and communications we are receiving from the lenders. And although slowly and slightly, the lenders are starting to pass some reductions to borrowers, as we have seen most of the major lenders make reductions to their product ranges over the last 2 weeks.
You may have heard in the news about the New Mortgage Charter, which started in July, and has been signed between the government, major mortgage lenders and the Financial Conduct Authority.
This has been designed to help people who are struggling to make their mortgage repayments, and various commitments have been agreed from the major lenders such as you can now switch to interest only payments for six months, and lenders offering a new rate six months before their fixed deal ends.
The changes demonstrate the dedication from the lenders to support their borrowers and have been welcomed as temporary respite for some customers that are struggling.
Please note though that the advice from the Financial Conduct Authority is if you can keep up with your normal payments then you should, as temporary changes could result in higher payments later on. We can always advise too.
Kate’s Case of the Month: Porting
This month it’s one for Louise from our Kings Norton office.
Louise has recently advised a couple who wanted to move in together. One of the couple already had their own home and a residential mortgage. They came to Lou and were quite honest and didn’t really think she could do much to help, but to their surprise, Lou has been able to offer them exciting news that they can port the mortgage that one of them currently has to a new property, and also add his partner onto the ported mortgage. The clients didn’t realise they could do either of these things. By recommending them to ‘port’ instead of taking the whole mortgage to a new lender, Louise has saved them paying an early repayment charge of £8000!!
Porting a mortgage means moving the existing mortgage product to a new property. So, for example, let’s say you want to move, but are part way through your current product, and there are hefty early repayment charges to pay if you were to exit the mortgage early. There is a section on your mortgage offer about what happens if you move house. Sometimes, you have the possibility during the initial product period to “port” your existing mortgage product(s) to a new property.
Not all mortgages are portable, though, and even if they are, there’s no guarantee that the lender will allow it to happen. You would still need to meet current criteria, affordability and credit checks; all the things you would need to do if you were applying for a new mortgage. We regularly manage ported cases, and like in this case, clients are often surprised it is even a possibility.
Alternatively, if you are looking at a higher value property, then there may be an opportunity to take out a “top up” loan to cover the extra needed. Porting a mortgage product can mean clients transferring over a really competitive rate and product for a good proportion of the new mortgage and sourcing the best product available currently for the top up with the same lender.
If you are looking at moving home and need advice about the best way to do it, then please contact us. We can review your existing mortgage – even if we didn’t arrange it for you – and look at what the best options are. Don’t let this be a barrier to you moving to your dream home.
I am thoroughly enjoying being a full time Mortgage & Protection Advisor again.
I always look forward to seeing an existing client, who had taken out a longer-term product such as a 5-year fixed, and I previously last met with them in my home office. We could do with more than the hour as there is so much to talk about before we get to the nitty gritty.
Last time I met some of these clients I was at the end of my pregnancy with Joseph, and now he is going into year one at school! Often these are the clients that are in need of my advice the most, as when they previously saw me the rates were really low, and they have never experienced the volatile market we are currently in. They need expert advice but also delivered in a sensitive and sympathetic way, as some of the changes to their payments may come as a surprise.
A large proportion of our cases at the moment are existing clients who took out 5 and 2-year products that expire this year, so they are keeping us extremely busy with re-mortgages and product transfers (staying with the same lender).
If your mortgage product is due to expire before February 2024, it’s time to start looking at your next steps and options for re-mortgaging. You can secure a new product now, and we will keep an eye on it for you, and if a more competitive rate becomes available before your current rate expires, we can review what we have done for you. Let us do the hard work for you. Save yourself time and endless hours on comparison sites. Please do not bury your head in the sand. Contact us and book in.
Enjoy the rest of your summer.
100 The Green, Kings Norton, Birmingham, B38 8RS
Birmingham Mortgage Advice is a trading name of McTernan Financial Ltd who are an Appointed Representative of PRIMIS Mortgage Network, a trading name of Advance Mortgage Funding Ltd. Advance Mortgage Funding Ltd is authorised and regulated by the Financial Conduct Authority.
Registered Office: 8 Church Green East, Redditch, B98 8BP. Registered in England and Wales. Company number: 09168296.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
Most Buy-to-Let Mortgages are not regulated by the Financial Conduct Authority.
The guidance and/or advice contained within this website is subject to the UK regulatory regime and is therefore primarily targeted at consumers based in the UK.