Ian is determined to ensure that you are fully ‘in the know’ when it comes to making the most important financial decisions of your life.
“We love what we do and would never want a customer to be confused or not fully aware of the positive – and negative – aspects of a financial decision. The FCA risk statements and guidelines have been created to ensure that the key risks are clearly communicated. We fully support and promote these communications.”
-Ian
When you are looking at financial products, such as mortgages, insurances and equity release, the FCA (Financial Conduct Authority) and TMG Direct Ltd (whom we are a trading style of) quite rightly insist that we, as brokers, clearly illustrate the risk/s they deem to be the most important aspect you need to consider.
Here, we look at some of these risk statements and explain why they are so important and how we use these to ensure you are receiving fair and comprehensive information and you understand the product completely before you make the commitment.
We want you to understand this information and don’t want you to spend money on a product until you do.
Home repossession risk statement:
“Your home may be repossessed if you do not keep up repayments on your mortgage.”
Taking out a mortgage is a serious financial commitment, and the decision should not be taken lightly. You are entering into a legally binding agreement with the lender – if you do not fulfil your side (paying the monthly mortgage payments), the lender can start the process of taking possession of your home. They are allowed to sell your property and use the money from the sale to help pay off the debt which you owe.
In this instance, you would be removed from your home and would have to find alternative accommodation.
There are many organisations that can assist you before you get into this position, and it is always best to look at options as early as possible.
Equity release risk statement:
“Equity Release will reduce the value of your estate and can affect your eligibility for means-tested benefits.”
“will reduce the value of your estate”
Upon your death, your ‘estate value’ (the financial value of what you leave behind) will have been reduced by the fact that you have chosen to obtain a lump sum or steady stream of income during your life through Equity Release.
“can affect your eligibility for means-tested benefits”
If the time comes when you would like state assistance, the government ascertains how much help you can get based on the value of your assets. This value could have been affected by Equity Release.
Buy to let risk statement:
“The FCA do not regulate buy to let mortgages.”
As a commercial (not consumer) transaction, buy-to-let mortgages are not regulated by the Financial Conduct Authority. However, since 21 March 2016, any transaction classed as ‘Consumer’ Buy to Let will come under the governance of the FCA.
Read more on the FCA website >
Debt consolidation risk statement:
“Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.”
As above with the ‘Home Repossession Risk Statement’, taking out a mortgage (including for the purposes of paying off existing debts/debt consolidation) is a serious financial commitment, and the decision should not be taken lightly.
There are many organisations that can assist you before you get into this position, and it is always best to look at options as early as possible. Talk to us – we can help!
We hope you found this guide useful. If there is anything we can talk through with you, please contact us. We are always happy to help.