Sophie had already been in touch with a broker and had been given an illustration for a second charge mortgage product. As she knew one of Maxwell Moore's advisors, she asked if we would take a look at whether it was a good deal.
As well as reviewing the illustration, we asked Sophie for some additional information to check that a second charge mortgage was the right solution for her. As it turns out it was. Sophie had been busy doing home improvements and was looking to consolidate a number of loan and credit card debts into a single, more manageable, payment. A first charge remortgage and further advance weren't possible at the time due to Sophie's circumstances; she was still in the pre-emption period having bought her house under the right to buy scheme.
The illustration Sophie had was for a 2 year fixed rate deal at 6.5% with a lender fee of £495 and a broker fee of £1413. All fees would be added to the loan. Maxwell Moore's broker fee at the time of this case was £350, so this would already be a saving.
Sophie's first charge mortgage deal only had about fourteen months remaining. This would mean the proposed second charge mortgage would run for ten months before she could repay it without incurring an early repayment charge (ERC). Consequently she'd pay an increased rate on her first charge mortgage until she could consolidate both with a remortgage. Maxwell Moore felt that a second charge mortgage with no ERC, or a maximum of twelve months ERC would be more appropriate. This would allow both debts to be consolidated with a first charge remortgage in fourteen months time.
Based on Sophie's credit history, we felt she should qualify for a more competitive interest rate than the 6.5% product she had been recommended. We were able to confirm that she'd qualify for a one year discount rate product at 3.75%, rising to 5.03%. We discussed the pros and cons of a variable rate product for the timescale that Sophie was likely to have this mortgage. Given the much lower rate, Sophie was happy to choose a variable rate.
As a lower interest rate product was available, Sophie decided to increase the amount she would borrow to ensure that she could pay off all existing debts, and have some money left to finish the last few home improvements she wanted to do.
Sophie's second charge mortgage recently completed and she has cleared all her debts. Maxwell Moore was able to get her a deal that resulted in a lower monthly payment (despite increased borrowing) and with lower fees. Assuming the second charge is paid off in fourteen months when the remortgage is done, the new deal will have saved Sophie £855 in interest and fees compared to the illustration she originally had.
We believe in putting the interests of our clients first and foremost. We can't promise we will always be able to find you a better deal but we are happy to try. If you have a great deal, we'll tell you; if there is possibly a better deal for you then we'd be happy to work with you to achieve this.
For all your mortgage needs, feel free to get in touch and see how we can help. Call us today on 0330 122 7887 for a no obligation free initial consultation.