by admin | Jun 4, 2023 | Insurance News
After a particularly difficult and bumpy few years and with uncertainty still on the horizon, now seems an appropriate time to review your financial situation. This is particularly important for people with children to ensure that loved ones will be protected, no matter what life throws at them. Having the right insurance in place is often key to making this happen.
The basics of life insurance
Life insurance comes in two main forms, whole life, and term. Whole-life policies remain in effect indefinitely. This means that, as long as the policyholder keeps making the payments, their heirs are guaranteed to receive a payout eventually. Term policies are only valid for a specific period.
If the main purpose of your life insurance is to protect children in the event of your death, then term assurance may be the more practical option. It will ensure that your children will be provided for until they are adults and hence can provide for themselves.
In addition to ensuring that you have a suitable level of insurance coverage, you may want to think about how the proceeds will be paid. Putting the money into a trust would give you some level of control over how it is spent. It would also separate the insurance payout from your main estate. This reduces the taxable value of your estate and hence could reduce your inheritance tax bill.
Life insurance is for more than just the “breadwinner”
Both parents need life insurance, even if only one earns an income. The homemaking parent provides childcare, which has an economic value. It may even be appropriate to extend life insurance cover to the children themselves. The death of a child can lead to expenses for the whole family (e.g. funeral expenses), and the cost of cover is likely to be minimal.
Last but not least, if you depend on relatives for childcare, e.g. grandparents, then it may be advisable to look at life insurance for them too. This may be more expensive (due to their age), but you may only require a short-term policy e.g. until they go to school.
Renewing life insurance is a good opportunity to review legal documents
Ensuring your children are protected means more than just ensuring their financial well-being (although this is certainly a good place to start). You’ll also need to think about who would care for them practically if you were no longer here.
It is highly advisable to document your wishes in your will so that they are both clear and legally enforceable. If you do not, then your children may end up in the care system until there is a legally-binding agreement on their care. This agreement may not be what you or your family would have wanted.
On a similar note, renewing life insurance is also a good time to look at powers of attorney (both financial and medical). This can, indirectly, help to protect your children since it can make life a lot easier for anyone trying to juggle looking after you with looking after them.
Other forms of insurance
Your death isn’t the only issue that could impact your children. In fact, anything which impacts you, your partner and your home can have a negative impact. This means that, if at all possible, you should think through potential issues and take out insurance to protect against them. Types of cover you may wish to consider might include:
- Family Income Benefit
- Critical Illness Cover
- Income Protection
- Mortgage Protection
- Private Medical Insurance
- Rent Protection
- Limited Company Relevant Life Insurance
Contact Coombes & Wright, we can help you source protection cover that meets your needs.
Book your free no-obligation initial consultation
The FCA does not regulate wills and power of attorney – For wills, power of attorney, and payment protection insurance, we act as introducers only.
by admin | Jun 4, 2023 | Mortgage News
There are many reasons why saving for a deposit is harder than ever before. The rising cost of living, covid, and Brexit have all negatively impacted. However, getting your foot on the property ladder is not an impossible dream. Here are some tips on saving for a mortgage deposit.
Use the LISA if you qualify
If you’re a first-time buyer aged between 18 and 39, you are eligible to open a Lifetime ISA account. You can pay up to £4,000 each tax year into the account. The government then adds a 25% bonus (£1,000 maximum). You must use your LISA towards purchasing your first home or to fund your retirement. Under current rules, you can have a LISA and a regular ISA. This means that your savings and/or investments will get even more protection from tax. For investments, we act as introducers only.
See if you qualify for further help
Central government has various schemes to help would-be housing buyers, especially first-time buyers. Local authorities may also have their own schemes. Check availability and eligibility in the location where you want to buy.
Be flexible about your exact location
Many buyers only consider homes within reasonable commuting distance of their place of work. However, it can be beneficial to keep your options open and consider what is ‘reasonable’.
What “reasonable” means in practice depends partly on your outlook and lifestyle, partly on your transport options and partly on how often you have to go into your office and place of work. If you’re fully or largely remote, it may be worth looking at areas further afield or with limited transport options, often reflected in the local property prices.
Buy a property in need of upgrading
Looking for a property needing upgrading is a bit like thrifting in charity shops. There are definitely bargains to be had, but you need to be alert and quick. You also need to be realistic about your goals and totally honest about what you can and can’t do yourself.
Secondly, be clear about how long it will take you to make the necessary changes and the property habitable. This would typically mean ensuring that it was structurally sound (wind and watertight) and had essential utilities. You might be able to live without heating in summer, but in winter, it’s a different story
Thirdly, be realistic about your budget for the updates. Buying a “fixer-upper” isn’t necessarily more affordable overall than buying a home in pristine condition. It just means that you can pay a lower upfront cost, thus making your deposit savings go further. You can then do upgrades yourself or pay for someone else to do them out of your ongoing income.
Consider downsizing while you save
If you can “make do and mend” with a smaller property while you save, you may be able to build a deposit more quickly. Similarly, you might want to consider moving to a more affordable location. A cautionary word, ensure this move doesn’t excessively increase your travel and living costs.
For help and advice about getting on the property ladder, contact Coombes & Wright Mortgage Solutions. We offer free initial consultations without obligation.
Book your free no-obligation initial consultation
For investments we act as introducers only
by admin | Jun 4, 2023 | Mortgage News
There are plenty of online mortgage calculators to help you figure out the likely cost of your mortgage. It is, however, useful to understand how the calculations are worked out and the influencing factors you need to consider. Here is a quick guide to help.
Calculating the total cost of a mortgage
It’s vital to remember that you can only compare mortgages fairly if you look at their total cost rather than just the headline interest rate. Sometimes this will involve making estimates, but you should be at least fairly confident that your estimates are accurate. If you’re unsure how your finances will look over the next few years, maybe a mortgage is not for you right now.
The main factors influencing the cost of a mortgage are:
- The interest rate
- The term and amortisation period
- The initial set-up fees
It’s also advisable to know the Early repayment charge.
The interest rate
Interest rates can be variable or fixed. Variable rates track the base rate set by the Bank of England. In principle, this means that they have infinite scope to go up but can only go down as far as zero (unless the BoE did introduce negative interest rates). In practice, mortgage lenders may choose to set a minimum rate that would apply regardless of how low the BoE sets the base rate.
Fixed rates give you security, but they do not necessarily work out more affordable than variable-rate deals. For example, they may have added fees that increase the price, especially if you add them to the loan. You will then have to pay interest on the fees too.
It’s also worth pointing out that fixed-rate mortgages are fixed in both directions. In other words, if interest rates go down, you still pay the same fixed rate.
The term and amortisation period
A mortgage term is essentially the length of any initial deal e.g. a five-year fix. The amortisation period is the length of time it will take you to pay off the mortgage. Both will play a role in the cost of a mortgage.
The mortgage term determines when you must choose between remortgaging or going on your lender’s standard variable rate (SVR). The length of your mortgage amortisation period influences how much interest you will pay overall. In short, if everything else is equal, a mortgage with a shorter amortisation period will be more economical than a mortgage with a longer amortisation period.
The initial set-up fees
The initial set-up fees can be divided into fees you pay regardless of the lender (e.g. valuation) and fees that depend on the lender. It’s useful to know both so you can judge the cost of remortgaging. You also need to know if you can pay these fees upfront or if you’ll need to add them to your loan. If the latter, you’ll need to factor in the cost of the interest payments.
The early repayment charges
You may plan to pay off your mortgage early, but life doesn’t always go to plan. If that sounds depressing, remember luck can be both good and bad. Luck is, however, a part of life, or, more formally, your circumstances can change. If they do, you may need to exit your mortgage before the term ends, so it’s advisable to know how much this will cost.
Overall
These are the main financial points you should note. There may, however, be other factors you want to consider. For example, you might want to look for a mortgage that comes with a key benefit, like some level of flexibility with payments. It’s absolutely fine to take this into consideration.
Contact Coombes & Wright Mortgage Solutions for friendly, local, and flexible advice. We help people at all levels of the property ladder, from first-time buyers to homeowners remortgaging and property investors.
Book your free no-obligation initial consultation
by admin | Feb 11, 2022 | Insurance News, Mortgage News
It is possible to be too careful. At the same time, the cost of not being careful enough can be ruinous. You, therefore, need to use protection mindfully. In particular, you need to review it regularly so that your cover always meets your needs. Here are some tips to help.
Medical bills can be extremely high
Even though the UK has the NHS, it can still be worth looking at medical insurance. This may allow you to bypass NHS waiting lists. It can also get you access to treatments that might not be available on the NHS. Dental insurance might also be worth considering for essentially the same reasons.
If you have pets, any medical treatment they need will need to be funded privately. Insurance can help a lot here. However, keep in mind that insurers may decline to cover pets for conditions known to be a common risk for their breed.
They may also decline to cover chronic medical conditions (beyond the initial treatment). This is another good reason to ensure you either buy a pet from a reputable source or adopt one from a shelter.
Legal bills can be crippling
One of the harsh realities of life is that it is entirely possible to be blamed for something that wasn’t your fault. An even more brutal reality is that defending yourself can be very expensive. In fact, without insurance, it can be too costly to be practical.
Any time you have legal exposure, you should think seriously about covering yourself with insurance. Drivers are required to have insurance. Cyclists and pet owners are not but could benefit greatly from it.
Homeowners should take the issue of legal exposure particularly seriously. Quite bluntly, if you own a home, you have an asset. More specifically, you have a valuable fixed asset that can be sold to pay compensation and legal costs. That can make it worthwhile for someone to pursue a case they might otherwise have ignored.
You may need multiple policies for your home
Assuming you’re a homeowner, you’ll need at least two home-related insurance policies. Usually, the building itself is covered separately from its contents. Both policies may (or may not) be issued by the same company, but they will be issued and treated independently.
Buildings insurance
Buildings insurance can be more complicated than you might initially think. For example, if you live in a flat, you must check your liability (if any) for communal areas. You’d then have to make sure that your insurance covered this. This might involve having a standard policy extended.
One of the key points to remember about buildings insurance is that you should insure your home for what it would cost to rebuild, not what it would cost to rebuy. This is because you already own the land. That often accounts for a substantial portion of the purchase price. Insuring your home for more will increase your costs without any gain.
Another point to note is that standard buildings insurance may not cover damage caused by accident (for example, when doing DIY). You may need to extend your policy or take out separate cover
Contents insurance
When taking out contents insurance, you need to check for categories of items that are excluded or limited. For example, an insurer may only cover a certain quantity of cash. They may also restrict cover on items such as jewellery and electronics unless the items you own are individually registered with them.
Home contents policies may also not automatically cover outbuildings such as garages and sheds. Again, you may need to extend your policy if you want to have these protected.
Why use Coombes & Wright Mortgage Solutions?
Coombes & Wright Mortgage Solutions is an award-winning mortgage & protection broker providing local, flexible, friendly advice. Find out more about our protection broker service. We offer a full range of products and provide tailored solutions to fit you and your family’s specific requirements.
We act as introducers for building, content, and pet insurance.
by admin | Jan 13, 2022 | Insurance News, Mortgage News
If you own your own home or are considering buying your first property, you must consider protecting it. After all, it’s what protects you against the elements. Even if you’re renting, it is essential to think about protecting your tenancy. Have a read of our blog with some valuable tips.
Always have an emergency fund
Your emergency fund will cover minor issues and insurance excesses if you’re a homeowner. If you’re a renter, you should ideally have enough money to cover a deposit on a similar property and moving costs to it.
In either case, you should also have enough money to cover unexpected expenses in other areas of your life. These might not be directly related to your housing but could impact your ability to pay your mortgage or rent.
Take insurance seriously
It’s great to have an emergency fund. Realistically, however, the average person will not be able to put aside enough of an emergency fund to cover serious expenses. As a rule of thumb, if something could create significant legal or medical bills (including vet’s bills), then you should at least consider insurance for it. This includes human medical bills for completeness as this will give you options outside the NHS.
You should also consider serious repair bills and if there’s any way you can be exposed to third-party claims for damages. For example, cyclists and pet owners should consider insurance to cover themselves for potential damage claims.
Homeowners should consider buildings insurance, possibly outbuildings insurance, possibly accidental-damage insurance and contents insurance. Renters should look at having their contents insurance.
Last but not least, you should think about protecting your finances. There are policies to assist; speak to an adviser to find the right one for your circumstances.
Insurance and Employment
Your employment status may have implications for your insurance cover. For example, some types of insurance may only be available to employed people.
Likewise, some employers may provide some types of insurance to their employees. For example, many employers offer death-in-service cover. Technically, this is not life insurance; it’s relevant life insurance. However, the end effect is the same from an employee’s perspective. If you die, your designated beneficiaries will receive a payout.
Be aware, however, that the insurance you receive from your employer may not be sufficient for your needs, let alone your wants. Therefore, you need to do your calculations and, if necessary, top it up. Similarly, you’ll need to arrange cover for anyone not employed, even if they’re not directly earning an income.
In particular, it’s vital to have suitable insurance for homemakers. If anything happens to them, you need to pay someone else to do what they do without payment. You will quickly discover how expensive this can be, particularly if they have caring responsibilities.
Take care of your credit record
Your credit record will be considered if you need to get a mortgage. This includes remortgaging. Many landlords will check it as part of their tenant-vetting process. Some employers check it as part of pre-employment due diligence.
Managing your credit record doesn’t usually require a great deal of effort. It amounts to paying all your bills in full and on time, avoiding taking on excessive debt and ensuring all information is complete and accurate. You should check your credit file at least once a year to see if there are any mistakes. If there are, get them corrected as quickly as possible. Please do not ignore them until you want credit.
Why use Coombes & Wright Mortgage Solutions?
Coombes & Wright Mortgage Solutions is an award-winning mortgage & protection broker providing local, flexible, friendly advice. We offer a full range of products and provide tailored solutions to fit you and your family’s specific requirements.
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