Lack of fee transparency for banks selling mortgages...

The lack of transparency in the mortgage industry has been somewhat of a bugbear for Enable Independent, unlike banks we keep all of our fees transparent, whereas if you go to a bank they hide their fees within a mortgage package.


Mortgage brokers by law have to disclose their charges up front, where as banks do not have to, which often gives the impression that banks’ mortgage services are free. Banks also receive incentives to sell mortgages to customers, and unlike independent advisors such as Enable Independent they are stuck with the mortgage products from their particular bank, which might not be the best for your needs. Whereas an IFA can access all of the mortgage products available on the market, making sure the mortgage fits your needs and not the other way around.

However this might all change in the future as the newly elected Lib Dem MP for Eastleigh and former mortgage broker Mike Thornton, they want banks to be made to be more transparent with their charges, which at the moment is obscured within the mortgage rate, staff salary or bonus.

LSL Property Services mortgages director David Copland says: “It is a problem that has always been prevalent in the market. Bank advisers do not show the cost of the advice through the salary or sales incentives loaded on.

“I wish it would change but it is not going to happen because it is too difficult for banks to work out their costs and say this is what we are paying the adviser for the mortgage.”

Until some real legislation comes into place it looks as though banks will get away with hiding their fees within their mortgage products. At the moment inexperienced bank staff can sell mortgages, where as an Independent Mortgage broker has to have several qualifications, and they normally have years of experience within the industry.

If you would like speak to a mortgage broker with years of experience why not come and speak to Richard at Enable, all of our fees are transparent and you will be talking to an experienced mortgage broker not a glorified sales man, and he will be able to give you a choice of mortgage products from across the market place.

In respect of residential mortgage advice Enable Independent charges a fee of 0.35% of the loan amount subject to a minimum of £500. Any payment we receive from the lender is offset against the fee charged by us. Therefore, for a loan amount of £150,000 our fee would be £525 less anything received from the lender. By charging for our services we are able to provide you with details of all lenders, including those who do not pay fees to advisers. For equity release mortgage advice we charge a fee of 1.00% of the loan amount subject to a minimum fee of £800. For adverse credit mortgage advice we charge a fee of 1.00% of the loan amount subject to a minimum fee of £800.

The Financial Conduct Authority (FCA) does not regulate some forms of buy to let mortgage.

Income gap between poorest and richest at all time low…

Enable Independent were interested to see that the income gap between the poorest and the richest in the UK is at its lowest for 26 years, this new data comes at the same time that Londoners also have the lowest disposable income.

These new stats come from the ONS (The Office for National Statistics) that say that indirect taxes such as VAT on goods and fuel duty have decreased the income equality.  The new statistics reveal that the fifth poorest households in the UK spend nearly a third of their income on indirect taxes such as VAT, alcohol and fuel duty between 2011 and 2012.

The ONS have statistics have also revealed that by increasing the rate of VAT from 17.5% to 20% in 2011 has increased the amount of indirect tax paid by the lowest earners to up to £3,400 per year, which is £29% of their disposable money.

The richest people in the country, the top fifth of households, paid just over half as much, an average of £8,700 per year, which is 14% of their disposable income. Resulting in the increase of inequality of income.

Unsurprisingly the general view of the Unions in the UK is that rather than the Government increasing the lower-rate tax limit to £10,000 in the UK, that it should reduce the amount of VAT instead.

The TUC's general secretary, Frances O'Grady, stated: "Low-income families will gain virtually nothing from the increase in the personal allowance, but will continue to lose significantly from the rise in VAT.

"Contrary to what ministers claim, the government's tax policies are having a negative impact on the poorest households."

If you like many other Britons have experienced tougher times due to the reduction of your disposable income, then why not come and see our team of IFAs we will be able to review your current financial situation, giving you practical, straight-forward advice on ways in which you could improve your situation.  

Feed up with low returns on your savings?

Enable Independent Financial Advisors in Bishop’s Stortford have been helping individuals over the past few years to find ways in which to increase the return on their savings, as interest rates have remained at a historical low. Which has been good for homebuyers but not so good for savers, and people relying on returns on their investments.

However just recently we have seen the first increase in saving rates for more than a year, with the launch of the two best-buy accounts from one UK building society and one UK bank.

Kent Reliance building society is one of the companies increasing its rates for savers, on its one and two-year fix rate saver accounts, the interest rates on these accounts will increase from 2.05% to 2.35% respectively, pushing these accounts into the top of the best-buy tables. The minimum deposit for these accounts is £1,000.

John Eastgate of Kent Reliance said: "Savers are having a tough time finding value for their savings, and with economic uncertainty they may not want to lock their money away for a long period of time."

Halifax has also upped rates for savers on its Fixed Saver and Fixed Online Saver accounts by 0.45%. Giving a return of 2.1% over two years and 2.25% return over three years, 2.3% for four years, and 2.35% for five years.

This news is very promising for savers, as it looks as though other large banks and building societies will be forced to follow suite in the near future.

If you would like some advice on how to get the best returns on your savings, why not give our team of Independent Financial Advisors a call today on 01279 755950.

Have you been mis-sold an interest-rate swap agreement?

Enable Independent have seen many business owners who have been victims of being mis-sold financial products by banks, and we can understand that for some this can in the worse case scenario be financial ruin for some businesses.

BBC documentary highlighted the problem of interest-rate swap arrangement, which has caused many to pay over the odds when the government slashed interest rates to stimulate the UK’s economy.

Terry and Stewart Flett, were one of the couples that felt as though they had been almost bullied by their bank into taking out an interest-rate swap arrangement, when they took out a large mortgage to pay for a hotel business.

They had paid out over £350,00 on top of their mortgage payments, under this agreement. An interest-rate swap arrangement is a very complicated financial product and the Fletts felt as though they did not know that if interest rates dropped they would have to pay a fortune back in interest each month. They were paying about £6,500 on top of their mortgage for their hotel business in Bournemouth.
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Terry Flett told the BBC: "If I'd have known that our business, our home, our marriage was at risk, I just wouldn't sign it and nor would any other small business."

Her husband added: "We didn't really understand what were getting in to - we assumed it would be good for us because the bank told us.” Eventually, after years of stress, the bank apologised and refunded them the £347,871.

In February this year the FSA, Financial Service Authority said that 90% of the interest swap deals it looked at had been mis-sold. The FSA says 28,000 of these products were sold by four banks - Barclays, HSBC, Lloyds and RBS - and it has been working with 100 businesses as it spent the last two months looking into the affair.

Trust in banks continues to be at an all time low. If you have signed up for some financial products that you do not understand, then why not give Enable Independent a call we pride ourselves in giving straight-forward independent advice to our customers. 

Issued by: Enable Independent Financial Life Planners
 25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE. 

Do you have an interest only mortgage?

At Enable Independent we understand some of the issues behind individuals buying homes with an interest-only mortgage. An interest only mortgage offers a much lower rate of mortgage, as typically they only pay the interest and not the capital amount borrowed.

Mortgage lenders have long dismissed any talk of growing problems facing borrowers with an interest only mortgage, but more and more people who have signed up to these types of mortgages are going to find it harder to pay back the money they have borrowed on their loans, when low performing endowment policies just don’t make up the difference at the end of a mortgage term. 

Interest-only mortgages can offer a solution if they are used efficiently, backed up by  a solid repayment plan. However banks in the past have sold interest only mortgages with people who couldn’t afford to pay it back, and this coupled with the failure of the endowment industry have left many homeowners without enough funds to pay off their home.

There seems to be a looming squeeze on people approaching retirement – this has been caused by a lack of financial planning concerning pension planning and mortgage planning. People who have trusted banks to give them the best advice for their futures, didn’t realise until recently they were only driven by their sales target.

The generation who took equity out on their homes in the boom years, and then spent the money of their lifestyles without properly preparing for their interest only loans to expire. The only saving grace will be that property rises are looking to rise again, so they could have the possibility of down-sizing to pay off their loans.

If you are stuck with a interest-only mortgage and feel as though you would like some independent, plain, honest advice on how to implement a plan to pay off the capital on your home, then why not give one of our independent advisors a call.

Issued by: Enable Independent Financial Life Planners
 25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE. 

House prices rise at fastest yearly rate since September 2010...

House prices rose at their fastest rate in June for almost three years according to the latest price index by Nationwide Building society.  UK house prices rose from 1.9% year on year to £168.941 from £165,738 a year ago.

The strongest performing regions are the South of England, especially London. Demand for homes in the UK has been due to the modest growth in employment and the reduction of the cost of credit due to Government schemes such as Funding for Lending.

Properties in the South East experienced a 2% annual growth, from £197, 564 in the first part of 2012 to £202,312 a year later. London prices outperformed anywhere else in the UK, with a rise of 5.2% year-on-year, from £302,399 in the second quarter of 2012 compared to £318,214 this year, which is 3.5% faster than anywhere else in the UK.

Wales has also seen some recovery in the property market recently, although more modest than London, prices in Q2 of last year compared to this year have risen from £136,182 to £134,432, however Northern Ireland prices have fallen by 2% from £110,422 to £108,116.

House prices in England have still not reached their pre-crises level, remaining at 5% lower than their peak in 2007, with them being 13% lower in Wales, 12% lower in Scotland and 53% lower than in Northern Ireland.

If you are looking to buy a house, then why not contact Enable Independent, our mortgage advisors will be able to find a mortgage which best suits your own individual needs.

Issued by: Enable Independent Financial Life Planners
 25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE.