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With so many factors currently having an impact on
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to combat inflation!
(Source: OECD, May 2010)
And whenever the
time does come to tackle
inflation, the Governor of the
Bank of England in his Mansion
House speech in June 2010 hinted
that raising the Base Rate at some
point in the future would be their
initial route ahead of other options.
So whilst a good number of you will be
enjoying some of the lowest interest rates
you’ve ever encountered, it makes sense to
take advice to see how you can meet any
borrowing needs, not just for 2010, but into
the longer-term.
In the shorter-term, the best option may be
to stay with your existing mortgage deal, but
you must be mindful that at some stage the
Base Rate may start going up. And when that
happens the lenders are likely to rapidly
reprice their deals. To possibly avoid losing
out, this may require you to anticipate when
a rise could occur, in order to secure a Fixed
or Variable deal that best suits your needs.
Overall though, we do seem to be rates will move upwards, and the ability of
seeing an improvement in this a borrower to meet the Lender’s criteria to
py a new
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market commentary, May 2010; Moneyfacts, July 2010)
Base Rate may not move upwards for a
House prices too, have seen a recovery, while, there are also a number of current
with the average house price of £170,111 in factors that could influence an earlier
June 2010 being 8.7% up year-on-year - and upward trend. For example, inflation
only around 9% lower than the peak price currently stands at 3.4% (June 2010), which Impact of the Budget
of October 2007. (Source: Nationwide, June 2010)
is well above the 2% target. And fuel prices, Belt tightening is the order of the day, with
And with the UK not building anywhere along with the unknown longer-term effects some initiatives directly affecting the housing
near enough new homes each year, this will of the Quantitative Easing programme of I and mortgage marketplace.
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OFFEthe
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the big issues continue to be when interest there, such as the Organisation for Economic
➔ (contd on back page)
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BROKER SUPPORT
RELAX...
it’s under
control
all parties. Hopefully, this will greatly
reduce the amount of time you may need
to devote to your application.
In the same way that you’ll seek the professional
advice of doctors, lawyers and tradespeople, it
makes sense to use a professional to help you
through the mortgage and protection maze.
»
And you won’t be alone, as almost
two-thirds of all mortgage lending
in the first quarter of 2010 went through
brokers, and this is why…
Protect your credit rating
Each time you apply for credit, this may
be recorded on the files held by the credit
reference agencies. It could result in a
downgraded rating - which may ultimately
make the cost of borrowing higher for
you. As we should have a better steer on
where you may secure an offer, we can
limit the number of Lenders that need to
be approached.
status - with simple or complex income
streams.
And unlike going direct to a High
Street Lender - who will offer their own
(Source: Intermediary Mortgage Lenders Association, May 2010)
range of mortgage and protection
products, we can provide you with all
Market knowledge
relevant information across the wider
Not just mortgages...
Lenders these days are more discerning
marketplace.
This
will
enable
you
to
make
As you may be aware, we can also cover a
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There are numerous protection policies out there to help
provide cover should you lose your job, suffer an accident, or
have a long-term or life-threatening illness. Of course, you
may recover from all of the above, return to work and get your
finances back on track. But what if you die? There’s no
second chance!
That’s why it’s vital that you (and your spouse) have some
life cover in place, in order to protect the ones left behind.
And there’s no excuse for not considering taking out life
cover, with rates lower now than they were five years ago!
For example, if you were a 39 year-old, non-smoking male,
looking for £100,000 of life cover, over a 20 year term,
then it may cost around £12.57/month today against
Ltd
£16.12/month five years ago! And if you started the same
policy at age 29 - then the price would be almost half, at just
£7.33/month - less than the price of a weekly take-away coffee!
(Source: Moneyfacts; comparison of the average premium from over 20 firms;
June 2010 vs. June 2005)
And once you do set up life cover, consider placing the
policy in trust, to help ensure it’s not added to the value of
your estate for inheritance tax.
As with all insurance policies, terms, conditions and exclusions will apply. Any premium quoted is an estimate only and
that the actual premium will depend on individual circumstances.
The Financial Services Authority does not regulate Taxation or
Trust advice.
Buy-to-LLet
The availability of Buy-to-Let mortgages
were one of the biggest casualties of the
economic downturn - but have made a
return over recent months.
»
There has been a greater desire to
And, of course, the recent rise in Capital the same view at the end of 2009. And
start lending again to the buy-to-let Gains Tax (CGT) from 18% to 28% for Paragon Trends research shows that the
market. This viewpoint has also been higher rate taxpayers, may temper the number of landlords wanting to purchase
reinforced by an increasing number of enthusiasm for those looking for (or property has nearly doubled, with 21%
Lenders returning to this sector, coupled who have enjoyed) ‘capital appreciation’. looking to do so in Q3 of this year, against
with a growing number of products on Albeit CGT does remain at 18% for basic just 12% in Q2.
offer - with slightly better interest rates and rate taxpayers. Whatever your position (Sources: ARLA, March 2010; Paragon, June 2010)
less hefty fees.
though, your initial investment in buy-to-let
Of course, it’s not back to the old days should really be driven by securing a regular All fairly positive, but it’s still a complex
when property prices were roaring upwards, rental income, and to view it as a longer- market in which to secure funding and
coupled with a more relaxed lending term investment.
operate within, so do get in touch to find
environment. So you’ll still have to do your
So don’t forget the positive signs out out how we can help.
homework, whether you’re an existing there. There continues to be good tenant
landlord or are keen to enter this demand, coupled with the level of both rent The Financial Services Authority does not
“I had voids stabilising. The Q1 regulate most Buy-to-Let mortgages.
marketplace. Particularly as Lenders are arrears
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This calculator only provides a guide to monthly
payments and does not guarantee eligibility for a
mortgage. The actual amounts that you may have to pay
may be more or less than the amounts shown. Please
contact us for a personalised Key Facts Illustration.
03
YOUR PROPERTY MAY BE REPOSSESSED IF YOU
DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
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CALCULATOR
Bridging Loans are a specialist area of the marketplace and can be
an option for people looking to secure short-term funds quickly albeit it can be a more expensive form of borrowing.
These funds could enable borrowers to help obtain a property (at
auction perhaps), or make enhancements to their current
property, while waiting for a loan from their mortgage
lender or other source to come through.
The Financial Services Authority does not
regulate some aspects of Bridging Loans.
04
YOU C
AN CH
OO
FROM
3 STO SE
CHOIC
RY
ES FO
(OPTI R PAGE 4
ON 1)
Will YOU?
WON’T YOU?
A massive two-thirds of people* never get round to making
a Will, yet it may create enormous problems for the nearest
and dearest if there isn’t one.
(Source: *Advicenow, February 2010)
Of course, we may assume that when the worst happens, the
law would ensure our estate went to our loved ones anyway.
But, unfortunately, this may not always be the case.
For example, dying Intestate (without a Will) may mean that
whilst your spouse (or registered civil partner) will be the first
person entitled to the estate, they may not inherit all of it. And
it’s even worse for unmarried couples! And without a Will in
place the whole process is slowed down dramatically, often
meaning that the family left behind may face financial hardship,
at the worst possible time.
You can also make use of the numerous IHT-exempt gift
allowances during your lifetime. And once maximised, you
can make further gifts, which will generally be free from IHT,
providing you survive seven years from the date of the gift.
Trusts
You can set up a Trust in your lifetime or in your Will. A Trust is
another legal arrangement and common uses include the following:
o to possibly reduce the tax liability, for example, by placing
insurance policies in trust.
o to protect beneficiaries who might be too young to handle
their affairs.
o to protect someone who can’t handle their affairs because
they are incapacitated.
o to help lessen a couple’s liability if either has to go into
long-term care.
And it
works!
st maj
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ority o
have c
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Additionally, if you have young children, you would surely want
Theafter.
to set out in a Will how they should be looked
va
That’s why writing a Will should be a key aspect of your estate
M consideration
this information
initially seem quite daunting (and
ntinueWhilst
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Tax (IHT) and the use of Trusts to further assist in tax planning.
l
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iness.
The next step
their toe in the property selling market.
If you decide to take action, then you need to
Capital Gains Tax (CGT) stays at 18% for consider if you want the ‘certainty of knowing
basic rate taxpayers, but rises to 28% for what you’ll be paying’ through a Fixed Rate.
higher rate taxpayers, which was actually Where either a 2-3 year deal or possibly the
5 year+ deals might be for you. Alternatively,
much lower than initially speculated.
Of course, the increase in VAT from you may want to track the Base Rate, for
17.5% to 20% from early January 2011, will example, through a Variable Tracker deal.
Remember, even if the Base Rate doesn’t rise,
have an impact on purchasing.
opy wifrom the it doesn’t mean that Lenders won’t increase
Elsewhere, there areCrumblings
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amount will be paid off. In some cases, to find out more...
slightly higher rates are even being applied You may have to pay an early repayment
to ‘Interest-Only’ against the ‘Repayment’ charge to your existing lender if you
option for the same product offering.
remortgage.
■ We cover mortgages, insurance and protection products along with a number of
other financial areas, so do contact us if you’d like to discuss your financial needs:
Tel: ???? ??????? Email: ??????@??????????? Web: ???????????????
Your home may be repossessed if you
do not keep up repayments on your
mortgage.
There may be a fee for arranging a
mortgage and the precise amount
will depend on your circumstances.
This will typically be £x/?% of the
mortgage. Or, alternative suitable
copy to go here.
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and W Statement
change arnings wou
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■ Every care
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and
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details and,
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s before
where necessary, seek legal tadvice
■ The contents of this newsletter are believed to
be correct at the date of publication (July 2010).
entering into any transaction.
■ The information in this newsletter is of a
general nature. You should seek professional
advice tailored to your needs and circumstances
before making any decisions.
Published by BlueStone Publishing. Email: [email protected]
Copyright: BlueStone Publishing Limited ©2010. TM21
➔ (contd from page 1)
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04
YOU C
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FROM
3 STO SE
CHOIC
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ES FO
(OPTI R PAGE 4
ON 2)
Release value from
YOUR HOME
If you are ‘property rich but cash poor,’ over 55 and
in your own property, then Equity Release may be a
way of turning bricks and mortar into cash for you.
Equity Release plans have improved enormously in recent years
and members of the industry trade body ‘Safe Home Income
Plans’ (SHIP) ensure that certain key safeguards are observed to
protect customers.
All plans provided by SHIP members allow customers to stay in
their property for life, provided the property remains the main
residence. Additionally, all schemes carry a ‘no negative equity’
guarantee, which means that customers will never owe more
than the value of their home and no debt will ever be left to the
estate.
The Financial Services Authority also regulates both ‘Lifetime
Mortgages’ and ‘Home Reversion Plans’ - the two principal forms
of Equity Release.
Lifetime Mortgages
This is where you take a loan out against the value of your
property but you still retain ownership. There are normally no
repayments to make and the loan is redeemed when you die or
move into long-term care. So, the outstanding amount owing in
interest payments will roll up for as long as you live in the property. This interest amount along with the original sum of money
borrowed will have to be repaid eventually by your estate.
Home Reversion Plans
This is where you sell all or part of your home to a home
reversion company, thereby giving up all or part of the ownership. There may be nominal payments to make and the loan is
redeemed when you die or move into long-term care.
And it
works!
...
ority o
have c
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b
The amount you can borrow normally depends on you (and
your partner’s) age and health, value of your property and - in
the case of Home Reversion - the percentage
Theof your
vasproperty
t maj
you want to sell.
This means that any percentage of the equity in the property
that hasn’t been sold can be left to your estate, which would
also benefit further should there be an increase in the market
value of your home.
is a Lifetime
or Home Reversion Plan. To underMost on
If you still have an outstanding mortgage
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it could
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their toe in the property selling market.
If you decide to take action, then you need to
Capital Gains Tax (CGT) stays at 18% for consider if you want the ‘certainty of knowing
basic rate taxpayers, but rises to 28% for what you’ll be paying’ through a Fixed Rate.
higher rate taxpayers, which was actually Where either a 2-3 year deal or possibly the
5 year+ deals might be for you. Alternatively,
much lower than initially speculated.
Of course, the increase in VAT from you may want to track the Base Rate, for
17.5% to 20% from early January 2011, will example, through a Variable Tracker deal.
Remember, even if the Base Rate doesn’t rise,
have an impact on purchasing.
opy wifrom the it doesn’t mean that Lenders won’t increase
Elsewhere, there areCrumblings
ll be u
if nethat
pd tedStandard Variable Rates!
Financial Services Authority
ede‘Interest,
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c
on page 3, and see how any
will look closer at - with some Lenders already ycalculator’
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requiring more details on how the capital possible rises may affect you and talk to us
amount will be paid off. In some cases, to find out more...
slightly higher rates are even being applied You may have to pay an early repayment
to ‘Interest-Only’ against the ‘Repayment’ charge to your existing lender if you
option for the same product offering.
remortgage.
■ We cover mortgages, insurance and protection products along with a number of
other financial areas, so do contact us if you’d like to discuss your financial needs:
Tel: ???? ??????? Email: ??????@??????????? Web: ???????????????
Your home may be repossessed if you
do not keep up repayments on your
mortgage.
There may be a fee for arranging a
mortgage and the precise amount
will depend on your circumstances.
This will typically be £x/?% of the
mortgage. Or, alternative suitable
copy to go here.
For Equity Release products our fee is
£x/?%. If different from fee above.
Fee
and W Statement
change arnings wou
ld in
■ Every care
is taken
the information
depthat
eis naccurate
ersonnewsletter
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ThepMortgage
at
the time
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or nall information
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figures are
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q
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always make enquiries
and
check
details and,
e
n
s before
where necessary, seek legal tadvice
■ The contents of this newsletter are believed to
be correct at the date of publication (July 2010).
entering into any transaction.
■ The information in this newsletter is of a
general nature. You should seek professional
advice tailored to your needs and circumstances
before making any decisions.
Published by BlueStone Publishing. Email: [email protected]
Copyright: BlueStone Publishing Limited ©2010. TM21
➔ (contd from page 1)
Can’t Work!
Those difficulties can come in many guises, ‘an accident’, ‘longterm sickness’, ‘a life-threatening illness’ or even ‘redundancy’.
Understandably, you can’t plan for every possibility, but you do
need to prioritise where you feel you may need some form of
insurance cover.
Protect your biggest investment
Your home is probably your biggest financial investment and one
that possibly requires a decent chunk of your salary each month
in mortgage payments. So in these uncertain times, an employee
(or even those that are self-employed or on a contract) would
be well advised to consider taking out Mortgage Payment
Protection Insurance (MPPI).
MPPI protects your mortgage repayments, generally up to 12
months, if you are unable to work due to accident, sickness or
unemployment. With some policies allowing you to also cherry
pick which of the above elements you’d like to be included in
your cover. Although, the ‘unemployment’ option would be
more problematic for the self-employed and contract workers.
Policies, prices and what they’ll payout for will vary, so it makes
sense to talk to us to see what’s on offer, rather than just opting
for what the Lender suggests.
In this period of restraint, echoed by the
recent Budget, you may find that you can
rely less and less on the State or even your
Employer to provide for you should you
face difficulties from being unable to work.
your monthly outgoings. It pays you a monthly income if you
are unable to work due to accident or sickness, however long
that may be. In extreme circumstances it may be until your
normal retirement date.
In some cases, unemployment cover may also be offered as a
bolt-on. Although, most companies may only allow cover of up
to 24 months for the unemployment element, compared to the
main Income Protection policy.
Income Protection is a complex product so it is essential that
you take advice. Policies vary considerably with regard to premiums, the delay before payments start (in the event of a claim)
and the exact extent of cover.
A
nd it w
Protect the mortgage and more…
The va
orks!..
st maj
.
ority o
have c
f b
M
o
Alternatively, Income Protection (also known as Permanent
Health Insurance - PHI) is designed to protect all or some of
➔ (contd from page 1)
Alternatively, you may not be able to work for a period of time
were you to suffer a life threatening medical condition such as
some forms of cancer, stroke or heart attack. In which case if
you have Critical Illness Cover in place, then you would receive
a lump sum payout if your condition is specified in the policy
and you survive r
generally
ok for 30 days from the date of diagnosis.
nti
ost say
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ctivity and/or layou 2010.
from
Blu
with
t be
eStone
o
Publish ut prior perm used in
The next step
ission
ing.
their toe in the property selling market.
If you decide to take action, then you need to
Capital Gains Tax (CGT) stays at 18% for consider if you want the ‘certainty of knowing
basic rate taxpayers, but rises to 28% for what you’ll be paying’ through a Fixed Rate.
higher rate taxpayers, which was actually Where either a 2-3 year deal or possibly the
5 year+ deals might be for you. Alternatively,
much lower than initially speculated.
Of course, the increase in VAT from you may want to track the Base Rate, for
17.5% to 20% from early January 2011, will example, through a Variable Tracker deal.
Remember, even if the Base Rate doesn’t rise,
have an impact on purchasing.
opy wifrom the it doesn’t mean that Lenders won’t increase
Elsewhere, there areCrumblings
ll be u
if nethat
pd tedStandard Variable Rates!
Financial Services Authority
ede‘Interest,
d, thr theiraown
Only’ mortgages may be something
they ouSo
ghhave
the isthat
o
u
ta look at our ‘mortgage payments
s
u
e
c
on page 3, and see how any
will look closer at - with some Lenders already ycalculator’
cle
requiring more details on how the capital possible rises may affect you and talk to us
amount will be paid off. In some cases, to find out more...
slightly higher rates are even being applied You may have to pay an early repayment
to ‘Interest-Only’ against the ‘Repayment’ charge to your existing lender if you
option for the same product offering.
remortgage.
■ We cover mortgages, insurance and protection products along with a number of
other financial areas, so do contact us if you’d like to discuss your financial needs:
Tel: ???? ??????? Email: ??????@??????????? Web: ???????????????
Your home may be repossessed if you
do not keep up repayments on your
mortgage.
There may be a fee for arranging a
mortgage and the precise amount
will depend on your circumstances.
This will typically be £x/?% of the
mortgage. Or, alternative suitable
copy to go here.
Fee
and W Statement
change arnings wou
ld in
■ Every care
is taken
the information
depthat
eis naccurate
ersonnewsletter
d
ThepMortgage
at
the time
e
n
t
alHowever,
onand
of going to press.
or nall information
t
resubject
w
figures are
to changeeand
you
should
o
q
r
u
k
irem
always make enquiries
and
check
details and,
e
n
s before
where necessary, seek legal tadvice
■ The contents of this newsletter are believed to
be correct at the date of publication (July 2010).
entering into any transaction.
■ The information in this newsletter is of a
general nature. You should seek professional
advice tailored to your needs and circumstances
before making any decisions.
Published by BlueStone Publishing. Email: [email protected]
Copyright: BlueStone Publishing Limited ©2010. TM21
04
YOU C
AN CH
OO
FROM
3 STO SE
CHOIC
RY
ES FO
(OPTI R PAGE 4
ON 3)
in 2
tr 0
d od %
is u
co c +
u to
n ry
t
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