Why getting your mortgage reviewed annually is always a good idea!

Often people will leave it years before having a mortgage review. Often not taking advantage of changes to lending criteria, potential improvements in credit scoring and being able to change the term of the mortgage. All of which helps in getting the best deal.

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During 2016 we encountered clients, Mr & Mrs M, who wanted to move to their dream property – a four bed detached family home, having previously not had enough room for the children to enjoy their home. Due to Mr M poor credit in the recent past a conventional mortgage was not available, however using a more obscure mortgage lender we secured a mortgage for the couple and they have enjoyed their home for nearly two years. The interest rate was higher than a standard mortgage so we set the mortgage up over 40 years to ensure that the payments stayed as low as possible in the early years so the couple could easily afford the repayments.

Whilst living in their new home they had done a lot of renovating to the property. And had run up quite a large debt, this along with car finance and a few credit cards was now amounting to quite a substantial monthly outgoing, this was putting pressure on their finances.

Mortgage - £903

Credit Cards - £250

Car - £142

Loan - £180

Store cards - £50

Amounting to a total of £1525 every month. This figure does not include regular household bills.

 

Upon reviewing this clients file we spoke to the clients and they informed us their main objective short term was to save money on a monthly basis however, they both wish to retire around age 55. With both these factors in mind we decided with the clients that we should incorporate all their debts into the mortgage to enable a clean slate for them going forward.

Their existing mortgage was around £195,000 and their new mortgage would be around £222,000.

We found them a deal over an initial fixed period of five years ensuring that they knew their monthly payment for the first five years of the new mortgage deal, this payment was £1069.

The figure shows a monthly saving of £456 initially.

The fantastic part of what we were able to do it reduce their mortgage term so instead of their mortgage being paid off at age 68, we reduced this term down to 22 years meaning that the clients would now be just 52 years old when they repay their mortgage, and give them that dream of being able to retire aged 55.

With the short term plan of getting the clients the property they dreamed of in 2016, and the long term plan of financial freedom being mortgage free before age 55 we have helped the clients achieve what they thought was an impossible dream just two years previous.

“Had we allowed the client to remain on their existing mortgage which would have reverted to the variable rate and cost the client at least £999 per month they would have incurred an additional charges in mortgage payments of £191,808. This was done by reducing the interest rate they are paying and also reducing the term of the mortgage overall.”

If you would like a no-obligation free of charge mortgage review please complete the form below and one of our advisors will be in contact with you.

CONTACT US

If you have any financial enquiries from mortgage advice to insurance advice, please complete the form and one of our professional team will contact you to discuss your needs.

If you would like to speak to one of our team today please call us on 01656 856120.

Alternatively pop in to our shop at 1 The Portway, Porthcawl, Bridgend, CF36 3XB, we would be delighted to help you over a coffee.

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