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Sheffield Property Rent Home > Useful Resources > Legal & Financial services > Sheffield Independent Financial Advisors (IFA) - Mortgage Advisors & Personal Loans > Ask the Independent Financial Advisor?
Ask the Independent Financial Advisor?I’ve seen a rate at 1.89% surely there’s a catch?Be careful, you’re about to have your pants pulled down!!!. Some lenders will produce a product with a very low initial rate, for example 1.89% for one year that will usually revert to the lenders standard variable rate e.g. 6.5% for the next few years. Should you want to leave during this time, you will then have to pay a redemption charge of around 3% of the total borrowing to move your mortgage to a lower rate. So although it looks good initially, you could end up paying a whole heap more in the end! I have just entered into a business partnership under a Limited Company and have been informed that we should have shareholder protection plans. What are these and why do we need them? Fantastic news! It’s people like yourself which will continue the growth of this fair city. Shareholder protection plans are basically insurance policies taken out to ensure the smooth transition of the shareholding should one of the partners die. Basically each partner takes out a policy against the other partner’s life for the value of their share of the business. If one of them should then die they would use the money from the policy to purchase the deceased’s shareholding from their estate. Thus ensuring that the estate receives a fair amount for the shareholding and also that the business does not suffer unduly. I want to build my own house on some land I have recently acquired. How do I go about raising finance for this? This is a great way to make money on a property if you approach it in the right way, and don’t mind getting your hands dirty. The easiest way to raise finance for a self build is to take out a self build mortgage. This works by releasing funds in stages during the build, usually a portion is released once foundations are laid, then another portion once walls are up and then the final portion once the roof is on. This enables a smooth build process and also eases financial outgoings in the early stages of the development. I became self-employed six months ago. Although my income so far has been very good I am unable to prove it via accounts etc. Is there any way I can remortgage my property? Congratulations, self employment can be very liberating! Some lenders these days are sympathetic to people in your position. Often they will not require you to provide accounts or proof of income providing that the loan is not too high in relation to the property’s value, normally a maximum of 85%. This type of mortgage (known as self certification) is not always the best way to go as they sometimes carry larger fees and/or higher rates, however if you seek out a good advisor (like us here at simplicity – hint, hint!) they will be able to source the most relevant products to suit your circumstances. My daughter wants to buy a property, but cannot seem to get a mortgage due to her income. Is there anything I can do to help? What a generous parent you are. At Simplicity we are all “fairly” young and definitely in favour of parental generosity! There are a couple of ways you could help. First of all you could lend her the money for a larger deposit. This could either be raised from your own personal savings, or by releasing some of the equity in your own property. Alternatively some lenders still allow parents to go onto the mortgage as guarantors. Your income would be included in the calculation and the lender knows that should your daughter fail to keep up repayments on the property they could come to you for repayment. I recently split up from my husband. He has said he is willing to sell me his share of the marital home. What are my options? Sorry to hear that, it must be a difficult time for you at the moment. But you must make sure you can afford the repayments on your sole income, as well as the everyday costs of running the home on your own. The last thing you want after a marriage split is to be struggling for money, or worse still, have your house repossessed. If you feel that this is possible then there is a lender who has recently issued a product specifically for people in your position. As well as providing the funding they can put you in contact with family law practitioners and qualified counsellors should you want them. My son is due to start university soon in another city. I am unhappy about the prospect of paying rent for three years. Is there any way I can purchase a property for him to live in during his time there? The easiest route for you to take would probably be a buy to let mortgage. This would usually entail a minimum deposit of around 15%, which if you don’t have it sitting in your bank, you could possibly release from your home. Once your son has finished university you could then sell the property and take the profits (if any) or keep renting out to new students which would cover your mortgage payments. This is exactly what the parents of the Simplicity Directors did 12 years ago, and they still own the property now! I am looking to buy a property abroad. I currently have a mortgage on my property in the UK, what are my options? First question is why are you buying? Is it to keep as a second home for years to come, or as an investment property which may be sold in the next few years? The answer to this question will influence how you go about purchasing the property. Option 1 is to get a mortgage from a bank in the country you are buying in. This can prove difficult and with some foreign lenders there are certain obstacles which need to be overcome. This said, interest rates in the rest of the world are often lower than ours, and so your payments might be cheaper this way. Option 2, is to raise finance in the UK on your property. The best way to go about this is to contact a financial advisor who specialises in overseas properties and they would be able to guide you through the process. It just so happens that here at Simplicity we do that too, so why not give us a call. I am looking to buy a house which I intend to let out to students. What are the implications of this? A much better rental return is the main attraction to student letting, and students aren’t as badly behaved as everyone will tell you – We were definitely very well behaved!!! Not every lender will let you let your property to students, but there are many lenders who see the lucrative returns that are possible with this form of letting and will be more that willing to lend. As most of us have been students in Sheffield, not only can Simplicity advise you on the best way to finance your property, but we can also give you some advice on the best locations. Please complete the form below with your question, your answer will be posted on this page very soon... |
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