Interview with a Mortgage Advisor - The things you need to know before investing in Property?

Interview with Jon Fry – Independent Financial Adviser, Elite Financial Consulting Ltd, based in Brislington in Bristol, BS4 5NL.?01179 553791.

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Why invest in property?

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Investing in property, or bricks and mortar as a traditional term is used, has always been a good asset to consider as well as other asset classes.

Property values can go up and down, but often property prices have increased dramatically over the last 10 years and certainly since the property crash of 2008.

Property was predicated to fall dramatically this year, but as per the house price index there have been some reductions in overall prices and of course if depends on the area that you buy, but appears we are still seeing some stability in the market.

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Why chose a Mortgage or Financial Adviser?

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All depending on your choice of adviser, although ideally you need someone who is not restricted on some of the main stream lenders and also offers a comprehensive range of mortgages from across the market.?A Financial Adviser can either be restricted (offering products from a restricted range) or Independent being able to look at the whole market of providers and lenders.

We are Elite Financial Consulting Ltd are Independent Financial Advisers and we are directly authorised, we have access to lenders such as HSBC, Bank of Ireland and TSB (as some Mortgage Adviser firms do not have access to these) and we work closely with Mortgage Packagers for certain products that have to be specialist cases, so therefore we have plenty of options when placing cases.?

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Why consider setting up a limited company specialist property vehicle (SPV)?

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The debate on either own ownership or setting up via a ltd company (as they are the applicant, not the individual) so this can be a case of 6 of one and half a dozen of another.

There are many reasons both can be good, although they do have pro’s and con’s.

Individually owned – rental income is received and added to your existing income, easy for self assessment, no personal guarantees required, if there’s a couple the income is split.

Ltd co owned – rental income will be received in a company bank account set up, you can chose when to take the income (tax efficiency) and it will either be as part of a salary or dividend or both, change of directors be done in the future if clients are considering passing on the portfolio to their next of kins, more administrative burden as own self assessment and company self assessments are needed and using the funds built up is beneficial to use towards the deposit for your next buy to let property.?

There are lots of information online on both methods and its worth doing your own research on which one would work better for you.

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What’s the process?

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Once a property has been sourced and your offer accepted, we would book an appointment with the client, talk through their circumstances and preferences on the type of mortgage required.

We get all the clients together including identification documents and check with various lenders on affordability, we make sure the mortgage is affordable for the client and sustainable in the long term and then discuss the products with our clients for agreement to proceed.?Some lenders have minimum income requirements to meet, so we will discuss this with the client.

Depending on the lender it will either be an agreement in principle or via a full application to the lender and if the client is happy to proceed we will submit the mortgage application, and upload the relevant documents to the lender for a decision and valuation, all in all takes around 14 days for it to go to a successful mortgage offer.??The Solicitor will then work on the legal side of the purchase, including ordering searches and carrying out enquiries and this process takes around 6-12 weeks on average until all parties involved can state a completion date.

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Risk warning needed

Your home may be repossessed if you do not keep up repayments on your mortgage. Please ensure that you can afford the repayments before entering into a credit agreement.