She is a mortgage and protection adviser at the Mortgage Selection Bureau in Bromsgrove, and advises clients on all types of mortgages across the board. She believes in the value of offsets and frequently explains the products to those customers that she thinks could benefit from them.
“The best thing about offsets is the longer-term savings that can be made, which can be phenomenal over the course of the mortgage,” says Kate. “Many other advisers don’t bother with them, either because they think they are too complicated or they think their clients will find them too complex.
“There are very few clients that can’t benefit from an offset. However, I am wary of recommending them to a client who doesn’t have much in savings and has already told me they aren’t financially disciplined.
“The only other type of customer that I’ve found it really didn’t suit was a couple I advised who were very affluent indeed. They wanted to be able to make lump sum overpayments into their mortgage, but really couldn’t see the benefit of still having access to that money, as they didn’t need it. It’s not a position that many people are in, but an offset wasn’t quite right for them either.
“Of course, the customer needs to understand the longer-term savings and if they have not bought into that concept, an offset may not be suitable for them, even if they could financially benefit.”
Kate said she targets which clients to introduce offsets to depending on the results of the fact find. “My first question is whether or not they have heard of an offset.
“So I explain that it isn’t really much more expensive than a standard rate but it enables large long-term savings. I also ask if they have any savings and what interest they are earning on those savings. It’s virtually nothing of course.
“Then I explain that they could save paying interest on that same balance on their mortgage. The figures speak for themselves.
“I think what puts some brokers off is the fact that you have to do an extra source for offsets on one of the major systems. It’s easy to do but it is slightly more work and then you need to have that extra conversation to the client to explain the products. Maybe brokers don’t want that extra conversation.
“But I find that when you see a client really getting it, they also appreciate that you have taken the time to talk about offsets with them. One client said to me that they had seen two other brokers and neither had mentioned an offset. But I did and he went for it.”
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