Fresh Approach Finance Limited. Registration number: 07262810
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Your Mortgage Options: Fixed Rate, Tracker and Standard Variable
Date: September 28, 2016
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If you have been looking into getting a mortgage, or if you already own one, there are two types of mortgages you will have come across – fixed rate and variable/tracker mortgages. Now, getting a mortgage will likely be the most expensive investment you have ever made and so it’s crucial that you understand which type fits you and your circumstances the best. Understanding the key difference between the three mortgage options on offer, is vital to deciding which one is best for you.
First let’s look at standard variable rates, these are the rates people find themselves on after their fixed rate has ended, if they haven’t looked into re-mortgaging and finding a great fixed rate deal with another lender. While some lenders may hold it just above the Bank of England’s base rate, most lenders will fix their own rate and will increase it as it sees fit. If you are stuck on an SVR you may be missing out on securing cheap deals on a fixed rate tight now – there is no guarantee your SVR rate won’t increase at any time and fixed rate deals may also change in the near future. To find out if there is a great fixed rate deal available for your mortgage right now simply give us a call on 01642-318419.
Fixed rate mortgages are essentially when a lender gives you a great short-term rate in return for you signing up to a long-term mortgage. In this scenario, whether or not market interest rates fluctuate, your short-term interest rate will remain the same for the duration specified. So if you’re on a 25 year mortgage with a three year fixed rate of 2%, in those three years interest rates may go up to 8% but you’ll still only be paying 2%, as agreed with your lender. This is great for short-term security and stability as you will know exactly what you will be paying rather than depending on a fluctuating market, meaning you can budget accordingly.
Now the cons of a fixed rate mortgage are that you won’t benefit from any drop in interest rates in those fixed rate years and if you want to move to another lender in those years there will likely be a penalty. Some lenders tend to also charge a high starting fee on lower fixed rates so you must balance these costs against the financial benefits over a period of years, taking into consideration your circumstances. For example, a family on a tight budget is generally better off on a longer fixed rate period, whereas a young couple with expendable income may be better off taking the chance that interest rates may drop but forgoing the certainty a fixed rate offers.
With tracker mortgages you have no fixed interest rate, this depends on the Bank of England’s base rate, meaning your interest rate can drop or increase. Tracker mortgages can work very well in times when interest rates are falling or already very low, meaning you will have to pay less interest. However with this option it is so important to bear in mind that there is a lack of certainty which may not fit with your life or your family’s. For example if you have a tight budget, can you really risk unknown, high interest rates? Right now the base rate is 0.5% but relying on a moveable rate means risking rising interest rates and forgoing certainty – some may be in a position to do this, others may not and the base rate will undoubtedly go up at some point. It’s so important individuals look at their personal circumstances and assess the best route for them and their families – which is what we at Fresh Approach do for our clients.
If you’d like to have an informal chat about the best option for you, one of our advisors will be happy to speak to you on 01642-318419

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Support Richard
Date: August 22, 2016
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Our financial advisor; Richard is training for a 22 mile run up Snowdon, swimming, abseiling & overcoming obstacles for Children with Cancer UK

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How Can I Save Money By Re-Mortgaging My Home?
Date: July 28, 2016
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The answer? Very easily. Allow us to explain…
When you take out a mortgage you agree a typically low rate of repayment for usually two, three or five years, thereafter agreeing to pay on the Standard Variable Rate for the remainder. Bear in mind that mortgages are usually on a 20 to 25 year term and f you never re-mortgage you’ll be paying a high SVR for most of these years!
The SVR tends to be the most expensive rate on the mortgage market is the rate people find themselves on after their fixed rate has ended, if they haven’t looked into re-mortgaging and finding a great fixed rate deal with another lender. While some lenders do tend to hold it just above the Bank of England’s base rate, most lenders will fix their own rate and will increase it as it sees fit.
If you are stuck on a SVR you may be paying much more than you would on a fixed rate, plus as this rate can be changed by your lender at any time it can deny you the security of knowing exactly how much you’ll be paying in the short and long term. The good news is that re-mortgaging can eliminate this problem all together.
Re-mortgaging is essentially shopping around for a new mortgage deal with other lenders, once your low introductory rate term with your current lender ends. What you should then aim to do is get another low fixed rate term, maybe with another lender, giving you a low, fixed rate mortgage for another period of two, three or five years – great for saving you money on repaying interest and giving you security for that period. When that period ends you can do the same and shop around again. Essentially you can pay off your entire mortgage over 20-25 years without ever having to worry about paying high SVRs to any lender.
The re-mortgaging process is not always quick and easy. It may be easy to find the best rates on the internet, but the best mortgage is not just about the lowest rate and rates advertised may not be available to you anyway.
A key difficulty is ensuring you meet the lenders’ criteria and complete a ‘fact find’ to establish this. You can do this yourself, but you will have to complete a fact find individually for every lender you enquire with, typically taking at least an hour for each lender. If you’re set on finding the very best deal this could be quite a lot, even if you only shopped around five or ten lenders you would spend a huge amount of time; but with so many lenders to shop around with you could still miss the deal that is right for you – potentially costing you thousands!
The alternative is using a broker to find you the best deal, this would save you a lot of time as you’d only have to do your fact find and then the mortgage broker will find you the best deal available from their many contacts. This eliminates the time it will take going through the lengthy process with each bank yourself.
With our free Fact Find service, our advisor will have a chat with you, gather the necessary information, explain your options and give you some ideas -some of which you may not be aware of.
Your advisor will also answer all of your questions thoroughly and explain our service, so you know exactly where you stand. This informal chat usually takes an hour depending on how many questions you have. Your advisor will then research the whole market and put together an easily understandable and bespoke plan which will enable you to achieve your objectives, and become mortgage and debt free quicker.
This is an entirely FREE service, without any obligation to sign up to any paid service whatsoever. To set up a free Fact Find appointment, simple give us a call on 01642-318419 or email us.
Bear in mind that there will be fees and costs involved in re-mortgaging but a good mortgage broker (whether ourselves or someone else) will make sure that the benefits out way these costs before you re-mortgage.

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Will Brexit Make my Mortgage More Expensive?
Date: July 28, 2016
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The short answer is that no one knows for sure how Brexit will affect lending, if at all, but the biggest tool we have for predicting this is the current uncertainty surrounding the market. You see, when there is this level of economic uncertainty rates tend to increase as banks cover the risk.
Britain has never left the EU before and so it is only natural that there is uncertainty regarding what will now happen. This uncertainty may also cause an increase in demand for mortgages from families, couples and individuals who are scared of potential future increases and an increase in demand naturally also increases mortgage rates.
At present there are millions of people sat on SVRs because they are slightly lower than normal, however the truth is that these rates can and will increase at any time. Banks can increase the SVR at any time, regardless of the Bank of England base rate (BEBR). But, because the BEBR is low at the moment there fantastic fixed rate deals available. When the BEBR finally does increase lenders will have already anticipated this, and the inevitable large rush of clients who then want to change their mortgages, and will have already increased the costs and fees of the mortgages on offer. So now is most definitely the time to get a fixed rate on a good deal.
What is right for you varies depending on your circumstances. So, a young couple with no kids and surplus income may be happy to wait out the short-term uncertainty or opt for a short-term fixed rate mortgage or variable deal. In this scenario the individual would have to be happy to take the risk that rates may increase in the near future for a chance that they may actually drop. However a family or individual on a tight budget will want long term stability and so may want to look at a long-term fixed rate mortgage deal. It’s simply about looking at all possible outcomes and options and working out what is right for you. (If you’d like some free expert advice on the options you have, give us a call on 01642-318419 or email us)
Naturally most people want the cheapest mortgage deal but it is so important to think about what happens after the cheap two year fixed rate ends. So, if you’re a family on tight budget our team of expert mortgage brokers may recommend a five year fixed mortgage on a slightly higher rate that you are able to afford than a cheaper two year alternative after which you could be in for a shock if the rates have increased.
If you are single or have expendable income each month and can afford a higher rate in the future, you have the option of taking a cheaper short-term deal with the gamble that rates won’t be higher in two years.
One thing we would advise you to bear in mind is that the key is to figure out what you can’t afford to pay in the future rather than hoping something gets a little cheaper now, it’s essentially about minimising risk.

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