Worried young woman checks mortgage payment

In these unprecedented times, there are a lot of questions around what the Government has announced as ‘mortgage relief for homeowners’, writes Lyndsey. Hopefully, the points below will help offer some clarification of the finer details.

Many lenders are now offering support to those who are impacted by Coronavirus by agreeing a mortgage payment holiday for up to three months.

Residential mortgages

Lenders will check if your payments are up to date, you’re not in arrears and can confirm that you’ve been affected – directly or indirectly – by Coronavirus.

Buy to Let (BTL) mortgages

Again, you need your payments up to date and your account to not be in arrears and to be able to confirm that you’ve been affected – directly or indirectly – by Coronavirus. But the big change here is that a payment holiday will only be given if you confirm your tenant is having difficulty in paying their rent due to Coronavirus.

Other things to consider

If you decide to go ahead and request a payment holiday, the maximum time period allowed (under these conditions) is three months. The interest will accrue during the holiday period, and you’ll need to make up deferred payments in the future (this could be at the end of your mortgage term or by making overpayments in the future).

As we are led to believe, this will not affect your credit rating, but please check with your individual lenders.

You may not need to take this option and if you are still able to make payments now. I would continue to do so as you may need this option to be available to you in the future.

Our advisers are all here to advise and help clients through these difficult times as we are still operating at full capacity.

Retiring early doesn't have to be a dream

What do you think of when you hear the word ‘retirement’? Is it relaxing on a sun-kissed beach, cruising around the world or buying a holiday home?

Whatever your goal for retirement is, you’ll never achieve it if you don’t plan.

When people talk about planning their retirement they may think that pensions are the only answer. But that’s not always the case!

Some people may benefit from a pension while others may need to think about other investments to fund their life from the day they retire.

Retiring isn’t the scary step it used to be as long as you have a financial plan. And you really can retire early if it’s planned correctly and you regularly review your finances.

Here we outline some of the considerations to make. But remember, these are just a guide! It’s better to have a face to face meeting with us to share your aspirations. Then we can prepare a plan that’s as individual as you!

What you need to know about retiring?

If you decide to leave your business or give up your work early, then retirement could last for up to 30 years!

stimating the length of your retirement is a little difficult in that you can’t really know how long you have to live. So bear that in mind: will your retirement finances last long enough? If you haven’t made a plan then you really won’t know!

One of your goals may be to make provisions for your family so they receive an income and/or inherit unused money from your pension pot when you die. How will you know that is achievable?

Changes to pension laws 5 years ago mean you can access your pot once you’re 55. But without a plan, how do you know it will last your retirement if you start taking funds from it early?

The first thing we do is to ask you to share your goals, then we can work out what you’ll need financially to achieve it and how to put an action plan in place to make it happen.

What income do you have for your retirement?

Secure income: This includes your state pension, but also any defined benefit pension income and income from any lifetime annuities.

Flexible income: This can be income from savings and investments, renting property you own, paid work or a drawdown scheme, which is where your pension remains invested but you can opt to draw a flexible income from it.

Other assets: There are non-pension assets which could affect what you do with your pension pot, such as your home (downsize), other property you can sell or personal possessions such as antiques.
If you have outstanding loans, a mortgage or credit card debts it makes sense to pay them off to reduce your monthly outgoings. They may also eat into the income you were hoping to receive.

Taxes

One area you mustn’t neglect is taking taxes into account. 75% of your personal pension income is classed like any other income and is subject to tax (although not National Insurance!). For example, your first £12,500 is not taxed but between £12,501-£50,000 your income is taxed at 20%. The other 25% of your personal pension is entirely tax-free.

Again, this is something we take into account when planning your retirement finances, guiding you on what income to draw on and when in order to meet your spending needs.
Inflation

As you’re no doubt aware, prices tend to rise over the years. If your retirement income hasn’t kept up with those increases you may struggle to meet your expenditure.

When we have come across individuals who plan using their own spreadsheets, inflation is generally the one thing they forget to factor in, and yet it can have the biggest impact on their savings over the medium to long term.

What to do next!

If you’re serious about achieving the retirement you dream of, then speaking to us might be your best option. Our guide is a very brief outline so you know some of the basics before we start planning.

When you use Co-Navigate, we aim to hold you accountable. That may sound worrying, but don’t panic: we won’t make you feel bad! Being held accountable and regularly reviewing your finances together is the best way to ensure your goals are achieved.

Why not contact us today and start a conversation?

Coronavirus and the stock market fall

Whether you’re sick of hearing coronavirus (or COVID-19) on the news or trembling with fear and washing your hands 40 times a day, the threat of a global pandemic is very real. 

What that will mean for us in reality we will only know with hindsight. And as I have absolutely no medical training whatsoever, I am not going to speculate.

What you also might have noticed is the current drop in global stock markets, and this might also be making you slightly nervous.

If you’re a client of ours then you should know better than to worry, as we would have told you many times before that the stock market gets nervous when bad news happens. 

Negative news

We will have also told you many times not to watch the news, as it only ever paints a negative picture. The ‘and finally’ segment of positive news at the end of News at 10 disappeared when Trevor McDonald retired.

Why shouldn’t they worry? Because they invest with a plan and they don’t need to access their money for ‘X’ years into the future, that’s why.

And they are also invested in a globally diversified portfolio matched to their personal risk, not the FTSE 100.

And also because the stock market goes up and the stock market goes down. Since 2008 we have pretty much seen investment growth beyond anything you will have seen in your lifetime. 

What we are seeing now is a panic created by an external factor and nobody can predict how it will turn out. In this century alone, however, we have already seen:

  • September 11 attacks in 2001; the London terrorist attacks in 2005
  • The global financial crisis of 2008
  • The European sovereign debt crisis in 2011 (remember Greece being bailed out?)
  • A Chinese stock market crash in 2015 and, dare I say it, Brexit. All external factors that affected the stock markets

I read an article recently which stated:

“Returns are never free. They demand you pay a price, like any other product. And since market returns can be not just great but sensational over time, the fee is high. Declines, crashes, panics, manias, recessions, depressions.”

As far as markets are concerned this will be another dot on an investment chart eventually. My advice is to only worry about things you can change and forget about the things you can’t. In the meantime, ignore the news, wash your hands and follow the advice of the experts!

Jamie Bogle, Financial Planning Director, Co-Navigate

Couple relax after remortgaging with Co-Navigate

Remortgaging is something many homeowners do – but a recent study shows that not enough people who can remortgage take advantage of it.

It may be that they are unaware that they can remortgage or don’t know what it is. Or it may be a task that they have put on the back burner.

Either way, the study found that mortgage borrowers pay £14.5bn a year in unnecessary standard variable rates.

Put simply, if they moved their mortgage to a better deal, they could be paying less and saving more!

But if the thought of remortgaging sounds like too much hassle, then let us explain more about remortgages.

What is remortgaging?

The simple explanation about remortgaging is that it’s when you move to a new mortgage deal with a new lender.

Sometimes people stick with the same mortgage provider and transfer to a new deal – not quite a remortgage but the principle is the same.

Some mortgages can last up to 35 or even 40 years these days, but if you never look at your mortgage deal after the initial rate period you could end up paying more.

Over the lifetime of a mortgage that could be a lot of money. So, if that period has ended, we advise that, just like other areas of your finance, it’s best to review your situation.

We contact our clients at the end of their current deal, but if you’re not a client then we’d advise you review your mortgage deal.

Why would you remortgage?

First of all, while Co-Navigate recommends remortgaging, we don’t recommend it in every case.

Our ethos is in looking at your individual circumstances and needs, and if remortgaging isn’t going to be the best for you, we won’t recommend it.

There are many reasons why someone chooses to remortgage. These can include:

  • Current fixed/variable rate is coming to an endYou want a better rate than you are currently on
  • You want to make overpayments but your current deal issues penalties
  • You want to borrow more money to make improvements
  • You want to switch from interest-only to a repayment mortgage
  • Your home’s value has increased

What to consider

Before deciding to switch to a new mortgage deal, you may want to make some considerations.

Check any fees on a new deal. We would give advice to our clients if the fee was worth paying or not.

Are there an early repayment charges on your current deal? Again, we would know before advising our clients, but if you are looking independently make sure it doesn’t outweigh the benefit of switching.

Is remortgaging for everyone?

Remortgaging may sound perfect for saving money, but that isn’t necessarily always the case. There are a number of reasons why you may not want to remortgage. For example:

  • Your early repayment charge is large
  • Your mortgage debt is small, especially less than £50,000. It may not be worth switching lender simply because you are less likely to make a saving if the fees are high. In fact, some lenders won’t take on mortgages below a certain amount, for example £25,000
  • Your home’s value has dropped
  • You have little equity
  • You’re already on a good rate. You may be already on such a fantastic deal that it’s difficult to beat. Of course, you may need to review it again in the future
  • You have had credit problems since taking out your last mortgage.

As the Money Advice Service shows, remortgaging doesn’t always mean you get a better deal. If the fees that are more than the saving you make, for example, we will advise you.

What should you do?

If the thought of checking out the deals for mortgages leaves you feeling cold, then don’t worry.

You can contact us and let us take a look at whether remortgaging is best for you. We are an independent mortgage broker and have access to deals you may not find online or on the high street.

It’s worth reviewing your mortgage because you could end up saving money.

Your home may be repossessed if you do not keep up repayments on your mortgage.

You may have to pay an early repayment charge to your existing lender if you remortgage

Financial planning makes sense

Planning your finances sounds like such a good idea – and that’s because it is. But many people either never get around to it or fear they don’t earn enough to use a financial adviser.

But, as the saying goes, failing to plan is planning to fail! You’ll never achieve your financial goals if you never take a proper look at your situation.

And you mustn’t keep leaving it until next year or when you get a minute… planning your finances must start now.

It is an ongoing process that needs monitoring if you’re going to get the best out of it.

Ultimately, our process isn’t just about your money – it’s about what you want out of life.

At Co-Navigate, we have helped dozens of people across Newcastle and the North East achieve their dreams through financial planning. We do this by being different.

If you believe that dealing with a financial adviser means you will be bombarded with information and simply sold an ISA or a pension, then think again.

The first thing we do, is listen. What do you want to achieve with your finances? Whatever they are we will show you how to get there.

We will never shy away from giving you an honest appraisal. So if your plans for early retirement mean you need to invest more than you originally thought, we will tell you.

If you decide to go ahead and turn the proposals into reality, we are with you every step of the way.

And here is every step we’ll take…

What happens at your first meeting?

As we’ve already mentioned, we listen to you. What are your plans? Is it to retire early? Do you want to accrue enough cash to buy a holiday home.

Whatever your goals, we need to hear about them. They may seem like nothing but a dream but they can become reality with sensible decision making about your money.

We need to get to know all about you, so that is why we make sure we sit down first to listen to you.

It’s not until we have all the information that we go away to work out your plan.

Don’t worry about being sold a product at your first meeting, we never do that. Our first meeting is about getting to know you and to hear about your goals.

The advice we give is based solely on you and that means we won’t recommend products or investments until we fully understand you and your goals.

Your adviser is someone with almost 20 years in the profession of financial advice, so you know you’re talking to someone with experience.

Your financial plan

After our first meeting, the Co-Navigate team gets to work. We look at your current and future positions and also what-if scenarios.

A complex piece of software that we use then uses this data to calculate how all those issues might affect your goals.

It’s no good planning if you don’t take every eventuality into consideration. Even if the life event is highly unlikely, you must be aware of any issues that could derail your dream.

Once we discuss our findings, we’ll help empower you to see your dreams become reality.

What happens next?

If you have decided to take allow us to navigate you to your financial goal, then we are with you every step of the way.

Financial planning is an ongoing situation. That is why your adviser will build a relationship with you.

We meet you at least once a year to not only review your situation but to hold you accountable.

Don’t worry, we won’t put you on a naughty step or anything like that!

We hold you accountable because your financial goals are so important to us. Consider us to be like a coach, if you’re not held accountable then you won’t make progress.

Contact us

If our personal approach to planning your financial future sounds ideal for you, then get in touch with us today.

Tell us about what you want out of life and we can show you how to get there. There’s no obligation and if nothing else, you’ll have experienced our great coffee!

Model of couple saving pensions for future Newcastle pension adviser

Pensions. Even the mention of the word sends some people drowsy.

But if you think you’ve a good few years to think about putting cash into a pension you may end up missing out later in life.

At Co-Navigate we like to hear about your life plans first and then we can advise you on the best way to get you there.

Whatever advice we may give you, don’t write off a pension before you start planning.

Here, we look at the common reasons that people give for not having a pension.

I want to enjoy my money now

The life expectancy age keeps rising, so you need to consider how you’ll fund your lifestyle when you get older.

It is tempting to say you might be hit by a bus tomorrow, but if that happened you wouldn’t be able to enjoy what’s in your bank either!

But what if you don’t get hit by that bus? A state pension that is diminishing is a good reason for having a private pension in place.

Also, if something were to happen to you, you can pass on the money in a pension to your beneficiaries.

It’s usually treated more kindly by the taxman too, so you know your money can stay with your loved ones.

I’m too young

As soon as you’re working you need to consider a pension. Depending on your age and earnings, you should be automatically opted in to a workplace pension which forces your employer to pay in on your behalf.

But if you are looking far ahead to the future, financial planning is essential and a pension could be part of the answer.

The sooner you start a pension plan the more money you are likely to get back,. Because of the compounded growth someone starting at age 20 could have almost twice the pension than someone starting at 30.

It could also mean you might be able to retire early. If that’s one of your goals then then you might need a financial plan.

I’m too old

Pensions changed massively in 2015. You no longer need to purchase an annuity, and can instead take pension income flexibly. So while you are earning why wouldn’t you benefit from the tax-relief benefits to build your pension fund? The longer you leave it the less you will have!

Pensions are boring

It’s a word that fails to excite. Maybe there needs to be a new word for it!

The truth is your ‘pension’ is money that is being put aside with the aim of offering you a better lifestyle as you get older.

It could also mean you can finish working at an earlier age to pursue your dreams – and that’s not boring!

I don’t want to tie my money up

It is understandable that you don’t want cash locked away so you can’t get to it for a rainy day. But again, that’s the beauty of financial planning and why we do this before we recommend any products.

We’d never suggest you put all your eggs in one basket. We listen to your life goals and can advise a number of ways to reach them and get the most out of your money.

The advantage of pensions is you and your employer can contribute, with both of you able to claim generous tax relief.

So having some money in a pension could be a wise way for you to reach your financial goals.

I’m self-employed

A pension is probably even more important, as you don’t have the advantage of your employer paying in to one for you.
While you won’t benefit from employer contributions you still get tax relief when saving into a pension scheme.

If you own a limited company you could choose to make employer contributions and help reduce your corporation tax bill.

I move jobs regularly

You may think that by moving jobs often means that you won’t save enough to make it worthwhile. You may also be concerned that fees could eat into your pension pot.

One way of overcoming this is to consolidate your pensions into a single plan.

If you have saved into different pensions, we will be able to look at what you have and give the best advice depending on individual cases.

Pensions really don’t have to be boring and as part of a financial plan it can be interesting to check if you’re on track to reach your retirement goals. Our advice is to keep an open mind until we have chance to listen to you.

For a no-obligation chat to see how we can help you, contact us today. We’re based in Newcastle but give pensions and financial planning advice across the North East.

Couple celebrate after gaining first time buyer mortgage

First-time buyers are understandably nervous when it comes to buying their first home. There is so much information out there and there are a lot of steps involved.

Your home is the likely to be the most expensive purchase you’ll ever make, so having a checklist really helps.

At Co-Navigate, we’ve been helping first-time buyers in Newcastle and beyond with mortgages for years.

So here is our advice:

Can you afford it?

Before you think any further about buying a house, you have to check out your budget. Can you afford a home?
There are many occasions where your monthly mortgage payment may be cheaper than your monthly rent payments. This means buying is often a better prospect because you will, one day, own the property.
But remember, when you’re buying a property, you’re also responsible for every bill. That includes building repairs, decoration, gardens and any associated costs, such as management company bills if you’re living in an apartment.
The best way to work out if you can afford a mortgage (or if you need to know when you’ll reach that point) is to speak to an expert. This is where Co-Navigate can help.
There are free calculators available online and this one from The Money Advice Service is very useful. But whilst it gives you an idea of affordability it doesn’t give you the full picture. Sitting with Lyndsey at Co-Navigate, you can discuss your options that will really help you to find a mortgage to suit your needs.

A deposit

Saving for a deposit is essential. You cannot get a mortgage without a deposit.
Why do you need a deposit? Well, lenders don’t want to take all the responsibility for the purchase, so you need to show you are serious and prepared to take a risk with your money too.
If you’re in the early stages of considering buying your own home, start saving now. Housing charity Shelter says it can take young families 12 years to save for a deposit of 20%.

Your mortgage

It’s a word you’ll have heard but what is a mortgage?
It is, quite simply, a loan from a specialist mortgage provider that you pay back over a number of years. The actual number of years varies massively from person to person and no one solution fits all.
Like any loan, there is interest to pay as well as the sum that you borrowed.
Remember that you must pay what you owe as your home could be at risk if you fail to do so. Failure to pay means the mortgage provider can and will take your home from you!
So where can you find a mortgage? You could try a bank or building society, but they’ll only offer you their own products and limited advice, or you could try an independent mortgage broker, like Co-Navigate. We are based in Newcastle but we have clients with mortgages from across the North East and the whole of the UK.
Why choose an independent mortgage broker? We can access mortgage deals from across the whole of the market whereas a bank or building society can only offer you their own products.
Not only do we have access to more deals, we often have exclusive mortgages that you won’t find on any comparison sites or from banks and building societies direct.
But more importantly you’ll have someone to hold your hand through the whole process. Someone who deals with mortgages day in and day out – an expert in their field.

Remember all your costs

We will look at buying a home and whether to choose new-build or pre-loved homes in a future blog, but the next point to remember is your costs.
Buying a house involves getting a number of professionals involved and they need to be paid.
For example, you will need a solicitor to carry out many of the legal aspects, including ‘conveyancing searches’. House sales website Zoopla explains what searches are here.
As well as the solicitor’s fee, there will be fees for those searches.
And we also advise looking at options around which survey needs to be completed. A Homebuyers Report, which can highlight any structural issues can often be useful. If there is anything seriously wrong, you can renegotiate the price and/or request issues are rectified before you complete. There are different types of survey report so make sure you find out more.
Many mortgage providers will offer a basic free valuation, but some will charge for this and can cost around £100-£400.
Stamp Duty is an often forgotten about tax which can significantly add to your purchase costs, especially if you already own another property. You can work out how much stamp duty will be here.
As you can see, fees can add up even before you complete on your home and you need to make sure you have the funds available.

What to do next?

Whether you’ve seen your first home or are just thinking about buying, why not contact Lyndsey today for a free no-obligation meeting to see how close you are to finding your first home.

Your home is at risk if you don’t keep up repayments on your mortgage.

Using software for financial planning