When we are looking for a mortgage, the main things we usually look for are the interest rate, how long the interest rate will remain as it is, and how much we have to pay in setup fees. These aren’t the only things that are worth considering when you are shopping around for the best deal, perhaps paying a few extra pounds a month could allow you to have a mortgage that is better tailored to suit your needs, and allows you the flexibility to better manage your finances.
During the world cup, each manager doesn’t put his best eleven men on the field every time, he will choose the players that give his team the best mix and the options he requires for each game his team plays. Then when he’s deciding who to bring on from the bench, he needs to have the flexibility to change a game in his favour, should he need to look at the situation differently. Because, like a football game, we don’t know what is going to happen during our mortgage term, it can be very useful to have options and flexibility which allow us to adapt to our ever changing needs.
There are many different features that a mortgage can have which can suit each of us. Perhaps a mortgage would suit you which allows you to make overpayments of upto 10% or even unlimited over payments without having to incur penalties (and when the world cup is on, England more than anyone, hate the word penalties). Often you will find that if you have made overpayments to your mortgage, your lender will allow you to make underpayments of the same amount, which could come in handy if you need some extra cash at Christmas or to take away for your holidays.
With variable rate mortgages available at much lower rates than fixed rate mortgages at the moment, a lot of people have opted to take out a variable rate mortgage, even though ideally they would like the security of having fixed payments. You can get a mortgage which will allow you to benefit from the lower payments that variable rate mortgages offer, then when you feel that interest rates are going to start rising, have the facility to switch to a fixed rate. The fixed rate you can switch to will be dependent on the interest rates that are available at that time, but if you want to be able to guarantee your payments but can’t quite bring yourself to pay the higher rates at the moment, this may be an option worth considering. You will see a similar approach during the world cup, where teams will play to score goals, then when they feel the time is right bring on a defender to try and maintain the scoreline.
Even if you already have a mortgage in place, you may want to revisit the terms and conditions from time to time to see if there are any options that you can take advantage of. When you took out your mortgage, you may not have found a use for the features that are available, but a few years down the line, you may be able to start utilising these features, just like a football manager will review his tactics from time to time.
Because we’re all individuals with individual needs, it is vitally important that you contact and Independent Financial Advisor (IFA) so that they can tailor a recommendation to suit you. Kieron Bassett Financial Services are an Independent Financial Advisers and we are open six days a week. Contact the office on (01524) 832057 or via e-mail info@kieronbassett.com to arrange an appointment.
Jason Hinde CertPFS
14th June 2010
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