Sarah Pennells is a personal finance journalist and the face behind SavvyWoman.co.uk. We think she does a great job at explaining financial subjects in a very clear and accessible manner. You can find her column below where she writes about the latest financial news, and helps you get more from your money.
Bargain basement mortgages
There’s something of a mortgage price war at the moment. Mortgage lenders are cutting rates on fixed and discount rate deals, so if you’re looking for a new mortgage deal, now could be a good time to get one.
How low will they go? Well, it’s hard to say (I wish I knew!) What is true is that anyone with a deposit or equity of 35% of the property’s value or above could switch to a deal charging less than 1% for two years (as I write this). The most competitive deals don’t tend to hang around for long, but the signs are that more mortgage lenders are coming out with lower price deals or are considering cutting rates.
If you want to get the best mortgage deal, here’s what you need to know:
- The headline interest rate is important (of course), but booking fees and charges, the level of any early repayment charges and the type of deal it is are also vital. One of the most competitive deals launched in the last couple of weeks and pulled a few days later (1.29% for five years), was a fixed rate, while another currently on offer (0.89% for two years) is a discount rate deal. They may look similar, but if interest rates – and mortgage rates – rise, the 0.89% interest rate could rise as well, whereas the fixed rate deal cannot rise until the five year term is up.
- Make sure your bank account is in good shape before you apply for a mortgage. These days mortgage lenders don’t just look at how much you earn before working out whether or not to lend to you, but what you spend as well. You are normally asked to provide the last three months’ bank statements. If you’re overdrawn, and especially if the amount you’re overdrawn by rises every month, the lender may ask questions.
- Search for deals online, but consider using a broker as well. It’s easy to get a sense of what’s available by looking at mortgage brokers’ websites and price comparison sites. But if you’re a first time buyer or you’re self employed or you’re on a zero hours contract, I’d definitely recommend talking to an independent mortgage broker. Some charge a fee and some just take a payment from the mortgage lender for their time.
- Check your credit report. Mortgage lenders will look at your credit file, so make sure you’ve seen a copy of your credit report before you apply for your mortgage. It’s important, no matter how much you’re borrowing, but it’s particularly important if you’re borrowing more than 75% of the property’s value. That’s because this level of mortgage is riskier for the mortgage lender, so it will scrutinise your application (and you!) much more closely.
New house building broadband problems
Research by one broadband comparison site found that people moving into new-build properties were twice as likely to have to wait for at least a month to get a broadband connection as those moving into a second-hand property.
It also found that only one out of the 20 housebuilders it contacted said that high-speed fibre broadband was available in all their newly built properties.
Only a quarter of people moving into a new build were likely to be told the broadband speed they’d get by the seller. Over a third (37%) found out for themselves and the rest didn’t check or didn’t think they needed to find out.
SAVVY TIP: You can check broadband speeds in your area and which companies you can choose from, either by going onto a price comparison site or – if you’re thinking of moving – on a property listings website.
Buying a used car? Check MOTs online
If you’re buying a second-hand car, did you know that you can find out quite a lot about its history online? If you go to the Gov.uk website and you have the car’s make and number plate, you can find out if it’s taxed, when its MOT expires, when it was manufactured and first registered, its colour (which may not be the colour it is now!) and its road tax band. All the information is free.
This week the Driver and Vehicle Standards Agency (DVSA) urged motorists to check a car’s MOT online before buying, rather than relying on the paper MOT certificate, as they can be easily forged.
SAVVY TIP: Did you know you can also check the MOT history of a car before you buy it at check-mot.service.gov.uk. I used this before I bought my last car and it was really useful. Not only can you find out whether it’s passed or failed its MOTs, but whether there were any advisory items (namely, things that should be put right in the near future).
Calls for a dress code law scrapped
The government has rejected calls for a new law on workplace dress codes. Earlier this year, Nicola Thorp set up a petition calling for a ban on employers forcing workers to wear high heels, after she was sent home from work for wearing flat shoes. The petition got over 150,000 signatures and was debated in parliament.
MPs said they were shocked by some of the stories they’d heard about high heels and other dress code issues – one woman said she’d been told by her employer that she had to dye her hair blonde. But the government has decided against further legislation for now.
Tax changes scrapped
The snap election on June 8th means that some tax changes announced in the Budget in March won’t now go ahead. Making tax digital, which would have seen millions of businesses and self-employed people filing quarterly ‘mini returns’ to HM Revenue and Customs, won’t now go ahead.
And plans to reduce the amount of dividend income you could take tax free, from £5,000 a year to £2,000 a year from next April, have also been shelved.