Happy New Year to you! Fingers crossed it will be a peaceful, happy, healthy and wealthy one for us all!
I’ve not made any personal resolutions, but I did take time out to review all of the paperwork that’s been cluttering the kitchen for a while! Life insurance, car and home insurance and even my mortgage was in the spotlight! It was a worthwhile few hours and it usually saves money… Start the New Year off with a review of your biggest outlay – the mortgage! Even though we’re still early in the year, a number of lenders have already cut their rates and now could be a beneficial time to have a chat and review opportunities available to you.
If you are against the idea of moving, but would like to increase the space available to you by way of an extension, or loft conversion, lenders may look to assist in the form of a second charge loan. Many lenders realise that consumers needs large sums to complete certain types of work on their home and will secure the loan against the value of the property. This is up to a certain loan to value, normally 85% maximum. Term and rates depend on the loan required but can be short to medium term, or longer if required and loan sizes can go up to £200k. The second charge also allows you to keep your current mortgage and rate untouched, good in the current climate if you have a low tracker rate.
Finally, if you are on an interest only loan, be prepared to hear from your lender shortly (if you haven’t already). With many lenders withdrawing from interest only towards the end of 2012, those who have customers on interest only options will be looking to review how that customer will repay the loan back and may require proof. I suspect this will be of high priority for 2013 for many lenders. If you don’t have a repayment plan in place (usually these were endowments, ISA’s or future bonus/lump sum pay out), you will need to review how the lender will get their money back. Selling your home is no longer a generally approved repayment option, so be aware and seek professional advice if this affects you.