The bank of mum and dad has expanded to become the bank of family. Its expansion has enabled it to underwrite an even bigger percentage of the UK’s mortgages. This means it has developed even more influence on the UK’s property market. This influence is, however, somewhat controversial given that not everyone has access to it. How the bank of family came about The term “bank of family” appears to have been coined by Legal & General. Recently, they undertook a study that highlighted the importance of non-parental assistance in house purchases. Grandparents in particular tend to be generous contributors. Potentially, this is because they are in a strong position to do so. For example, they may be downsizing themselves and therefore be cash-rich. Moving this money to younger family members could reduce their estate’s liability for inheritance tax. It may also reduce their exposure to care-home fees later. Younger members of the family are, however, also increasing the help they provide. Separate research from Hamptons estate agents and Skipton Building Society suggests that siblings made up a record 11%, more than double the 5% share seen five years ago. Family members, especially parents, may also provide non-cash assistance. In particular, they may allow young adults to stay with them rent-free while they save for a deposit. The bank of family’s lending in figures This year alone, the Bank of Family is set to give £8.1 billion to homebuyers, and support 47% of all homes purchased by buyers under the age of 55. As you might expect, the assistance is unevenly distributed. Firstly, there is a clear and understandable bias towards first-time buyers. Onward movers certainly face challenges but they at least can benefit from building up equity in their home. Secondly, there is a clear divide between regions. Possibly surprisingly, the East of England was the area where the bank of family provided the highest level of support. London came in a close second. Moving out of these areas and into the Midland and North, the level of assistance dropped. The overall impact of the bank of family The bank of family clearly plays an important role in getting individuals on the housing ladder. By doing so, it stimulates demand for property and, per the law of supply and demand, helps support house prices. Ironically, however, this is really only a benefit to people looking to downsize. Onward movers looking for bigger property would benefit from it being priced more affordably. It wouldn’t necessarily matter if their existing homes also reduced in value. First-time buyers would certainly benefit from lower house prices. In fact, even those not in a position to buy would potentially benefit from lower house prices. If landlords paid less for their buy-to-let properties, they would be able to offer lower rents. This in turn would make it easier for renters to save for a home of their own. Realistically, however, the shortage of property in the UK is a strong incentive for people to buy if they can. At a minimum, buying gives people a greater level of stability than renting. At most, it can be an astute financial investment that can literally benefit generations. The personal cost of the bank of family For some people, the bank of family really is a straightforward, no-strings-attached benefit of generational wealth. For others, the strings attached are simply stronger versions of the strings that were attached anyway. In general, family members do whatever they can to look after each other. That’s part of what makes a functioning family. For some, however, the price of accessing the bank of family can be uncomfortably high. It can result in obligations people would rather have avoided. It can result in feelings of guilt if recipients know or feel that people are donating more than they can really afford. Ideally, therefore, the bank of family will be, if not put out of business, then at least given a restricted role in the UK’s housing market. The best, if not only, way to achieve this, is to increase the availability of housing stock. One possible way to do this (and fairly quickly) could be to repurpose office units that have become obsolete due to remote/hybrid working. For advice on mortgage matters, please get in touch The FCA does not regulate some forms of IHT planning. For IHT planning we act as introducers only. Your property may be repossessed if you do not keep up repayments on your mortgage.

As a rule of thumb, when you renew any contract, you should be prepared to move from your current provider. That does not, however, necessarily mean that you should move from your current provider. In fact, if you’re remortgaging, there can be a lot to be said for staying with your current lender. Here is a quick guide to what you need to know. The basics of remortgaging In the context of mortgages, there are two key dates all borrowers need to keep in mind. The first is the mortgage amortisation date. In other words, the date when the mortgage is fully paid off. The second is the mortgage terms. In other words, the date when your current deal comes to an end. It’s vital to have a new deal ready to go when that happens. If you don’t, you’ll be put on your lender’s standard variable rate (SVR). This is their default rate for customers who don’t have a specific offer. It’s often significantly higher than any of their mortgage deals. The process of getting a new deal is known as remortgaging. The practicalities of remortgaging If you move to a new lender, the process of remortgaging itself will be virtually if not completely identical to the process of taking out your previous mortgage. If, by contrast, you stay with your current lender, the process can be much more streamlined. This has three main advantages Reduced costs The fact that remortgaging is the process of switching from one mortgage supplier to another. Even though you're not moving house, when you remortgage, you will need to have some set of costs to pay. These are likely to be higher than they were last time if only because of inflation. If, however, you stay with the same lender, the administration can be kept to a minimum. This means you can expect the costs to be a lot lower. They will probably be well aware that keeping existing borrowers costs less than attracting new ones. The reduction in costs is particularly relevant if you need to roll the mortgage set-up costs into the cost of the loan. You’ll not only save the headline sum but also save the interest you would otherwise have paid on it. Reduced administration Staying with your existing lender can also save you time and, potentially, stress. Remortgaging with a new lender will involve doing all the same paperwork you did when you got your previous mortgage. This in itself is both tedious and time-consuming. It can also be stressful, particularly if you’re working to tight deadlines. What’s more, these may be forced upon you by delays outside your control. Existing relationship with the lender If you’re generally happy with your existing lender then this is a reasonable point in their favour when deciding who should get your custom. Keep in mind that the nature of mortgages makes it quite difficult for customers just to take their business elsewhere. Exiting a mortgage deal early to go to another provider is often even more expensive than a standard remortgage. This means that, in the real world, customers often just have to grit their teeth and deal with their lender until the end of their mortgage term. Getting the best right when you remortgage In theory, getting the right deal when you remortgage may require you to move lenders. In practice, your existing lender may be willing to match another deal for which you qualify. Essentially, the better a customer you’ve been, the more likely it is that the lender will want to keep your business. At the very least, therefore, you should consider giving them the opportunity to do so before you commit to moving your custom elsewhere. For mortgage advice, please get in touch Your home may be repossessed if you do not keep up repayments on your mortgage

Rightmove’s monthly house price index shows UK house prices on a clear downward trend. As yet, there is no sign of a crash. The behaviour is more like a slow deflation. This could be good news for homebuyers. Even so, it’s important to be clear about the implications of buying in a falling market. Here is a brief guide to what you need to know. Be prepared to commit for the very long term It’s standard practice to advise potential home buyers to hold off purchasing until they are sure they can commit over the long term. A typical guideline is around five years but at least three. In a falling market, however, five years is arguably the absolute minimum commitment. Ideally, you should be looking at 7+ years. Buying a property is a significant undertaking There are two main reasons for giving this advice. Firstly, the process of buying property is still very labour-intensive. It therefore carries high transaction costs, especially if you need a mortgage. The longer you stay in a property, the longer you have to amortise those costs. Secondly, property is a very illiquid asset. A simple property transaction can easily take six weeks to go from offer to completion. A complicated one could take over a year. The longer it takes to complete a sale, the higher the risk of buyers pulling out. If there is a chain of buyers and sellers involved in a transaction then this risk becomes even higher. The risks of buying in a falling market If you buy property in a falling market and have to sell up quickly, you may be forced to accept a significant financial loss. Firstly, you’re not going to be able to amortise your initial transaction costs in any meaningful way. Secondly, you’re unlikely to get back what you paid for your property. Thirdly, you may have to wait much longer to find a buyer, during which time your money will stay tied up in your property. In fact, you may find yourself having to carry two mortgages or one mortgage and rent. Assess the location very carefully More specifically, assess the location in the context of what changes will and could happen in your life over 5+ years. In particular, think about your work situation. If anything happened to your current job, how would you go about finding another one? Fully remote work is still an option for some people. For the time being at least, however, it would probably be safer to stay within feasible commuting distance of an employment hub. This would open up options for hybrid and/or fully on-site work. Neither may be your ideal but they could be useful temporary safeguards. Also, consider your personal situation. If you have older relatives, their situation could change significantly over the course of 5+ years. If you have younger children, they will definitely change significantly over that time. Are you confident that the area you’ve chosen will still be suitable when these changes happen? As a final point, think about the area itself. See what trends, if any, you can identify. For example, are any new infrastructure projects planned? If so, what impact could they have? Be careful of pushing sellers too hard One advantage of buying in a falling market is that many sellers are likely to be highly motivated to sell. At the same time, buyers should not expect sellers to be throwing themselves at their feet begging for money. In the UK, falling markets are generally a sign that house prices have become unaffordable for people who want to buy. It does not mean that demand for property evaporates. If, therefore, you make an excessively low offer, you can expect to have it turned down. For further advice, please get in touch Your home may be repossessed if you do not keep up repayments on your mortgage

Acquiring a home is a monumental life milestone, and for most, it necessitates navigating the labyrinth of mortgage applications. However, what should ideally be an exciting journey into homeownership often becomes a source of stress and anxiety. In a revealing statistic, two-thirds of mortgage applicants find themselves grappling with stress during the application process. Let's delve into the reasons why mortgage applications tend to be stressful affairs and uncover the challenges that contribute to this overwhelming experience. The High Stakes Nature of Homeownership The decision to buy a home is not just a financial transaction; it signifies a deeply emotional commitment. For many, a home is the embodiment of stability, security, and the realisation of a dream. Consequently, the stakes are high, and the pressure to make the right choices can induce significant stress. The financial magnitude of homeownership, coupled with the fear of making an irreversible mistake, can weigh heavily on applicants' minds. Complexity of Financial Documentation Mortgage applications necessitate a meticulous gathering of financial documents, including tax returns, pay stubs, bank statements, and credit history reports. The complexity of assembling these documents accurately and comprehensively can be a daunting task. The fear of missing a critical piece of information or making errors in the application process can lead to heightened stress levels. Stringent Lending Requirements Lenders impose stringent requirements on mortgage applicants to ensure their creditworthiness and ability to repay the loan. While these requirements are essential for responsible lending, they also contribute to the stress of applicants. Meeting these criteria often requires a deep dive into personal financial details, potentially exposing any existing financial vulnerabilities. Uncertainty in Interest Rates Interest rates are a significant factor in determining the cost of a mortgage. The ever-fluctuating nature of interest rates introduces an element of uncertainty into the mortgage application process. Applicants may worry about locking in rates at the right time to secure favourable terms, fearing that a sudden rate increase could strain their budget. Fear of Rejection The prospect of rejection looms over every mortgage applicant. Rejection not only dashes the hopes of homeownership but also potentially signifies a lack of financial stability in the eyes of lenders. This fear can contribute to stress, making applicants second-guess their financial standing and the likelihood of being approved. Timeline Pressures The process of securing a mortgage often comes with tight timelines, especially in competitive housing markets. Applicants may feel the pressure to move quickly to secure their dream home or meet a particular closing date. The race against time can exacerbate stress levels, leading to rushed decisions and heightened anxiety. Navigating Complex Terminology Mortgage applications involve navigating a sea of industry-specific jargon, including terms like APR, points, PMI, and more. For those unfamiliar with the intricacies of the mortgage world, the abundance of unfamiliar terminology can be overwhelming. The fear of misunderstanding terms and their implications can contribute to stress during the application process. Conclusion The journey to homeownership should be filled with excitement, anticipation, and the joy of achieving a significant life goal. However, the stress associated with mortgage applications is an unfortunate reality for many. The combination of emotional investment, financial complexity, stringent requirements, and fear of the unknown creates a perfect storm of anxiety. While stress is a natural response, it's crucial for both applicants and the industry to address these concerns. To mitigate the stress of mortgage applications, applicants can seek professional guidance, educate themselves about the process, and prioritise self-care during this time. Working with a financial advisor can help to alleviate many of the points above and offer peace of mind. Ultimately, by acknowledging the sources of stress and working together, we can transform the mortgage application experience into a more manageable and less anxiety-inducing journey toward homeownership. If you need help with a mortgage please get in touch. Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage

The more important a decision is, the more important it is to get it right. For the average person, buying a home, even a starter flat, is a huge financial commitment. This means that although the difference between the right mortgage for you and the wrong mortgage for you may boil down to fine details, details you might not even have noticed on your own, those details can make a significant difference to your overall financial wellbeing. What’s more, mortgages can be highly-detailed products, which means that they can be very complicated. The ”go direct” myth To be fair, there is some truth in the general concept of getting the best price by “going direct” and “cutting out the middle man”. The real problem is that the benefits of it are often massively overstated. In simple terms, “going direct” only has any meaningful advantage when a buyer is totally familiar with the market and knows exactly where to go to get the best deal. Given that everyone has their own unique areas of expertise, there are probably some areas of life where you are fully qualified to “go direct”, but for the average person, finding the right mortgage may not be one of them. Even if you feel confident you understand mortgages in general well enough to understand what sort of product you need, do you really want to spend your own time and energy checking deal after deal to make sure you get the best option? Your time has a value too. A mortgage adviser spends their entire working life dealing with mortgages and therefore can be expected to have a familiarity with them which is way beyond anything non-professionals have the time to achieve. Mortgage brokers will understand the total cost and overall value of a product While headline interest rates are, of course, a key factor in any financial product, they are not necessarily the only important factor you should consider when deciding whether or not to make a purchase. In terms of mortgages, you will also want to look at the length of the mortgage term, administrative fees, early-exit fees and the schedule of charges and penalties (hopefully you will avoid them, but it’s usually preferable to know what they are). That’s all once you’ve decided whether you want a standard repayment mortgage or an offset mortgage and whether you want a variable-interest-rate product or a fixed-interest-rate-product. If you opt for a fixed-interest-rate product, you’ll also need to think about the length of the fix and have a plan in place for what you intend (or at least would like) to do when the fix comes to an end. In addition to helping you with all of this, your mortgage broker may be able to help with all the “extra” bits, like finding a valuer and/or surveyor and a conveyancer. You might also need life insurance and some form of income-protection cover to ensure that your mortgage is paid even if you’re not available to work. Mortgage brokers can help with “offbeat” purchases In the context of mortgages “offbeat” can mean anything from self-build mortgages to mortgages for off-plan property, to mortgages on non-standard property such as wooden homes, to homes which lenders may tend to approach with caution, such as homes above commercial property. It can also mean buyers in unusual situations, such as older buyers or expat buyers and off course they can also help with buy-to-let purchases. Even if, however, none of this applies to you, the sheer breadth of knowledge offered by a mortgage broker can be very useful as you may find that the best deal for you is a niche product you would have been highly unlikely to find on your own. Your property may be repossessed if you do not keep up repayments on your mortgage.

For many people, just being able to start on the home-buying process is a significant milestone. It’s therefore understandable that you’ll want to move as quickly as possible. In some cases, you may also be up against time pressure. Here is a quick guide on how to speed up the home buying process and when you shouldn’t. If you’re selling When you’re in a hurry, maximising speed is more important than getting the highest possible price. This means that you need to be prepared to sell. You also need to prioritise buyers who are clearly in a position to buy. These are typically cash buyers and/or people who’ve already been preapproved for a mortgage. You may find it helpful to work with a real-world estate agent rather than an online one. This is because the real challenge of property sales is often managing them through to completion. Real-world estate agents can be much more hands-on here. If you’re really in a hurry, you might want to consider setting a fixed price for your home. If you are prepared to set it on the lower side, you might attract investment buyers as well as residential ones. Investment buyers tend to be looking for bargains but they also tend to be well-organised and able to move quickly. If you’re buying If you’re buying, try to do as much as you can before you actually make an offer on a property. In particular, sell your home and/or get mortgage preapproval. Also, have a conveyancer lined up. Be prepared for conveyancing There are three key factors that influence how long conveyancing takes. The first is the property (and its location). The second is the seller (and how well organised they are). The third is your conveyancer (and how well organised they are). You can influence all of these factors. If you’re in a hurry to move, look for modern property in low-/no-risk locations (e.g. not in a known flood zone or mining area). Make sure that the sellers are committed before you put in an offer. Have at least one conveyancer in mind. Ideally, have two or three options in case your first choice of conveyancer is unable to take on more business. Look for conveyancers with a track-record of keeping their customers updated. If you’re looking at a new conveyancer, see if they give a service commitment to providing regular updates. This is probably the single most important point for separating the best from the rest. It’s also worth paying for, especially if you’re in a hurry. Remember, no conveyancer can ever tell you in advance how long conveyancing will take. They can only give you a guideline based on the type of property you’re buying and its location. They can, however, commit to keeping you updated and informed about any blocks they're experiencing. You can then decide what action, if any, you are able and willing to take. For example, if the issue is the local authority not responding to a search enquiry, you could try contacting your local councillor. Never leap before you look If conveyancing is taking longer than you’d like then you have two options. The first is to grit your teeth and deal with it. For example, you could find a property to rent until the conveyancing is completed. The second is just to abandon the exercise and move onto another property. Again, this may mean renting until you find another property. Never complete a sale on a property without full sign-off from a conveyancer. Firstly, you are risking the money you spend on the property. Secondly, you are assuming all legal liabilities associated with the property. What’s more, you may not find yourself covered by insurance if the conveyancing was not properly completed. For further advice please get in touch

Insurance is often looked at in negative terms. In fairness, that’s understandable. Fundamentally, insurance will always be something you buy to protect you against the consequences of a negative event that you hope won’t happen. With that said, however, insurance can offer some positive benefits too. Here are some you might not have thought of. Unconventional health benefits You probably already understand that the fewer claims a policyholder makes, the more profit an insurance company makes from them. As a result, people with lower claims rates tend to be accepted as clients more easily and get better rates. You may not have realised that it often makes sense for insurers that offer health cover to encourage their customers to live healthy lifestyles. The way insurers typically do this is by offering health-boosting, value-add benefits with their policies. As business (often corporate) buyers, insurance companies are often able to commit to high-value and/or long-term contracts. This means they generally qualify for rates that would never be offered to individuals. The insurers can then pass on these discounts to their policyholders in the form of value-add benefits. In some cases, the value of these benefits can be enough to justify the policy. Here are some examples of what that could mean in practice. Priority access to GPs and specialists In the UK, it is currently notoriously difficult even to register with a GP. Waiting times for non-emergency appointments can be lengthy, to put it mildly. With health insurance, however, you can often get priority access to GPs. Similarly, if you want access to specialists such as mental-health consultants or nutrition consultants, then you may have to wait a very long time for access on the NHS. With health insurance, by contrast, you can often be seen quickly. Emphasis on prevention The old saying “prevention is better than cure” is arguably at its truest when applied to health. What’s more, it applies to both individuals and insurers. Again, the more people can do to prevent health issues, the less likely they are to need to claim on their insurance. It’s therefore in the insurer’s interests to help them to stay healthy. That means health insurance often comes with benefits that relate to preventative measures such as screenings (physical and/or mental) and help to stay active (e.g. special deals on gym membership). They may also cover alternative therapies and treatments such as massage. Focus on speeding up your recovery Another reality of the NHS is that it has to ration its resources. This means that it typically provides the minimum level of treatment necessary to achieve what it considers to be a desirable result. This may not be the result you want. With health insurance, on the other hand, you have far more chance of getting the treatment you want. You’re also more likely to get those treatments when you want them because you’ll be able to bypass NHS waiting lists. Another point worth noting is that insurers may offer support with non-medical expenses during recovery or rehabilitation. For example, they may cover the cost of hospital parking. This could make it much easier for you to make appointments. Lifestyle benefits Health insurance is very much a product with a serious purpose. Most of the value-add benefits offered by health insurers also have serious purposes. Increasingly, however, insurers are offering more fun benefits to give their services broader appeal. Often these benefits are health-related (e.g. discounts on workout gear) but this is not always the case. Sometimes these benefits are made available to anyone who takes out a policy. At other times, they have to be unlocked through taking action. These actions are likely to be health-related such as taking a certain number of steps in a certain time. For more information, please get in touch

Protecting your family from loss of income should be a priority at any time. It’s especially relevant now. Even single adults should take the prospect of income loss seriously. At this time of life, your expenses may be minimal. They can, however, still mount up quickly, especially if you’re burning through savings. With that in mind, here are some important points for you to consider. Keep on top of your financial situation The fast pace of modern life can make it only too easy to lose track of exactly where you are in it. When it comes to anything relating to finance, this can have serious consequences. That’s why it’s vital to make a point of taking your financial pulse regularly. At a minimum, set aside time once a quarter to go over your financial situation. If you can make time more frequently, you have less to check each time. You’ll also be able to act more quickly if necessary. Keep some cash savings If you’re only without an income for a short time, having cash savings can be enough to see you through. If you’re without an income for a longer period, your cash savings will at least see you through the early days. This can give you breathing space to work on a longer-term solution. Have a contingency plan The essence of security is to try to stop the worst from happening but to be ready for it if it does. This certainly applies to financial security. Insurance is likely to play a key role in your contingency plan. Cover types such as income protection, payment protection and critical illness can all help to protect you from various types of income loss. If you’re employed, you may get some (or all) of these types of insurance from your employer. If you do, then check the terms and the cover thoroughly. You may find that you’d feel more reassured with additional cover that you arrange privately. As a corollary to this, think about how changing jobs could impact your benefits. You will almost certainly need to arrange your own cover for any time between jobs. You may also need private cover during your probation period. Make sure you have all the insurance you need As a rule of thumb, if you have any kind of legal or medical exposure, it’s advisable to have the backing of an insurance company. When times are more challenging, you are likely to struggle more to cope with unexpected expenses. That’s when insurance can really prove its value. Given that changes in circumstances can happen both unexpectedly and quickly, it can make a lot of sense to be fully insured at all times. Prepare yourself to pivot If you lose your income, ideally, you’ll want to replace it as quickly as possible. This is true even if you have insurance. Remember, the less you need to claim on insurance, the more attractive a client you are. One option is to have a side-hustle alongside your regular source of income. If your regular source of income is lost, you can scale up your side hustle. Scaling up an existing business is likely to be much quicker than starting one from scratch. If, however, you don’t want to commit to a side-hustle, you can pursue a hobby and/or studies that you could potentially monetise if necessary. Ideally, these would be in an area that would be likely to be doing well even if your main professional area is stagnant. For more information, please get in touch

Most people need mortgages to buy property. That means the property is only fully theirs once the mortgage is paid off. Until then, paying off that mortgage has to be one of their top priorities. With that in mind, here are some steps you can take to ensure that you can keep paying your mortgage no matter what. Evaluate your risks Probably the most obvious risks to homeowners are illness and unemployment. At present, however, it’s reasonable to add unaffordability to the list. Mortgage lenders do aim only to lend to people who can afford to pay back their loans. The potential snag with this is that interest rates can rise indefinitely. These rises will eventually feed through to the mortgage market and may pose challenges for homeowners. Always have some cash savings Having cash savings makes you less likely to need credit to cope with unexpected life events. The immediate benefit of this is that it saves you from having to pay interest on what you borrow. The longer-term benefit of this is that managing your borrowing helps to keep your credit score in good order. This has obvious benefits when it comes to getting a mortgage at a favourable rate. Make sure you have appropriate insurance cover Essentially the same comments apply to making sure that you have appropriate insurance cover. Additionally, some types of insurance cover can play a vital role in getting you through illness and/or unemployment. The three most relevant types of cover are critical illness, income protection and payment protection. People in employment generally qualify for all three types of cover. In fact, critical illness cover and income protection insurance are commonly offered as employment benefits. With that said, you may find you want to increase the cover you get with your own, private policy. If you're self-employed, you're unlikely to qualify for PPI but you can expect to qualify for critical illness cover and/or income protection insurance. If you have a partner and/or children then it can make sense to have critical illness cover for them too even if they don’t earn an income. Essentially, this is because their illness could lead to unexpected expenses. In the case of a partner, this could be paying someone else to do what they do. In the case of children, this could be paying for home adaptations or hospital visits. Keep your credit score in good order Generally, you can expect to have some form of mortgage for at least two decades. You are, however, very unlikely to have the same mortgage for all of that time. In fact, keeping the same mortgage for all of that time would almost certainly be a horrendous financial move. Mortgages typically have introductory agreements that run for a relatively short period. This is usually one to five years. After this, they switch to the lender’s standard variable rate (SVR). The SVR is essentially the lender’s default terms when no other agreement is in place. Anyone with a mortgage should be clear on the fact that it's vital to have a new deal lined up before your current one ends. The better your credit record is, the easier this will be. (Using a mortgage broker can be useful too). Build up your equity You may not be allowed to make overpayments on your mortgage during the initial term (at least not without a penalty). You can, however, effectively overpay your mortgage when you come to remortgage. In other words, you can inject extra money into your mortgage to reduce the amount you need to borrow. Of course, you can only do this if you have the extra money, so you will need to do what you can to acquire it while you are paying your mortgage. For example, you could start a side-hustle and/or invest. I’m here to help you with any mortgage payment concerns you have, please get in touch. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

You may have realised that your credit score can play an important role in your life. You may not, however, have realised just how important it is. That means you may not appreciate just how much it matters to take good care of it. Even if you do, you may not fully understand what you can do to influence it. Here is a quick guide to help. Why your credit score is important The most obvious reason your credit score matters is so that you can get credit. As a rule of thumb, the more credit you want, the more your credit score matters. For example, getting approved for £500 of credit on a buy-now-pay-later scheme is usually vastly easier than getting approved for a £500K mortgage. What qualifies as credit isn’t necessarily obvious. For example, you may never have thought of paying utility bills as getting credit. If, however, you pay in arrears, that’s exactly what it is. As such, you have to qualify for it. If you don’t, then you will find yourself on a pay-as-you-go tariff. These can be significantly more expensive than paying in arrears. Credit scores can also be used as a useful indication of your ability to manage your money. For example, they are regularly checked by landlords. They can also be checked by employers, particularly for more sensitive roles. Why it matters to take care of your credit score In an ideal world, your credit score would take care of itself. You would simply manage your money responsibly. This would be reflected in your credit score and that would be the end of the matter. Unfortunately, the real world doesn’t work like that. Firstly, it can be easy to make hasty decisions that can have a negative impact on your credit score. It can be even easier to let things happen without thinking. Both are particularly likely when you’re short of time and/or money and generally under pressure. Secondly, even with the best financial skills in the world, mistakes can happen. Sadly, so can deliberate fraud. Both can be put right but it generally takes time and sometimes it takes a lot of it. This means you want to have any issues resolved before they have an impact in the real world (e.g. you get turned down for a mortgage). How to take care of your credit score You actually need to take care of your credit scores. The most important ones are the ones held by Experian and Equifax. There are other credit scoring agencies in the UK but currently, they are relatively niche. Register for their free service so that you can get an overview of your credit scores. This should alert you to any mistakes or fraud. If you spot a mistake, report it to the agency. If you spot fraud, then report it to the agency, the police and any other relevant parties. For example, if you see a loan taken out in your name, report it to the lender. Make all payments in full and on time if you can. If you really can’t, then contact the creditor and make a suitable arrangement with them. This may not completely prevent damage to your credit score but it should limit it. On similar logic, try to avoid getting locked into contracts unless you’re totally sure that you both really need them and that you can fully commit to them. For example, getting a new handset on a contract may be nice. In general, however, it’s more economical to buy a handset and use a SIM-only deal. As a final point, make sure that all your financial paperwork ties up. For example, make sure that everything is in the same name and linked to the same address. If you can, register on the electoral roll at that address. For mortgage advice, please get in touch. Your home may be repossessed if you do not keep up repayments on your mortgage.

When the time comes to remortgage, staying with your current lender may seem like the safe and hassle-free option. It may not, however, be the overall best choice for your financial situation. This article explores the factors to consider when deciding whether to stay with your current lender or explore alternative options, highlighting the potential benefits of shopping around and seeking advice from a mortgage professional. The appeal of staying with your current lender Staying with your current lender when you remortgage can be appealing for several reasons. Firstly, there's a level of familiarity and comfort in continuing with the same lender. You already have an established relationship, and you may have had positive experiences with their customer service and support. Another advantage is the potential for a smoother transition. By staying with your current lender, you can avoid the hassle of switching to a new provider, which involves completing paperwork, providing documentation, and potentially facing additional fees and charges. Additionally, your current lender may offer incentives to encourage you to stay, such as loyalty discounts, reduced fees, or exclusive mortgage products. These benefits can make staying with your lender financially advantageous, especially if they are willing to match or beat competitor offers. Moreover, if your financial situation hasn't significantly changed since you initially obtained your mortgage, your current lender may have a better understanding of your circumstances, making the remortgaging process more straightforward and efficient. The drawbacks of staying with your current lender While staying with your current lender when you remortgage may seem convenient, there are several drawbacks to consider. Firstly, by not exploring other lenders, you may miss out on potentially better mortgage deals from a comprehensive range of lenders across the market. Different lenders offer varying interest rates, terms, and features, and by limiting yourself to your current lender, you may not be getting the most competitive offer. Furthermore, your existing lender may not prioritise existing customers with the same level of incentives and benefits they offer to new customers. Loyalty discounts and exclusive deals are often used as enticements to attract new borrowers rather than reward existing ones. This means you might be missing out on better rates or terms available elsewhere. Another disadvantage is that your circumstances or preferences may have changed since you obtained your original mortgage. Sticking with your current lender may limit your options for customization or flexibility, such as the ability to access additional borrowing, switch to a different mortgage type, or take advantage of new features. The benefits of shopping around Shopping around for a remortgage can offer several benefits that may outweigh the convenience of staying with your current lender. Firstly, shopping around allows you to tap into a wider range of mortgage products and options. Different lenders may offer specialised mortgages tailored to specific needs, such as first-time buyers, self-employed individuals, or those with unique financial circumstances. By expanding your search, you increase the likelihood of finding a suitable mortgage for your requirements. Another advantage is the potential for more favourable incentives and benefits. Lenders often introduce attractive deals, such as cashback offers, reduced fees, or discounted rates, to attract new customers. By exploring different lenders, you can take advantage of these promotional offers, potentially saving money upfront or throughout the mortgage term. In addition, exploring different options and shopping around empowers you to negotiate with your current lender. By presenting alternative offers from other lenders, you can initiate a discussion with your existing lender and request them to match or enhance the terms you have found elsewhere. The role of a mortgage adviser A mortgage adviser can assist in assessing the risks and benefits of staying with your current lender versus switching to a new one. They can negotiate on your behalf, ensuring you secure the most favourable terms and conditions. Their objective advice and personalised approach can save you time, effort, and potentially money, helping you make an informed decision and secure the most suitable mortgage deal. There can be an early repayment charges that you need to consider. For mortgage advice, please get in touch Your home may be repossessed if you do not keep up repayments on your mortgage.

Barring exceptional circumstances, you should definitely aim to have a mortgage in place for when your fixed rate ends. More specifically, you should aim to have the most suitable deal available to you in place for when your fixed rate ends. This may be another fixed-rate deal but it might also mean switching to a variable-rate or “tracker” mortgage. Fixed-rate vs variable-rate mortgages The basic difference between fixed-rate and variable-rate mortgages is fairly evident from the names. For completeness, however, with a fixed-rate mortgage, the interest rate is fixed for the a certain length of time. With a variable-rate mortgage, the interest rate is pegged to the base rate set by the Bank of England. Interest-rate mortgages rise and fall in line with this base rate. This is why they are often called tracker mortgages. Both fixed-rate and variable-rate mortgages are very wide categories of mortgages. There are numerous variations of them. This means that choosing between a fixed-rate and a variable-rate mortgage is only a starting point for finding the right mortgage for you. It is, however, a very important first step. Comparing the pros and cons of fixed-rate and tracker mortgages Here is an overview of the main pros and cons of fixed-rate and tracker mortgages. Advantages of fixed-rate mortgages Stability and predictability: Fixed-rate mortgages offer the certainty of consistent monthly payments as the interest remains the same for a fixed time period, allowing for easier budgeting. Protection against interest rate increases: With a fixed rate, you are shielded from rising interest rates, providing financial security. Peace of mind: Knowing that your mortgage rate won't change offers peace of mind, especially in times of economic uncertainty. Disadvantages of fixed-rate mortgages Limited flexibility: Unlike tracker mortgages, fixed-rate mortgages do not adjust with interest rate changes, meaning you won't benefit if rates drop. Potential higher initial rates: The fact that lenders know they cannot increase their rates for the length of the term can motivate them to play safe and offer higher rates to start with. Advantages of tracker mortgages Potential cost savings: Lenders know they can increase their rate if the Bank of England increases the base rate. This means they don’t have to worry so much about pricing in the possibility of increases in the base rate. Flexibility: Some tracker mortgages offer the flexibility to switch to another deal or lender without incurring early repayment charges. Disadvantages of tracker mortgages Exposure to interest rate fluctuations: Since tracker mortgages are linked to the Bank of England Base Rate, any increase in the rate will lead to higher mortgage payments. Uncertainty in budgeting: The variability of monthly payments with tracker mortgages can make it challenging to plan finances accurately, particularly if rates rise unexpectedly. Factors to consider when choosing a mortgage When choosing between a fixed rate and a tracker mortgage, there are several important factors to consider. Here are the three most important ones. Personal financial situation and long-term plans: Evaluate your income stability and future financial prospects to determine if you can comfortably manage potential interest rate changes. Additionally, consider your long-term goals, such as whether you plan to stay in the property or if you anticipate any major life changes that may impact your mortgage. Attitude towards risk and interest rate fluctuations: If you prefer more stability and predictability, a fixed-rate mortgage might be the better choice for you. By contrast, if you are comfortable with some level of uncertainty and believe that interest rates may decrease in the future, a tracker mortgage could offer potential cost savings. Repayment flexibility and early repayment charges: Determine if you prefer the option to make overpayments or adjust your repayment schedule. Some mortgages offer more flexibility in this regard than others. Additionally, review the terms and conditions of the mortgage offers, specifically regarding any penalties for paying off the mortgage early. How a mortgage broker can help A mortgage broker can guide you through your options to help you decide which type of mortgage is right for you. Once you’ve made your decision, they can help to make it a reality by finding the right loan with the right lender. For mortgage advice, please get in touch Your home may be repossessed if you do not keep up repayments on your mortgage.