Stuart Marshall, Managing director of Liquid Expat Mortgages looks at how Expats and Foreign National are missing out on saving thousands of pounds in interest payments and saving themselves years of mortgage payments. “It’s fair to say that many of us with mortgages make the promise to overpay so we can remove the largest financial undertaking we are ever likely to undertake” Fact is though that many of us don’t even take the smallest of steps to make any kind of provision to repay a mortgage early.
“At Liquid Expat Mortgages we have worked with the largest panel of lenders for over 12 years, and they tell us that less than 10% of customers actually put any measures in place for paying off their mortgages early.” That’s quite a worrying trend and one which hasn’t improved over the many years of providing mortgages for expats and foreign nationals. But, with the help of an expert mortgage broker to explain all of your overpayment options, you can avoid falling into the majority.
“We always present the option of over paying to our customers when they are looking at a mortgage or remortgage as it’s a fundamental way of not only saving huge amounts of money in interest payments, but also a great way of building your wealth by using the money you save to invest elsewhere. Aside from the fact savings’ returns are at rock bottom – indeed as they have been for many years now – over paying on your mortgage is one sure way of improving and beating most returns on savings. By overpaying on a mortgage at 3.1 % you would need a return on savings far in excess of 3.1% to gain any advantage over using savings versus overpaying your mortgage.”
What does a mortgage overpayment actually look like?
Maybe the best way of showing what Stuart Marshall is referring to is to showcase what it actually means to overpay on your mortgage. Someone with £200k mortgage with 20 years left on the mortgage term at 3.1% interest would typically repay £1,119.23 per month. How would that look by overpaying £250.00 per month? “Very different indeed “, says Stuart Marshall. “If interest rates stayed the same for the duration of the period of your mortgage you’d save £17,188.00 in interest payments alone. Furthermore you’ll reduce your current 20 year repayment term by 4 years. So after 16 years you’re mortgage free!. It really is that simple” It’s knowledge like this that comes from an expert broker and can help explain your options for mortgage overpayment.
It would seem that overpaying your mortgage can be a real boost to your savings and can help increase your wealth as you quickly eat into the mortgage debt by reducing the interest liability owed and therefore paying less interest to any lender . Any savings you make can therefore be put into other savings vehicles. “ In fact many of our customers use the savings they accumulate as a deposit to a further investment property. Having learnt the benefits of overpaying they start to make mortgages work for them rather than purely for the banks or lenders!”
Using an expert broker.
John Squires, Head of Mortgages at Liquid Expat Mortgages, believes that you should always speak to experienced brokers who can assess your true needs. “Most mortgages allow you to overpay by 10%per year. However, some mortgages don’t allow any overpayment for a determined period of time. So any overpayment you make can actually cost you money as you may be liable for fees. And there are other things to consider too. The most important piece of advice I would give to anyone is to talk to a broker who has Expat and Foreign National Mortgage experience. These brokers have the experience and knowledge of working with lenders who can access products that meet your overall requirements and objectives. Ultimately, there is no substitute for a conversation with a mortgage broker.”
Stuart echoes these sentiments, “By all means get an idea of what you might need and what you’re trying to achieve. However, always try and speak with a qualified broker as they will have all kinds of information that you may not be privy to online, such as exclusive product offers, time sensitive offers or even factors such as taking into account your occupation and the quality of your credit/financial standing.”
“There are so many variables when lenders look at a mortgage. It is the job of the broker to ask these questions and ensure the customer obtains the best available product deal currently in the marketplace. In pretty much all cases we will advise customers to build in an overpayment option as it is such a great way of not only reducing your mortgage term, but also because of the sheer amount of money you will save.”
Stuart Marshall is Managing Director of Liquid Expat Mortgages which has successfully helped thousands of UK Expats and Foreign Nationals all over the world successfully find their mortgage. To discover your options for mortgage overpayments and other financial options, using an expert broker like Liquid Expat is invaluable.
Liquid Expat Mortgages is the No.1 Expat Mortgage broker. We have a team of experienced and regulated mortgage consultants, dedicated to helping expats find the very best mortgage deal. We work with over 50 lenders to deliver the best product for your needs. For complete Expat Mortgage Support contact Liquid Expat Mortgages and see how Liquid Expat Mortgages can help you. Just call us 24/7 on +44 (0)161 871 1216 or visit www.liquidexpatmortgages.com.