Financial advice/recommendations needed

Sharkssword

Hi all,

I hope you can help or advise regarding my situation!!

I have a savings pot of around £60K currently doing nothing in particular in the bank.

I also have a property I rent out with a mortgage of £78K.

The fixed rate on the property ended in Feb this Year and it is now on the default tracker rate of 2.74% above base.

The property is worth around £170K

I'm looking for the best advice regarding how to utilise the money and/or capital in the property. Is it a simple case of knocking down the mortgage? - The monthly costs of the mortgage is around £180 and the rent I get is £725 so perhaps keeping it like this but using a remortgage to free up some money to investment in something else is a good idea??

Apologies for the dumb questions, but as you see I'm in desperate need for the best advice!!

Many thanks for your time
Stuart

Meeper

The most appropriate solution is dependant on your goals and aims for the future, your current income & expenditure, your current full assets & liabilities, your tax position, and so on.

If you are in desperate needs for the best advice, go and see an adviser. Nobody on here can give you correct advice because that is a regulated activity. You will get suggestions from people who don't have all the facts, so you can rely on that if you like, but that's at your own peril.

Find an adviser local to yourself either at www.unbiased.co.uk or word of mouth recommendation.

Sharkssword

Hi,

Many thanks for the speedy reply.

I shall check out the link provided.

I'm based near Weybridge, Surrey so if anyone can recommend someone locally that would again be terrific.

Many thanks
Stuart

DiggerUK

Sharkssword,
No need for advisors if common sense,and simple maths, can answer your question for free.

To be told "Nobody on here can give you correct advice because that is a regulated activity" is as daft as saying that 'the only advice you can be given here is incorrect advice, because that is an unregulated activity' At the end of the day you will have to make the call.

You are paying 3.24% on your mortgage, if you are getting more than that net on your savings, I'd leave as is.
If you do decide to pay down then you will need to consider what to do with the spare from lower repayments, maybe overpayments could be considered.
..._

Rollinghome

By all means contact an IFA but bear in mind that the vast majority of them are ex-insurance and bank salesmen with only very basic qualifications. Their job is to sell retail products on behalf of the fund managers and insurance companies for which they are paid commisson. They are very unlikely to have any knowledge of other investments including property.

So if you need one check out a few that work only on a fee basis and treat their advice with a healthy degree of scepticism. I know several in your area but wouldn't recommend any of them.

Meeper

Rollinghome wrote: »

By all means contact an IFA but bear in mind that the vast majority of them are ex-insurance and bank salesmen with only very basic qualifications.

Not the case.

Their job is to sell retail products on behalf of the fund managers and insurance companies for which they are paid commisson.

Not the case.

They are very unlikely to have any knowledge of other investments including property.

Not the case.

So if you need one check out a few that work only on a fee basis and treat their advice with a healthy degree of scepticism.

Both fee and commission-based options are perfectly viabel in the majority of situations.

I know several in your area but wouldn't recommend any of them.

Which is a blessing, as any recommendations made by Rollinghome should be taken with a pinch of salt.

SnowMan

First step check what interest rate you are currently being paid by your bank.

Then while you are working out what to do move the money to a best buy instant access account such as the AA account see the top savings account article.

Have a read of the should I repay my mortgage article. While that is probably aimed at those with residential mortages some of the themes carry forward.

Do your own research first before you even think about going to an IFA. You haven't provided enough info for us to say anything definite but some things to think about

1. Have you used your cash ISA allowance for this year?
2. What would happen if things went pear shaped such as you lost your job? Would you need to sell the buy to let , would you have enough cash to get you by until that happened
3. What are the long term plans for the buy to let? Does what you are doing fit in with that? Crunch the numbers to see if repaying some of the mortgage is beneficial.

If at some later time later you do decide to go to an IFA as Rollinghome says make sure it is an IFA who ONLY works on a fee basis (i.e. all the clients they advise are on a fee basis). Make sure it is an IFA who has the appropriate specialisms that you require.

Sharkssword

Hi all,

Many thanks for all the input.

At the moment I'm getting nothing at all regarding interest on the money in the bank so that needs fixing for sure.

Regarding the property, I've no specific long term plans, it was bought as an investment a few Years ago and has worked quite well to date. A friend did mention that as the mortgage rate I have is rather good, I could perhaps remortgage up to the value of the property, say approx another £100K then re-invest this amount into something, say another property or high interest account etc.

At the moment I have no other money tied up in anything, no ISA's etc.

I'm currently in full time employment with no (touching wood!) plans that any job security issues should arise.

I guess I also need advise regarding limiting the tax I pay, currently I'm a 40% payer so limiting this on any rental costs etc is also a good thing!

Thanks again to all, any advice is greatly appreciated!

Thanks
Stuart

Rollinghome

SnowMan wrote: »

If at some later time later you do decide to go to an IFA as Rollinghome says make sure it is an IFA who ONLY works on a fee basis (i.e. all the clients they advise are on a fee basis). Make sure it is an IFA who has the appropriate specialisms that you require.

And the reason why both Snowman an I emphasise that you use someone who only works on a fee basis is because there are many out there calling themselves 'fee-based' who are 'switch-selling' and persuading clients to pay by whichever way is the most profitable to them.

With the ending of commission for new sales at the end of 2013 be particularly wary of attempts to lock you into inappropriate investment bonds with misleading claims about the tax advantages.

fairleads

In your case it makes more sense to release equity, not increase it by reducing the loan value. After all, paying extra into the mortgage during the current climate of falling property prices and low interest rates is essentially chucking money away. A modest remortgage of 20K perhaps?

Rollinghome

Sharkssword wrote: »

I guess I also need advise regarding limiting the tax I pay, currently I'm a 40% payer so limiting this on any rental costs etc is also a good thing!

Your best bet would probably be a decent accountant who should be well qualified and not just out to sell you products. By all means see a few IFAs but be very careful not to commit to anything without checking it out and giving it a lot of thought. There's a big need for good financial advice but sadly the industry is a magnet for chancers - and I've met a few of them.