Monthly Archives: August 2015

Financing property purchases

DSC_7820X-PETER ZTPeter Tsouroulla explains the ins and outs of mortgages when your family circumstances are changing.

Now the dust has settled from the general election, the Bank of England has started warning of interest rate rises soon to come. Although it seems inevitable that rates will start to go up, in my opinion this is likely to happen in closer to twelve months from now than six. This is the busiest period in the London housing market I’ve seen for some time: as if the election delayed the usual springtime property market and pushed it all towards the autumn instead. I’m dealing with lots of people buying property, and even more remortgaging to take advantage of some attractive offers from lenders while interest rates remain at this historic low. As it’s a speciality of mine, I’m also seeing lots of clients going through divorce and looking into their options for financing the plans they need to make for separate future lives.

For those currently looking to raise mortgages to assist with the purchase of property on divorce, there are some good mortgage products around. There are some good fixed rate offers that offer certainty and predictability of expense, although for these you trade flexibility. As ever, a good mortgage depends on your particular circumstances and for such a significant purchase it really is worth taking individual advice about what might work best for you. However, there are some general principles that might help while you’re trying to get a preliminary picture of your options.

For those who are employed, it’s seldom difficult to find a good mortgage deal at the moment. Even if your personal circumstances are changing, your payslips can evidence affordability and confirm your regular income, which is just what the lenders want to see. At the moment it’s possible to find lenders who will lend up to 4 or 5 times your annual salary, and interest rates are attractive – of course, it’s important always to bear in mind that they will not remain this low forever, and plan accordingly.

If you’re self-employed, you may well find that there is a conflict between evidencing the affordability of a mortgage to a lender, and ensuring you keep enough money in your business to guard against future uncertainty. It is an unfortunate fact that mortgage lending has become more restricted for the self-employed, but a good broker should be able to introduce you to the right lenders and help you prepare the evidence that you’ll need. If you’re self-employed it is by no means as difficult to get a mortgage as some sectors of the media would have you believe, as long as you can clearly evidence your good financial position to the right lender.

For those relying on maintenance payments to fund a mortgage, prospects improve when you know where to look, and a good broker will again be able to help you find a lender with an appropriate product for you. Most will require there to be a court order in place before they lend, and some require evidence that maintenance has been paid for a certain number of months, but it really depends on your individual circumstances. It is often possible to get a loan for half the value of a property based on a decent level of maintenance, sometimes slightly more.

People often ask me what difference age makes to your ability to get a mortgage. This can indeed be a factor in affordability, as due to restrictions from the regulator most lenders are unwilling to go beyond the age of 65, or at a push, 70, in a mortgage term, and a shorter term means higher payments for the same loan. This is another case where a broker may be able to introduce you to a lender who is sympathetic to your particular circumstances and can offer something a little different from the standard products you might find on the high street.

I’ve worked with clients in changing circumstances for many years, and the best outcomes have tended to come where people engage in the collaborative law process in order to get a 360 degree view of the available options. Where mortgage lending is concerned, there’s a lot to be said for putting your cards on the table and discussing your resources together with your legal advisers, so that the best possible solution can be found for everyone involved.

peter.tsouroulla@johncharcol.co.uk

Supporting your children

Suzy PowerCreative Divorce’s Family Consultant Suzy Power looks at how best to support your children through separation and divorce.

For most couples who are struggling with their relationship, children are the overriding concern when considering the possibility of separating. All parents worry about the effects of parental separation on their children and the prospect of an uncertain future for the children can exacerbate the trauma of the decision-making. The most common question I am asked is “will they be ok?”.

There are certain key things that all parents can commit to, which can really help their children through the period of separation and beyond.

  • It’s crucial not to fight with each other. If you can’t do that, you need to ensure that children are protected from any future conflict. Conflict is damaging for everyone and particularly for children.   If you say to your children that when you separate there won’t be any more fighting, then it’s important to keep your promise.
  • Give your children an understanding as to what’s happening. Children generally want a simple straightforward explanation of what’s going to happen rather than being kept in the dark.
  • Respond to their questions when they’re ready to ask rather than overloading them with too much information at the outset.
  • Acknowledge that this is likely to be a sad/difficult/tricky time for everyone and that you will both be there for them to work things out and listen to their worries.
  • Children need to be able to spend time with each of you knowing that you’re both comfortable with this arrangement. This means the children can go between you without having to worry about divided loyalties or keeping secrets.
  • Retain as much continuity as possible – school, activities, sports, friends and grandparents can all provide a sense of stability.
  • Make sure you have plenty of support yourself, whether from friends or professional help from a counsellor. It can be hard helping your children when you’re feeling stressed and emotionally drained, so anything you can do to keep yourself strong will help the children too.

I am a great advocate of mediation and the collaborative process for parents going through separation as these processes keep the channels of communication open and support parents in focusing on the needs of their children as they work out future arrangements. In my experience, this tends to result in outcomes that work better in meeting the long term interests of all family members rather than those reached through litigation. Where collaborative law and mediation are appropriate, they offer the best opportunity for parents to find solutions that work well for everyone and for them to reach lasting and constructive arrangements regarding their children’s wellbeing.

suzyepower@blueyonder.co.uk