Tue 09 Sep 2014
Property News: Fund Raiser
Buying a home is, for most people, the largest investment they will ever make – mortgage advisor Keith Carr of John Charcol offers expert advice
We leave school filled with knowledge. We can add up and spell, we can read, write, and remember strings of dates and how the earth is formed; some of us have a grasp of sciences and some of the arts – but very few of us have the first idea of how to manage money, personal finances and the like. Yet managing our financial lives can be the difference between happiness and, in some cases, misery.
Buying a property is a massive decision and a huge financial consideration, but how many of us really understand the different kinds of mortgages and loans that are on offer? Do we even know that there are different kinds of loans? Perhaps not, and this is where expert financial advice is essential.
Keith Carr of John Charcol is one such expert. As a company, John Charcol has just celebrated
a 40th anniversary and Keith has been with the company for seven years. In October 2012 he became a partner in recognition of his skills, and he now works as an associate specialising in Sussex and surrounding areas.
With specialist knowledge in commercial and development finance, he is also an expert in
all areas of residential finance. But following several years in which borrowing has been less easy, how does Keith see the current market?
“After the property crash in recent years, commercial and development options certainly narrowed and lenders withdrew to more standard lending solutions, but right now things are looking up for developers and businesses. I now treat those types of client in a similar way to residential clients. I am able to offer them a much wider choice of finance deals and find better solutions and options that perhaps they did not know existed. I now find that development finance is a big part of what we can offer.”
So where do the clients come from? “Well, a lot of enquiries come from people who perceive that they have problems or issues in gaining finance. They will come to John Charcol to find out if we can help, which of course we can, more often than not. We are certainly one of the best options for anyone seeking advice, not only for buying property but for so many other things that require financing.
“A standard borrower may go straight to a conventional lender, but in doing so may not be given the full range of options that as independent mortgage brokers we have access to. And there are so many other things that we can help with, like protection. We work with top insurance firm Legal and General and have access to the wide variety of services that they offer.”
If someone is looking to buy a property, what would Keith advise as the first step in finding
a mortgage? “Firstly, I need to find out what their aspirations are. What do they want to achieve? Is this a new home, a second home, a refurbishment, or even a car or to raise funds for school fees? You can raise a mortgage for any legal reason, but firstly I need to see that clear goal.
"My client meetings are treated almost like a confessional, where they can tell me all their aspirations, fears and goals and be rest assured that everything they tell me is in total confidence and by the end of it we would hope that I can not only advise the best course of action but my clients leave feeling both good about what we have decided together and understand the reason for my advice! I too am bound by the Data Protection Act - it's important for my clients to understand why I'm asking questions and that I don't work for the banks, but I do need to get a clear position of where they are financially, build up a track record for that client, ascertain if they are a previous borrower or a new one.
“We then need to assess whether their goal can be achieved, and make sure that they choose the right option from the wide range that’s on offer.”
In an ideal world, what would a new client need to bring with them when you first meet?
“Ideally, a clear record of both income and expenditure. That would include pensions, school or nursery costs, regular debts or debits, and of course day to day living expenses. One evening spent doing an income and expenditure spreadsheet can be a great help in making sure that we find the right level of borrowing, and the right way of borrowing an appropriate sum of money.
“We can often help people to rationalise their finances and achieve a better deal too.”
Are there deals for people of all ages? “Yes, very much so, and there is much more of a need, with our ageing population and extended life expectancy. We now have lenders who will lend to mortality age, so there are lots of different deals we can offer now that were not available before.
“Above all, it is essential that people are honest and give us the full picture. If they do that it makes our job at John Charcol so much better. We can help a borrower get through the door and at the same time get things done better.”
Is the Brighton market very different from the rest of the country? “Well in Brighton we do a lot of buy-to-let mortgages, as that market in Brighton is huge, in part due to the large student population that makes property investment such an attractive prospect. We have great access to these kinds of mortgages, and are well placed to find the best deal for you. In the longer term we can also help clients to rationalise their borrowing against their property portfolio. We can also advise on changing lenders to get a better deal, and at the same time we can advise when a client already has a great deal and a change would not be a good idea. Sometimes it’s not about saving money but about peace of mind and stability.”
Do John Charcol only advise on borrowing for the UK market? “We actually work across the UK and beyond, and we often find that we help British citizens who are living abroad to purchase homes for them to move back to at some future point.”
Is their a limit to the scale of lending that the company can offer? “No, there is no limit to the size, big or small, that we can advise on.”
Keith has certainly given us food for thought, and later that day we look at the company website. It’s a refreshing experience; a financial resource that is not steeped in complex jargon and terminology. It is easy to read, uses everyday language and is easy to navigate. Many of the basic questions that one might ask are answered there, but it also makes it very easy to book an appointment to meet with a local representative, like Keith.
Our meeting with Keith has been relaxed, informal and friendly, and there is no reason to believe that this approach would be any different were we looking to borrow money. Of course, Keith makes it clear that longer meetings might be neccessary when getting to know a potential client, in order to really understand their needs and find the very best solution.
And what does this service cost? “Our charges are based on two considerations: the loan amount and the complexity of your individual circumstances. We will provide you with a free initial consultation and we will always explain exactly what you will be charged before you choose to proceed with an application. As we offer a bespoke service our charges can vary. Our minimum fee is £495, (of which a non-refundable £150 is payable when you make a formal mortgage application). The average fee paid by our clients over the last year was 0.24% of their loan value. (For example, if your loan amount is £300,000 our average fee would be £720). If your circumstances are more complex we may charge a higher fee.
Our maximum fee is 1.5% of the loan value. (For example, if your loan amount is £300,000, our maximum fee will be £4,500).”
That is the kind of honest answer that instils confidence, and with the widest range of finance packages on offer, Keith Carr of John Charcol is clearly the man to talk to.