Bank Of England rate remains at 0.5%

The Band Of England rate remained at 0.5%. The rate has stayed the same for the 38th month in row.

The rate staying the same indicates that there are concerns regarding a double dip recession and also concerns about increasing inflation at a higher rate than expected.

Its going to be a tough final year for Mervyn King who’s last year it is governing the Bank Of England as he balances inflation and interest rate policy.

Meanwhile Standard Variable rates from the high street lenders have been on the increase which has resulted in more customers looking to change on to a better deal.

Mortgage criteria is changing constantly between lenders and it is essential for our team to keep up to date with which lenders criteria so that we can place. There has been quite a change over the last few years and more so recently with the criteria for interest only mortgages, with big deposits being required to obtain the facility with certain lenders.

Put you life insurance in Trust

People in the Uk are paying £448 m too much in IHT according to a report that was done by Unbiased. When you take out a life insurance policy you may not have been made aware of the best practice method of putting your policy under a trust.

What this means is that in the event of death the insurance would be paid out into the trust that would then be paid out to to one your beneficiaries instead of being paid  into your estate.

Every individual has a IHT allowance called the the nil rate band of £325000 or £650,000 if the spouses IHT full nil rate allowanve has been passed on from death. If your life insurance pays into your estate then you may have to pay IHT tax of 40% on the lump sum!

The report from Unbiased highlights that 9 out of 10 people have not taken action to reduce their IHT bill. Tax planning is being neglected which can have huge financial consequences on certain individuals and families. They may not realise that their is an issue until it is too late.

In regards to Life insurance the policy should be put into trust for 2 main reasons.

1) To avoid any tax liability
2) To make the money available as soon as possible through avoiding having to go through probate

It is a very simple process and does not cost anything with us to set put a life insurance policy into Trust. Please review your policies to ensure that yours are set up in a tax efficient manner and consider this when taking out new policies.

If you have any questions then feel free to ask our Life Insurance Advisors who will help and offer a free review.

Mortgage advice services

Halifax are now the fourth lender that have introduces a mortgage for the New Buy Scheme. The other lenders are Barclays, Nationwide and the RBS. Santander have proposed that they will be lauching a product later on in the year.

The products are today made available to brokers and are designed to facilitate borrowers who have a 10%-5% deposit who are purchasing a new build property from certain builder schemes.

These schemes are offering help to the thousands of individuals who have relatively small deposits and started to lose hope in the housing market. The schemes will help put these people on the first rung of the property ladder and is a very promising scheme.

The increase in the number of lenders offering these schemes is encouraging to facilitate competition and also choice for the consumer. Remember it is not just about the rate but also the associated fees and conditions. Our mortgage advice services are here to help.

Mortgage advice services

According to Connells there has been a very strong start to the mortgage market, the strongest since 2008 in fact. The number of residential valuations has increased within the first quarter and was at 10% higher than the quarter previous. This as a 34% rise when it is compared to the same period last year.

This would have been partly due to people trying to complete their mortgages before the stamp duty holiday. There has been an increase in first time buyers entering the market which has helped home owners who are trying to sell their properties and has spurred the market on a bit.

Hopefully the end of the stamp duty holiday does not affect demand too much and the new government New Buy scheme keeps mortgage demand at these types of levels.

We have seen an increase in customers now fixing into rates as we have seen a lot of lenders increasing their standar variable rate.

Again the but to let market has been strong with increased rents been attractive to landlords and the uncertainty of the stock market.

Our advisor’s are here to help whatever the enquiry and do not just get you the best deal but provide mortgage advice services

Uk mortgage approvals

Buy To Let mortgages have increased in popularity over the last 3 years with according to the council of mortgage lenders.

Alot of landlords have increased their portfolios. With high volatility and uncertainty in the stock markets, increasingly investors have looked at bricks and mortar as a secure long term, tangible investment. A properties value can always decrease as well as rise however there has been a high demand for rental properties as people struggle to obtain mortgages.

This has resulted in an increase in rent which is attractive to landlords. Also quite a few bargains can be found in the housing market at the moment as properties struggle to sell. There are also tax advantages for landlords and also new legislation to make it easier to remove problem tenants make it more attractive.

More buy to let lenders are entering the market as they see the increase in business in the sector.This has made it more competitive.

Uk mortgage approvals

Mortgage approvals were down to an 8 month low according to the Bank Of England. Mortgage lenders criteria has become more stringent because the actual lenders lenders are finding it harder and more expensive to secure money to lend. They also expect mortgage lending to slightly decline into the second quater.

What does this mean to the consumer ? Well basically those with lower credit scores and higher loan to values will find it harder to obtain credit.

In these economic conditions the importance of good mortgage advice has never been so great. The automated systems of certain banks, online systems and tick box criteria make it even harder to obtain a mortgage. Talking through your personal situation with a qualified advisor will allow the advisor through his experience  to recommend the most suitable lender. This means that you don’t have to apply to different lenders if you have had a mortgage refused and you do not have to waste credit checks.

Lenders have different criteria and are looking for varying clients. For example one lender may lend 3x income whilst overs may lend up to 5 x income. This is just one example of many where criteria can differ. It is a mortgage advisor’s job to research the different mortgage products and to recommend the most suitable mortgage product from your circumstances.

As mortgage criteria tightens please do not leave it chance when trying to get  a mortgage but speak to professional who can help you .

Mortgage news

When being assessed for a mortgage by a mortgage lender, one of the factors they will take into account is what credit rating you have. Different lenders will put varying weightings  on your credit check result. For example a lot of the main banks and online deals will use an automatic credit check system which will spit out a result at the other end, this result in a “computer says no attitude” which is often frustrating when a common sense attitude does not prevail. There are however lenders that will assess the case manually and have the ability to use a bit of human judgement.

If you do not know what your credit score is like then if you google  “credit report”  there are options where you can be assessed for free. Then your broker will have a good understanding of your history and will be able to more accurately determine the amount that you can borrow and what lenders to use. It is also helpful to check your report even if you are not applying for credit because there maybe ways of improving your credit so that when the time comes when you need to lend money you can be assured that your credit is good.

Finally if you do a credit check yourself it doesn’t leave a footprint on your credit file, however if you do a check through a bank it will.

A death in the family can have serious financial consequences.  The basic role of life insurance is to provide financial support. It can also pay off an individual’s debts when they die.

Many people think of life insurance as providing a lump sum. However it can, depending on the detail of the policy, provide a regular income. This is known as Family Income Benefit or ‘FIB’.

Some policies only provide cover for death and terminal illness. . However policies can be structured to incorporate critical illness cover. This means a policy will pay out if yo are dignosed with a specidied critical illness. This cover can help you if yu are  unable to work and require an income.

Families whether they are reliant on two incomes or not, could consider whether life insurance may be beneficial. If one partner stays at home life insurance can also be tailored to cover the scosts needed to manage the home.  It can also be used to help inheritance tax planning through the use of trusts and various schemes.

Couples who work, but who have no children or other dependents, may decide they don’t need life insurance but opt for critical illness cover on a standalone basis. On the other hand couples who run a business together may take a different view on what provision they need.

But it’s not just couples and families who take out life insurance.

Individuals with no dependents may use life insurance to settle their own affairs on their death i.e. pay for their own funeral expenses or pay off their mortgage.

It’s also possible that a single, high flying professional with elderly parents on low or fixed incomes may decide to take out cover so their parents are provided for.

If you don’t have cover or your circumstances have changed, your first port of call should be to obtain qualified, independent advice.

We speak to people every day looking to save or raise money, or avoid moving home.
In the current property market remortgaging or getting a further advance to avoid moving home is becoming an option. It is not just because mortgage lending is by far the cheapest way of raising cash to fund an extension or improvements to your home in the short term with rates being so low. But rather people are reluctant to make a big move while the property market is static but still want to invest in their home or make it more practical.
Many people assume that with lenders SVRs as low as they can go for the most part, they are saving money. This is not usually the case even with ultra-low interest rates. If your current SVR is base +4% it’s more than likely your lender has current deals under 4%. If you have already paid part of your mortgage off there are also savings to be had on the amount you need to borrow. All things being equal you’ll save money by getting the lowest rate you can. Even although a new deal will have associated costs and redemption penalties , we will take these into account when calculating any savings.

Remortgaging is also a way to raise finance as it allows you to borrow money at a relatively low rate compared to a personal loan although you are adding the debt to the loan over the whole term. Some homeowners have what they see as surplus reserves of equity that they choose to use for other things.

Are You Not the Perfect Mortgage Applicant?

A mortgage is usually the largest financial commitment you will take out during your life time. Its purpose is to purchase a house that you and your family can live in. Life insurance is recommended to cover the amount of the mortgage so that if the worse was to happen and an applicant was to die, then the loan would be paid off so that the survivors can benefit from a mortgage free property.

It is essential to analyse the consequences of what position the family would be in if the worse was to happen. It is not a nice thing to think about but it is worth analysing to ensure that the standard of living that a family is used to can remain if someone in the family was to pass away. It is not always the breadwinner of the family that requires life insurance, consideration should be given to the financial consequences of losing any member of the family.

The type of life insurance that you require will depend on the type of mortgage that you wish to cover. If you have a repayment mortgage then a decreasing term assurance would be the most suitable. This type of insurance reduces along with your mortgage as you pay it off, for this reason it is cheaper than a level term assurance. Level Term assurance stays the same throughout the term of the mortgage and is suitable for interest only mortgages where the mortgage amount stay’s the same.

It is important to make sure that your life cover covers the amount and term of the mortgage. When remortgaging you may change the amount or term of the mortgage, at this stage you should also review the life cover to ensure that it is in align with the new mortgage amounts and term.

It is all about making sure that the minor details are right to ensure that you are properly protected at an affordable price.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
There may be a fee for Mortgage advice. The precise amount will depend upon your circumstances but we estimate that it will be £250