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Is this you? Mortgage case studies

Case Study 1: First Time Buyer Client

Meet John, a 28-year-old working professional who has just landed his dream job in Bedford. He has been renting a flat for the past five years and is ready to step on the property ladder. John has saved £25,000 and has a good credit score. He is looking for a mortgage to purchase a two-bedroom flat in Bedford, which is priced at £198,000.

Solution

As a first-time buyer, John can take out a 5-year fixed-rate mortgage at a rate of 4.43% with a deposit of £25,000. This means he will need to borrow £173,000.

With a term of 25 years, John will have to pay £948.54 per month for the next 25 years, bringing the total repayment to £284,562. However, after deducting the deposit, John will only need to pay £259,562 for the property.

Case Study 2: Remortgage

Meet Sarah, a 35-year-old mother of two who purchased a three-bedroom semi-detached house in Bristol five years ago. Her mortgage term is coming to an end, and she is looking to remortgage her property to get a new deal.

Solution

Sarah has a remaining mortgage balance of £120,000, and the current interest rates are higher than they were five years ago. So, she is looking for a new deal that remains affordable. Sarah was on a 2.6% interest rate but after shopping around the most suitable deal she can find has come out at 5.8% interest. This is quite a significant jump. Sarah decides to speak to a mortgage adviser who is able to access the whole market to see if they can help find something more suitable. the adviser finds her a new deal at 5.14%.

Sarah’s repayments were £642 a month when she was on a 2.6% interest rate. The 5.8% interest rate Sarah has found would mean repayments of £846 a month, which Sarah has expressed to her adviser is unaffordable. Despite the adviser finding a rate of 5.14% it still means Sarah would be looking at £801 a month. The adviser and Sarah discuss her needs and agree a term extension from 20 years to 25 years would be the most suitable option. The adviser secures the deal and £711 a month repayment which despite being an increase for Sarah, remains affordable.

Case Study 3: Buy-to-Let

Meet James, a 42-year-old property investor who owns three rental properties in Manchester. He is looking to purchase a fourth property to expand his portfolio.

Solution

James is looking to purchase a two-bedroom flat in the city centre for £200,000. He plans to rent it out for £1,000 per month, generating an annual income of £12,000.

After consulting with a mortgage adviser, James decides to take out a buy-to-let mortgage with a 25% deposit. He chooses a five-year fixed-rate mortgage at 5.8% interest, which means he will have to pay £713.22 per month for the next five years. After five years, James plans to sell the property, and the anticipated sale price is £240,000.

With his rental income and anticipated capital gain, James expects to make a profit of £58,732 over five years.

Are any of these you? Or someone you love? We can help you to find the most suitable deal for your needs and explore the market to help you secure a rate that’s right for you.

SPEAK TO AN ADVISER

Your home or property may be repossessed if you do not keep up repayments on your mortgage. You may be charged a fee for mortgage advice.

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Fairview Financial Ltd is an appointed representative of The Right Mortgage Limited, which is authorised and regulated by the Financial Conduct Authority. Fairview Financial Ltd is registered in England and Wales no: 10912424. Registered office: 107 Promenade, Cheltenham, GL50 1NW.

The guidance and/or advice contained within this website is subject to the UK regulatory regime and is therefore targeted at consumers based in the UK.

@ 2020 by Fairview Financial

Our Fees        

A fee may be charged for mortgage advice. The exact amount will depend on your circumstances.

Our standard fee for mortgages is £395 and this is paid when the mortgage is offered. We charge a fee of £295 First-Time Buyers. Other fees may apply depending on the complexity of the work involved or loan amount. The maximum fee we can charge is £795.

Our standard fee for Equity Release is £895 and this is paid on completion.

We also receive a commission from the lender that will vary depending on the lender, product or other permissible factors. The nature of any commission model will be confirmed to you before you proceed. If we receive a commission, this will not affect the cost payable by you.

THINK CAREFULLY ABOUT SECURING OTHER DEBTS AGAINST YOUR HOME.

YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBTS SECURED ON IT.

BUY TO LET MORTGAGES ARE NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.

EQUITY RELEASE: THIS IS A LIFETIME MORTGAGE. TO UNDERSTAND THE FEATURES AND RISKS, PLEASE ASK FOR A PERSONALISED ILLUSTRATION. CHECK THAT THIS MORTGAGE WILL MEET YOUR NEEDS IF YOU WANT TO MOVE OR SELL YOUR HOME OR YOU WANT YOUR FAMILY TO INHERIT IT. IF YOU ARE IN ANY DOUBT, SEEK INDEPENDENT ADVICE.


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