Case Studies 3
Mel and Shelly wish to buy a property. Mel is a stand-up comedian and earns £45,000 per annum. She expects to ear this amount but is concerned if she cannot meet her mortgage payment if her wage slips. Shelly works in an office and earns £27,000 a years. They have joint savings of £25,000.
Solution
Halifax, for example, has a tracker rate at 4.49, which has total fees of £3,500, mostly mad up of the HLC. Woolwich has a tracker at 4.79% with total fees of £835.
It is only a £34pm difference, but the Woolwich offers a better deal.
To protect against rate rise, they should take a fixed rate mortgage. Nationwide has a decent fixed rate for two years at 5.28%. Again, no HLC is payable.
If Mel is uncertain she is able to maintain her salary, it sounds as if she is self-employed. She should make sure she has an income protection policy to protect hr should she be unable to work due to ill health or an accident. Shelly could protect against unforeseen redundancy.
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 overall cost for comparison is 7.1% APR. The actual rate available will depend upon your circumstances. Ask for a personalised illustration. There may be a fee for the mortgage advice. The precise amount will depend on your circumstances, but we estimate it will be 1.5% of the loan amount with a minimum fee of £500 added on to the loan.
Mayfair Consulting Limited is an Appointed Representative of The Mortgage Times Group Limited, 279 Tottenham Court Road, London , W1T 7RJ , which is authorised and regulated by the Financial Services Authority no. 303007.
