Financial juggling advice needed

Posted by: Rasher on 08 July 2004

I need financial advice as we appear to be heading towards moving house to a place that could be well beyond my means. Roll Eyes. (Isn't it always the way!!)
I have a regular mortgage on the house, which I changed only a few months ago.
I have a small business and own a brand new two storey office building which has no mortgage on it. I would move out and rent it for income, working from a seperate outbuilding at the "new" house. I understand now that I should have the mortgage on the office building instead of the house, maxed out so as to put the interest against income tax, and I need to raise even more on a mortgage - total being more than the worth of the office building. I think I should be able to do this. The total mortgage would be 40% of the total worth of the house and office. It was only 9 years to go, but that would now be out of the window.
If I go see a financial advisor, would they fully understand and appreciate the tricks that I need to pull to get max tax relief, (I've got to worry about capital gains on the office if I ever need to sell) or are they just mortgage sellers? Should I see my solicitor or my accountant instead? I don't want to get tangled with a finacial advisor and be given duff info. I need this to work. Who do I go to?
Advice appreciated.
Posted on: 08 July 2004 by NB
Rasher,

You have pt,

Regards

NB
Posted on: 09 July 2004 by joe90
As not all Naim dealers and owners are created equal, not all financial advisors are either.

There's gotta be one out there who knows what they're talking about!

Keep asking until you get an answer that makes sense to you.

More info has gotta be good for you!
Posted on: 09 July 2004 by MichaelC
Rasher

Speak to your accountant.

You have to be very careful restructuring borrowings because the Revenue look to the purpose of the loan in allowing relief for the loan interest.

Regards

Mike
Posted on: 09 July 2004 by Bubblechild
Don't forget that Independent Financial Advisors are paid commission on take-up of products that they recommend to you and that, in most cases, that's why they recommend them.

Not all products come with IFA commissions attached, and are consequently far less frequently recommended.

Beware IFAs who say that commissions they receive will be passed on to you. After I got my first mortgage, I received a few letters from my (ex-)IFA (who was, by the way, attached to a very reputable law firm I had used for years) along the lines of:

"Commission paid for take-up of mortgage: £757.23
Our fees in respect of this service: £757.23
Amount owing to you: £0.00"

Subsequent work I did for a well-known investment firm did not inspire a great deal more confidence in the IFA profession, nor give me much of a clue about how best to answer your question. But it did make me ask some more searching questions of my own when I got my next mortgage...

Good luck with it all.
Posted on: 09 July 2004 by Bob McC
I was always under the impression that were 2 types of IFA. Those that received a commission and therefore didn't charge clients and those who charged fees and passed commission back to the client. How can they be truly independent if they are receiving commission, they will be bound to recommend the product offering the highest won't they?

Bob
Posted on: 09 July 2004 by Tarquin Maynard - Portly
Bob

No.

Regards

Mike

Spending money I don't have on things I don't need.
Posted on: 09 July 2004 by Tarquin Maynard - Portly
quote:
Originally posted by Bubblechild:
Don't forget that Independent Financial Advisors are paid commission on take-up of products that they recommend to you and that, in most cases, that's why they recommend them.

Not all products come with IFA commissions attached, and are consequently far less frequently recommended.


Over simplistic, not really true.

The sad fact is that people want the worlds best financial advice, but dont want to pay for it. Why does the British public have such a problem in paying for financial advice? You dont expect a plumber to work for nothing and Hi Fi is not sold to the public at cost. The fact is people dont want to pay fees.

I must admit to a huge amount of schadenfreude for all the smug gloaters who paid into the Equitable Life because they did not pay commission. ( This claim was actually amended to include the words "to middlemen", as the Equitable Life salesmen where amongst the best paid in the industry. ) IFAs for some time would not use them partly because they did not pay commission to IFAS but latterly, because they where financially very weak.

I work in financial services, for a Life Company and deal through IFAs. Every month or two a member of the public will try to come direct to us because they did not want commission to be paid to an IFA - even though a commission give up could have been negotiated via an IFA. These people have often been to an IFA, been advised to take out a policy with XYZ life, and then try to cut them out of the loop - like having a dem, and trying to buy direct from the manufacturer.

quote:
Beware IFAs who say that commissions they receive will be passed on to you. After I got my first mortgage, I received a few letters from my (ex-)IFA (who was, by the way, attached to a very reputable law firm I had used for years) along the lines of:

"Commission paid for take-up of mortgage: £757.23
Our fees in respect of this service: £757.23
Amount owing to you: £0.00"


So they did what they said they would. Good for them, good for you.

Regards

Mike

Spending money I don't have on things I don't need.