Stephen Brown of Classic Mortgages

We sat down with Stephen Brown at Classic Mortgages to find out his industry predictions for the future of the financial industry and why external circumstances can be so detrimental...

1) Firstly, what does Classic Mortgages do? 

Exactly what it says on the tin! Anything to do with mortgages, loans, life insurance, debt management plans and remortgaging.

2) What’s the best advice you can give to consumers to minimise the chances of them getting into debt?  

That’s a very difficult question because with a lot of cases I deal with debt has arisen as a result of external factors such as unemployment, divorce or death of a partner.

3) What characteristics would mean that someone qualifies for help from your company?

We can help anyone who can’t meet their monthly outgoings. A lot of people start paying their bills with credit cards – we even see people paying their mortgages with their credit cards, or even worse paying off their credit cards with credit cards and it just costs them so much.

4) How straightforward is the procedure?

We offer a full financial analysis to look at an individual’s monthly income and expenditure. We try to help them balance that and then if there is enough left over help them pay the extra to their creditors. The procedure usually takes a maximum of two hours.

5) What is the most common reason for people getting into debt?

It’s difficult because most of the time people get into debt as a result of external factors – very rarely do we have to help someone who is just spending for spending’s sake. Factors people can’t plan for like divorce or illness are common reasons. Recently I’ve had a number of cases involving death of a partner, which is really sad because not only have they lost their partner but now they have to pay the joint debts with only one income.

6) How long have you worked at Classic Mortgages and what did you do before?

I started Classic Mortgages six years ago. I wanted to get out of the corporate life, before Classic Mortgages I was a business development director for a top 20 building society company.

7) How can people minimise their monthly costs? 

Most people have already cut out luxuries and cancelled insurances, so the only thing that is really left to cut out is what is paid to creditors and the way we can help people with this is through a Debt Management Plan. 

8) With so many people in debt do you think more needs to be done to encourage people to take a better approach to managing their finances?

Yes, but again it is the unforeseen circumstances which cause debt. You can’t prepare for illness and things like that which cause you to take time off work. The easy way out of these situations used to be to remortgage and consolidate debt that way but there is no longer the same equity in property. 

9) Do you think more people are facing up to their financial problems? 

Not really. I still go to calls where people are burying their heads in the sand. Often I ask for documentation and they pass me a plastic bag filled with unopened letters. Recently I was sitting with a guy in his ground floor apartment – I was sitting with my back to the window and he was facing it. Suddenly he ducked down out of sight, and I turned round to see the postman coming to the door. He was absolutely terrified of the policeman coming.

10)              Do you expect the financial situation to improve in the coming months?

Definitely not. The austerity measures have not yet hit – once they are implemented more people will start losing their jobs. At the moment lots of people are paying extremely low rates on their mortgages, but if interest rates move then people will be in deep trouble – where do they find the extra cash? If they have bad credit then they can’t remortgage and those in debt usually have a bad credit history. What’s more, even if they do have a good credit rating there usually isn’t enough equity left in the property.