Could you survive 12 months without income?

October 21st, 2010

Here’s how I’d do it:

First, I don’t think many of us have the savings to keep paying the mortgage for months if something switched off our money supply.

Sadly, there are hundreds of people who are plunged into this situation every week – through accident, ill health, or more commonly, redundancy. And the spending review will only make the job market even tougher.

But this is not supposed to be a scare question.

It’s something I ask all clients, because even if you don’t have a large rainy-day fund in place, there’s no need to avoid thinking about such matters.

There are two ways you can be prepared. They can protect your mortgage, your vital expenses and even put a ring-fence around your savings for you.

Why we all need a ‘safety net’

The reality is, our rainy day funds might just not be enough to tide us over for as long as this recession will last. And our savings might be put aside for something else, not just a rainy day.

It used not to matter so much because there’d be Government support for the unlucky few without jobs. But now, you won’t be surprised to learn that’s changing too. Not only are there fewer jobs, but benefits have been slashed too (as we thought might happen). And never mind the spending cuts, accidents or ill health can happen at any time.

More to the point, the breadline is not where any of us want to be – recession or no recession, our families have lifestyles to maintain and bills to pay.

Fortunately, if it feels like you’re walking a tightrope at times, you don’t have to do it without a safety net. Here’s how to set one up.

How to prepare for up to 12 months without income

I’m going to mention two types of cover — there are more, but when we put either of these types of cover in place for clients, it’s remarkable the amount of worry they can take off straight away.

They offer two fundamental ways to keep going for up to 12 months without income, and WITHOUT having to dip into your savings. (That last bit’s vitally important if you’re saving for a housing deposit, either your own or for a son or daughter).

1. Cover your mortgage payments.

This type of protection keeps the roof over your head, whatever happens, for a small premium per month. As soon as you’re out of work for 30 days, you can claim all the way back to day 1 – and it will keep paying out for 12 months. You have the security of knowing roof over your head is safe even if your job isn’t.

2. Cover your whole lifestyle.

This new type of cover lets you keep everything ticking along: bills, cost of living, even rent if you don’t have a mortgage. You decide how much you think you’ll want, and how soon you’ll need it. It’s available to the self-employed as well. It’s surprisingly flexible, which makes it affordable too.

(There’s more detail on each of these here: Two types of protection).

Is this for you?

The first thing is to find out how much it might cost. You’ll need to contact me for a personal estimate (phone and e-mail details below).

There’s no ‘one size fits all’, but there’s a lot we can do to make this an affordable, vital piece of cover for you.

Often, by getting cheaper life insurance at the same time, you can get this protection and still be better off each month as a result!

Then you’ll be able to keep calm and carry on if your income stream gets blocked at any point.

To contact me for an idea of cost:

Ian


Posted in accident and sickness, income protection, lifestyle protection, protection | No Comments »

What you need to know about mortgages this month

October 21st, 2010

October, 2010.

Although there’s no change in the base rate, believe it or not it’s all change in the mortgage market.

And surprisingly, it’s all good news. There are some new deals emerging that make it easier to get a mortgage again…

For high loan to value

Nottingham Building Society is offering up to 80% loan to value mortgages, for purchase or remortgage — and you don’t have to be in a Nottingham branch to get one, as it’s also available through advisers, i.e. me. What’s more, it’s on a surprisingly competitive fixed rate under 4 per cent. Call me for all the details on this one.

For credit difficulties

Until now, if you’ve been in credit difficulties, it would have been nigh-on impossible to get you a good mortgage deal. Now, there’s a new entrant in the market: an advisers-only lender that is accepting more credit problems than other lenders. If you’ve missed bill payments in the past but would like to buy or remortgage, get in touch (below) for details.

For landlords and investors

This will appeal to those of you looking to get back into buy-to-let: Paragon has re-entered the market for buy to let mortgages, and they give you a wide range of options. If you’re planning to rent out a house, they’ll take on multiple occupancies, houses with extra kitchens and bathrooms, and they’ll accept limited companies as mortgage holders.

For when you’re stuck with your current lender

Have you been on the same mortgage for 2 years or more? Unless you’re on a lifetime tracker mortgage, in all likelihood you’re stuck on your old lender’s SVR (Standard Variable Rate), and even in these low base rate times, that means poor value as most lenders are somewhere between 4 to 5 per cent.

If you have equity in your property and are concerned that your SVR will be on the rise, I have an excellent mortgage available that effectively pays you to remortgage now. It’s a completely fees-free remortgage to a fixed rate under 3 per cent, and it even gives you £250 cashback as well.

Alternatively, there’s the ‘Great Escape’: it’s a competitive tracker mortgage, it’s free (no fees), and it promises to let you switch to a fixed rate if you don’t want to track the base rate any more.

Get the lowdown (i.e. free advice)

For the lowdown on all the above mortgages — or for the latest latest news (remember, deals do change quickly) — get in touch with me as follows, and remember, you are not charged for advice:

Regards, Ian.

Regards,
Ian


Posted in adverse credit mortgages, buy to let mortgages, fixed rate mortgages, mortgages, remortgages | No Comments »

Why now is a great time to tie your mortgage lender down for years…

July 11th, 2010

How would you like the certainty of a steady mortgage payment for the foreseeable future?
Get a grip on low mortgage payments

If so, now’s the window of opportunity for tying your lender down to a long-term fix.

Lenders have been chipping away at their fixed rates and bringing some astonishingly good value mortgages to the market. Recently we have seen some of the lowest fixed rates in a lifetime, whether for 2 years, 3 years or 5.

But here’s the thing about today’s mortgage market: rates like that hover for a while, are outrageously popular, then fly away again. They don’t stick around because lenders have still only got so much money in their coffers. Once their funds are spoken for, they price themselves back out of the market again and your opportunity is gone.

Even if you’re on a low Standard Variable rate, it could be time to shift…

Because you can now lock your lender down to rates that could be as low as

  • Under 3% for two years
  • Under 3.5% for three years
  • Under 4.25% for five year fixed rate mortgages

That opportunity hasn’t been there for years.

Why act now? You’ve got to think several months ahead. The chances are strong that today’s products will simply not be there in 2 or 3 months time.

(We’ve already seen some even better rates flash past us in the last two months — from the likes of C & G, Northern Rock, Woolwich — that were all snapped up quickly and ran out. However, new competitive rates have emerged from other lenders and at the time of writing, I can still arrange similarly low fixed rates for most borrowers).

But trackers still offer the outright lowest rates—if you’re comfortable with potential rises

If you’re looking for the absolute lowest initial mortgage payments, the one key way to beat your current rate is with a heavily discounted tracker.

The risk factor with that, of course, is: how long will that last? To take a tracker, you need to be comfortable with the prospect of rate rises.

Our base rate has never been this low, and although it’s been flat for a while there are some signs this phase is coming to an end. The change in direction of public policy as shown by the Budget a fortnight ago, and the recent rises in inflation, point to a time where Bank Base Rate won’t be kept at such a low peg.

What’s your current mortgage rate? Do you know?

Not everyone does! Who reads their mortgage statement? If you’re on your lender’s SVR (Standard Variable Rate), you’re probably only hearing from them every 12 months.

That’s why it’s so easy not to act. But, if you’re not sure of your current rate, I’d urge you to call them today and check. Then give me a call and I’ll compare some options for you.

Because now, it’s a fixed rate paradise. What’s on the market today is unlikely to still be around in six months.

If interest rates go up, which lender in their right mind is going to offer long term deals rate products?

Tie your lender down now — while rates are low!

Regards,
Ian Le Petit

No charge for mortgage advice. Call today to discuss your options, or any points raised in this article: 01275 849059.


Posted in fixed rate mortgages, mortgages | No Comments »

More for less! Example of an insurance review

June 29th, 2010

It’s possible for you to make significant savings on just one insurance policy, particularly if it’s a Life policy.

But for an even better saving, it makes sense to review the whole situation. You see, I often find clients can get get more cover, yet still pay less in premiums overall.

This is what we call an Insurance Review, so I thought I’d give you an actual before-and-after example.

Before:

  • Existing Life & Critical Illness policy with Scottish Widows, paying £157 per month
  • This policy was on a decreasing term—i.e. the benefit runs down as your mortgage is paid off
  • The premium was due for review every 5 years, rather than being guaranteed. With reviewable premiums, the chances are that just when you need the insurance you can no longer afford it.

After:

Reviewing the situation above, this turned out to be a better all-round solution:

  • Two separate Life Insurance policies providing £120,000 cover each
  • Two Critical Illness policies covering up to £30,000 each
  • Guaranteed premiums, so they can’t go up in price for 19 years
  • A 4-policy package for £131 per month.

Reduced cash – improved cover

That’s £26 a month saved for starters (£312 a year!) – and what’s more, the cover is better. That’s because the life insurance was arranged as Level Term cover: when needed, it will not only repay the mortgage but also give the client a cash lump sum on top.

And although it’s possible to shop around single-handed, so many people use an adviser for the simple reason: who’s going to tell you about the small print? You want insurance that will pay out when you need it.

You can get an insurance review with no fee or obligation, by contacting me one of the following ways:

Phone: 01275 849059 | 07788 418119
E-mail: ian@spotonmortgages.co.uk
Or contact me online.

Regards,
Ian Le Petit


Posted in home insurance, life insurance, lifestyle protection | No Comments »

The key to surviving the austerity period?

June 25th, 2010

Protect what you earn, and conserve what you’ve got.

Thanks to the post-recession state of public finances, there’s a bigger chance of a major shake-up in the job market over the next 24 months than there has been in a decade.

What should you do to be prepared?

  1. Review your insurances. If you’re paying too much for life cover, or for buildings and contents, you could cut these back and make room for redundancy protection
  2. See whether your life policy includes critical illness. Employers are less likely to extend voluntary sick pay when the whole economy is under pressure. Critical illness need not be expensive; some insurers have cut premiums by over 20 per cent.
  3. Act before it is too late. If you are going to cover yourself against loss of income, get a quote before redundancies are inevitable. Protection policies tend to be void if planned job losses have already been announced.

Whereas once the benefits system might have protected you, now that’s being cut back. Not only is the level of mortgage relief being reduced by almost a third, this relief also won’t start for at least 9 months—leaving you in danger of missing mortgage payments, losing your credit rating and even your home. So the onus for protecting your family’s home and lifestyle is transferring back to the individual.

My job is to help you get prepared, get the right cover in place, and pay less for the financial products you need. In other words, dealing with the economic realities whatever phase of the market we’re in.

Drop me a line for an example quote — or call me on 01275 849059 — and I’ll provide sample quotes on any product you’re thinking of including in your financial survival toolkit.

Regards,
Ian Le Petit


Posted in income protection, lifestyle protection | No Comments »

Why the Emergency Budget packs two delayed punches…

June 24th, 2010

…and what you can do to protect yourself.

What did you think of George Osbourne’s emergency budget? To some, the economic medicine has a sharp taste with the 2.5% VAT increase. But I’ve heard the view from some people that the VAT rise was expected and they feel that the budget’s main news is not as bad as they feared.

That’s because only one-fifth of the tough decisions have emerged so far.

The real blows of this budget are being delayed until after the Public Spending review.  So the first delayed punch won’t be struck for three months at least…

#1. The Public Spending Review in October will detail planned cuts to specific public services.

That’s when we get to see how much these cutbacks hurt the nation. As well as cutting jobs in the public sector directly, there’ll be a knock-on effect on the rest of the economy.

Many private sector workers have reassured themselves that their jobs are safe. No one knows this for certain. The supply chain for the public sector reaches far and wide, and customers of customers could indeed see a downturn in orders.

It’s estimated that £23bn cuts in major projects could cost 500,000 jobs

Some of these will be offset by jobs created in expanding areas of the economy, which is great news. However, opportunities will favour those with specific training. As anybody who’s been out of work will appreciate, it’s not easy to turn around your career at the same time.

What’s the second punch? As well as public sector job cuts and knock-on redundancies, you’ll now get less of a safety net from the state…

#2. Benefits for the unemployed are being hammered

Unemployed homeowners can currently claim a generous amount of mortgage payment support — but that’s due to come down quite dramatically, in line with last year’s fall in base rates. On top of that, this budget also announced a three year freeze in unemployment benefit:

  • Government Support for Mortgage Interest (SMI), currently £507 per month on a £100,000 mortgage, will be cut to £306 per month
  • Unemployment Benefit, and also Child Benefit, won’t be increased for another 3 years

Meanwhile there are no exemptions to the VAT increase. It’s not until January, but this affects everyone who pays for goods. There’s an even bigger increase in Insurance Premium Tax: it goes up next year by one-fifth.

Is it all bad news?

I’m sorry if that’s what this story seems to be so far! We advisers tend to deal with people in changing financial circumstances, so I’m aware of how the loss or reduction of a salary can affect people, and indeed how often decisions like these are sprung on you with little warning from management.

But there’s better news: there are two ways you can protect yourself (find out more here).

The bottom line is that if you want to protect you and yours, in a time of shrinking support from the state, it’s possible, and it needn’t add to your monthly outgoings if you review other insurance costs at the same time.

It also doesn’t have to be long term: when you no longer need it, just cancel.

The crucial thing is that you act before these delayed punches hit home!

Ian Le PetitRegards,
Ian Le Petit

Tel: 01275 849059
E-mail: ian@spotonmortgages.co.uk

Related link: Two ways to protect your income and outgoings


Posted in income protection, lifestyle protection, public policy | No Comments »

How you can extend home borrowing without giving up your low mortgage rate

June 22nd, 2010

Self-certification secured loans: an answer to a debt dilemma?

If you’ve been wondering whatever happened to flexible, affordable borrowing for homeowners, don’t worry — the credit crunch hasn’t completely killed it off.

In fact, a surprising niche has opened up that has benefited several of my clients, particularly the self employed.

Imagine the following dilemma:

  • You don’t want to move your mortgage. Why would you? You’re enjoying the lowest mortgage rates ever—perhaps a tracker, or a 2.5% Standard Variable Rate…
  • Or for other reasons, you can’t move your mortgage without suffering a financial penalty. Perhaps you’re self employed, and the end of self-cert mortgages means you have to stay put…
  • But you do want to settle other, more expensive borrowings. For example, your credit card balance costs you 18% APR, and a balance transfer won’t be much help: there’s a 3% fee, and you won’t get it paid off in 6 months anyway.

Traditionally the route you’d take would be consolidation—extending your mortgage to swallow up those more costly debts. However, if you don’t want to lose out on your current low mortgage rate, the alternative mortgage deals available to you at the moment are probably not worth it.

Are you in a dilemma just like that? If so, the answer could be a little unexpected…

Secured loans make a surprise comeback

They almost died out during the credit crunch, but now a niche has opened up and affordable secured loans are available again—provided you know where to look.

The source of funds this time round is private investors, not banks. And with today’s unusual combination of low rates, too-good-to-abandon mortgage deals and the high cost of consumer credit, they could be the best option for tying up existing amounts you owe.

You can borrow upwards of £25k and if you have a good credit history (not necessarily spotless, just no big black marks), the rates can be very competitive. They are priced according to circumstances, so call me for a quote.

And there’s even better news for the self-employed…

Also available with self-certification

Yes, self-cert is back. It might be non-existent in mortgages, but it’s possible in secured loans.

This includes pure self-certification, i.e. with no records whatsoever, which may cost you slightly more in interest but will still open an avenue for borrowing against your home equity where none existed before.

Ask questions, see examples…

So, if you want to

  • keep your mortgage rate
  • pay off card debts
  • borrow upwards of £25k
  • not be tied in to a long arrangement

I can show you examples of how this secured loan scenario can work for you. Call me today on 01275 849059, or e-mail me to enquire.

Regards,
Ian Le Petit


Posted in debt, mortgages, secured loans | No Comments »

Landlords: want an easier way to finance light refurbishment properties?

June 16th, 2010

House prices are low at moment, so if you’re interested in buy-to-let, now is the ideal time to increase your property portfolio.

However, if the condition of the property is such that you can’t let immediately, mortgage companies often won’t lend until the improvements are made.

Now there’s an answer to that problem. One of the lenders I deal with has introduced a light refurbishment mortgage deal for landlords.

It’s ideal for when you need to improve a bathroom, kitchen or even just the decor of a home before you can rent it out.

Here’s how it works:

  • Two valuations are carried out: one in today’s condition, one in refurbished condition
  • The rental value is assessed on the refurbished price
  • You buy the property at the non-refurbished price
  • You then have 3 months to carry out the work
  • On inspection, the mortgage company will release up to 70% of the new (refurbished) value.

This is a great option for landlords since it covers your costs for doing the home improvement work—and can even provide a spot of immediate profit as well.

One company does this kind of mortgage and I have arranged several of them to date. Call me today on 01275 849059 (or send me an e-mail) and I’ll explain the product in more detail.

Regards,
Ian Le Petit


Posted in buy to let, mortgages | No Comments »

The beginning of a good habit…

June 9th, 2010

For years I’ve kept my mortgage and financial knowledge just between me and my clients. Now, with the success of my e-mail newsletter, I’m publishing my thoughts and articles online for all to see.

The purpose remains the same: to help you make better informed decisions about your mortgage and money matters.

And it will become a habit. Not a daily one—but like any financial habit worth forming, it’ll be regular!

If there’s anything you see here that needs discussing, feel free to give me a call: 01275 477159.

Thanks for reading.

Regards,
Ian Le Petit


Posted in Uncategorized | No Comments »