fbpx

Monthly Archives : February 2018

Help to buy mortgages

Valuations vs Surveys

Conveyancing is an important part of the home buying process, and it’s important to note it’s required when both buying and selling a property.

So what should you consider when choosing a property solicitor to carry out your conveyancing? It’s important to use a qualified property solicitor who’ll be able to take care of a range of issues on your behalf, including:

Family Cycle

The value of protection

Buying a new home is possibly one of life’s biggest and most exciting events. It’s also a major financial commitment – one that could be with you for 25 years or more.

Your ability to maintain your mortgage payments relies on a constant income, so how would you continue to make your mortgage repayments if your income was reduced – or stopped? Here we look at two similar scenarios with very different outcomes.
Read More

Interest Rates

Interest Rate Rise

Interest Rate Rise

In 2007 Bulgaria and Romania joined the European Union, Lewis Hamilton got his first drive in Formula 1 partnering with Fernando Alonso at McLaren, the final book in the Harry Potter series was published and England played their first match at the new Wembley Stadium.

It was also the year in which the Bank of England last raised interest rates, when they went up by 0.25%.

That all changed on 2 November 2017 when The Bank of England voted to raise UK interest rates for the first time in over a decade, to 0.5%.

So how could an interest rate rise of 0.25% affect you?
In the short term, both borrowers and savers could see a modest effect on finances. Savers are likely to be pleased with the welcome boost even if the increase is small. Borrowers however will be less pleased as they could see their mortgage repayments rise.

Impact on borrowers
Higher interest will mean that those on Standard Variable Rates (SVR) or Trackers Rates will see their mortgage repayments rise. On a mortgage of £125,000 an increase of 0.25% would result in payments increasing by £15 a month (£185 a year).

Those with larger mortgages will in turn see a larger payment increase. Those with a mortgage balance of £250,000 will see their monthly payments increased by £31 (£369 a year). However, the 57% of borrowers on a fixed rate deal will be unaffected during their fixed term.

These figures might not seem much in isolation, but borrowers should also be aware that higher interest rates could impact other borrowing, like credit cards, car credit or unsecured loans.

There’s also the prospect that rates could continue to rise over the long-term. If we hit 1%, the monthly repayments on a £125,000 mortgage would go up by £78.48, and £161.69 if the rate doubled to 2%.

If you’re concerned about the impact of higher interest rates on your mortgage repayments you may want to consider a fixed-rate deal, especially if you’re currently on SVR. Remember, if you’re already on a fixed-rate deal you may face higher repayments when the term ends. Make sure you diarise when that’s due to happen and get in touch so that we can discuss whether the best option is to remortgage.

Impact on savers
According to research there’s no standard savings account on the market that can outpace inflation, in fact the average easy-access savings account is currently paying 0.35% interest.

If the Bank of England increases the base rate savers may be able to find better returns to keep up with rising inflation. However, as with mortgages, those already on a fixed rate will not see higher rates until the term ends.

Whether you’re a saver or a borrower, we’d love to help you make more of your money. Get in touch to find out how.

Your home/property may be repossessed if you do not keep up repayments on your mortgage.

critical-illness-insurance

Critical Illness cover can make a difference

Critical Illness cover can make a difference

If you’ve ever turned down a recommendation of critical illness because you can’t see the value of it, this real-life case study might make you think again.

Peter Simpson is a successful commercial manager for a Berkshire-based firm. He’s married with three children aged 13, 11 and 9 and has a £297,000 mortgage. His wife gave up work to bring up the kids, making Peter the main breadwinner.

When he was 24, buying his first house, Peter had arranged to see an Openwork adviser who helped him sort out a mortgage and critical illness cover. Over the years, Peter’s circumstances changed; he got married, started a family and moved up the housing ladder. During that time he has stayed close to his adviser and updated his cover in line with his changing circumstances.

The value of critical illness cover
Peter has always been able to see the value of critical illness cover, particularly because his father had sadly died of cancer. Aside from covering his mortgage, Peter also wanted to make sure his wife and children would be OK financially if anything happened to him.

In December 2016, totally out of the blue, Peter had a stroke. He had stopped at a friend’s house on the way to work when he suddenly and unexpectedly experienced a terrible buzzing sensation at the back of his head. He lost the feeling in his right-hand side and his speech became slurred. Spotting something was obviously very wrong, his friend got him into the house and immediately called an ambulance. Within 45 minutes Peter was being treated in hospital with his wife by his side.

When he was back home recuperating, Peter started the claims process, which turned out to be extremely straightforward. After a few phone calls and emails Peter received confirmation that his policies would pay out in full and he could expect £380,000 in his bank account.

Avoiding the financial impact of serious illness
Thanks to careful financial planning and an appreciation of the difference a critical illness plan can have on the financial impact of a serious illness, Peter and his family now have the freedom to make choices.

They have been able to make two platform investments, one that would act as a pension for Peter’s wife, and the other to enable Peter, a higher-rate tax payer, to maximise his personal allowance every tax year. They have also reduced their mortgage and swapped it from interest only to repayment.

This case study highlights the importance of protection especially if you have a loan or you’re the main breadwinner.

Please talk to us if you think you need cover, or you need to update your existing provision.

Social

Could your status update affect your claim?

Could your status update affect your claim?

Given the nature of social media and the millions of us who use it every day, you probably weren’t alone in posting pictures, videos and status updates showing off your recent Christmas presents and festive celebrations.

But did you stop to think that posting information like this on Instagram, Facebook, Twitter or Snapchat could be advertising your property, your whereabouts and your latest expensive Christmas gadget to criminals, and potentially void your home insurance?

Counting the cost of burglary
There were 650,000 domestic burglaries in the 12 months to March 2017, costing, on average, £2,267 in stolen valuables and £566 worth of damage.

Figures also show that the number of claims relating to domestic burglary increases by a whopping 36% from November to March. This could be down to the longer nights providing more opportunities for criminal activity, and the likelihood of burglars finding expensive purchases and presents following the Christmas period.

Take a break from social media
If you suffer a break-in shortly after publishing your latest holiday snaps on social media, it could lead to your home insurance provider deciding you are partly at fault for advertising an empty property and this could affect your claim.

Are you vulnerable?
When assessing an application for home insurance, insurers are reportedly considering asking homeowners if they use social media, as the risk of over-sharing becomes more and more common. If you use social media and think it could affect your home insurance, consider taking the following steps to reduce your risk:

  1. Turn off location-based services on the social media accounts you use
  2. Never share your home address on social media
  3. Make your posts private so that only your friends and connections can see them

It also makes sense to review your home insurance cover, especially after Christmas or birthdays when you may have bought or received expensive items.

If you’re concerned you may not have the right type of cover, or you think you might be underinsured, please talk to us.