Should we have an IFA?

Cautious_Investor_3

henpecked1 wrote: »

cant see what an IFA could do to be honest. I would have to charge a fee and no asset types baulk at them. Build up a worthwhile lump of 100k plus and I think IFAs will be able to help. fIRST OF ALL, PAY OFF THE MORTGAGE!

I know plenty of IFAs who are happy to work with a lot less than £100k!

Reaper

henpecked1 wrote: »

fIRST OF ALL, PAY OFF THE MORTGAGE!

Not necessarily as they are only paying 2.49% on it. If they can get more than that from savings/investments then they could hold off on repayment for now.

Having said that I am extremely debt adverse and I personally would pay it off even if it didn't make financial sense. But that's just me.

dunstonh

Utilising the annual ISA allowances can be more important than paying off the mortgage. ISA allowances are a use it or lose it allowance and for higher rate taxpayers, the long term benefit can be significantly higher than any short term benefit of paying more off the mortgage.

of course, nothing wrong with a bit of both (which is what I am personally doing by maxing the ISAs each year and overpaying the mortgage).

pinkteapot

Thanks for the advice all. Re the mortgage - it's over 15 years so currently £670 per month.

If we overpaid instead of saving, we could be mortgage free in around three years. It's a lifetime tracker product with no redemption/overpayment penalties.

As I mentioned earlier though, I worry about paying it off and then having all our money tied up in the house and not enough in savings to live on. I take the argument about getting rid of debt; I'm not a fan either. But I don't see the point in paying it off ASAP and then having to mortgage again if we're short of cash in the future. At the current rate it's the cheapest borrowing we'll ever have access to. Not to mention that if we're on one low salary in the future then getting a mortgage may be harder, especially on a deal like the one we have now (though LTV would be small; house is worth about £230k).

We are going for a mixture currently; planning on knocking a lump off the mortgage with my next bonus and probably putting some more towards it if we decide our pot of savings is sufficient for the next few years. Lump sum overpayments are allowed on the mortgage with no limit so we can choose to throw some savings at it at any point. I don't see interest rates starting to rise till mid 2011 and I expect them to rise slowly for a year or two. We do aim to get a decent amount paid off it before the rises become significant, since we're on a tracker.

We need to go over all our financial arrangements again (not even told my pension providers my new married name or our new address yet oops), I think we'll do some more research, particularly in the area of pensions, and then if we don't feel confident deciding things ourselves run it past an IFA. I don't mind paying for professional advice for things if I feel they're a bit out of my league.

Main point of the thread (know I've rambled a lot) was whether we were in the income/wealth category for an IFA. I can see we're borderline in that regard so we'll spend some time on it ourselves first, get the pot up a bit and then in the spring once my next bonus is in the bank/house meet with some if we need to.

Re the guilt about giving up work, it's only because I earn what to me seems like such a stupid amount of money. My parents gave me a very different upbringing to the ones they had. I'm in a position to give my kids another big jump up that ladder. But I had a wonderful childhood, so I couldn't complain if my kids get something similar. I'll see how I feel as time goes on and the kids come along. I do feel like I want to give up work and be home with them so I want us to prepare financially for that, as far as it's possible to. But there'll still be the option of working if I want to. After all this I'll probably go nuts with a baby for company and go straight back. :rotfl:

Thanks again to everyone who's taken the time to reply - some really good advice and things for us to think about. :money: