Financial advisor or mortgage advisor

[ApplePieandCustardPlease]

Hi,
I’m going through a divorce and have accepted 50% of the sale of the house (yet to go on sale). I have a full
time job with ‘x’ amount of salary, ‘y’ amount of outgoings/costs of children and ‘z’ a further increase to my salary in 2 years time (with the potential to increase further if I step up to the next band (NHS). I also have lump sums from
my pension available at 60 and at 67 (my normal retirement age) from the NHS pension scheme.

I need to find money for another house (currently in a 4 bed detached but will need a 3 bedroomed house as I have a boy and a girl). I’m looking at needing £70k-£100k. I’m 51 so don’t want to pay a lot of mortgage and end up with no disposable income as I’m already bearing the brunt of house maintenance costs. I don’t want to end up having no life if no money left.

Who is the best person to see as I need advice on my options? I want to see if I can factor in my lump sum at 60 or consider other options.

Help.

Thanks.

Family home is mortgage free so no mortgage to carry over/pay off for that.

Pensions aren’t being touched in the divorce settlement.

Start by looking on Moneysupermarket or similar as you can get an idea about what you qualify and may be able to apply without advice if you qualify for a decent mortgage.

Or if you're borderline on affordability a mortgage advisor might be helpful but if not, they're often just there to earn their commission.

You don't formally need to take your expected lump sums into account now but you could take a longer term mortgage to keep the monthly payment lower but then shorten by overpaying when you get your lump sums. Nearer the time you'll need to consider timing the end of a fixed rate with being able to over pay, but that's a way off now.

Maximum age for mortgage will be a consideration but sometimes they'll happily lend on terms that stretch into the borrower's 70s especially when they have a pension income.

But a lot depends on what you earn, your other costs, any child maintenance and the amount of mortgage you end up taking.

It will look a lot different with a £100k mortgage on £30k salary with no CM compared with even a £40k salary and CM to pay a £70k mortgage.

I'd also probably keep £5-10k back if you can, for any work the new house needs in the short to medium term, so you don't need to pay for eg a new boiler out of monthly income.

Mortgage adviser. Ask friends and family for local recommendations and you cant go wrong, even speak to a couple initially if you like and use who you feel most comfortable with. (I mean initial phone call, NOT running any applications or credit searches)

Mortgage advisers often sell only the products which give them the most commission, so watch out for that and shop around.

Your financial situation is not particularly straightforward, so I'd suggest that you see an IFA, particularly as you are considering using part of a lump sum from a pension. There could be implications you haven't thought about.

Financial advisors are also mortgage advisors. But mortgage advisors aren't financial advisors.

Make sure you go to an independent Financial advisor. Not one tied to a bank etc. You can check reviews on vouched for

Please tell me you have evidence of this and have reported it to the FCA?

Mortgage advisers have to justify everything they recommend in writing, they have to keep all their research on file, and in most cases the difference in commission between one lender and another can be £5/£10. No adviser is going to risk their reputation and career for this.

I used to work for a firm of IFAs.

All I'm saying is that some mortgage advisers sell a particular range of products, which may not necessarily be the right product for the client's needs. An adviser in one bank isn't going to send you up the road and into the arms of a rival bank.

A mortgage broker on the other hand, is the same as an IFA and should be independent.

I'm with you now, my apologies.

Apart from the fact that commission is pretty standard across the board, if a mortgage adviser does not recommend the cheapest option from their sourcing app, they will need to explain in their suitability report why they haven’t recommended it.

If there are no suitable products, they cannot make a recommendation.

An IFA will not really be able to help much where you don’t have surplus income and may be struggling to meet your current needs.

No they're not. There are loads of IFAs that do mortgages.

@fiddlesticksandotherwords This is untrue about Mortgage Advisors offering products with the highest commission. When we submit a case we have to justify why the product is the most suitable. The most common reason is it's the cheapest based on circumstances. If we were found to be recommending only the highest commission we would be removed from the FCA register and be without a job!

@Maddy70 Not true, Financial Advisor and Mortgage Advisor are two separate things and require two different qualifications. I work with IFA's who refer their clients to me if they need help with Mortgages. There are some IFAs that are also qualified MA's and there are MA's that are also qualified IFA's

@ApplePieandCustardPlease If you'd like some advice, I'm an Independent Mortgage Advisor with The Money Group. Feel free to drop me an email at [email protected]

It certainly was true when I worked for an IFA, and something our consultants often had to sort out for clients coming to us who had been... er... mis-sold policies by other advisers. I left that industry over 20 years ago though, so I am glad that things have moved on and it no longer happens.