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 | Dec 20, 2021 | Mortgage News
When it comes to getting a mortgage, it helps a lot to prepare in advance. Firstly, you need to build your deposit. That can take several years. Secondly, you must make sure you make yourself an attractive mortgage candidate. Ideally, you want to allow at least six months for this. Then you need to put in the proper mortgage application correctly.
Building your deposit
Everybody is different, so it’s impossible to say how long you should allow for this process. It is, however, possible to say that you should learn about lenders’ rules on deposits. Firstly, you need to know what percentage of a property’s price you will need to have to be even considered for a mortgage.
Secondly, you will need to know what sources of funds you are allowed to use to build it. In particular, research the rules around gifted deposits and ensure that you comply with them in letter and spirit. If you don’t, then there is a strong chance that your future mortgage application will be turned down, even if you are a perfect candidate in every other way.
Making yourself an attractive mortgage candidate
You want to allow at least six months for this. Your first step is to make sure that you have ID. If necessary, get or renew your passport and/or driving licence. Next, check and see if you need to do any administrative cleaning. Before applying for a mortgage, you want to be on the electoral roll at the address on your financial statements.
At a minimum, ensure that your current account and payslips/accounts all show the same address as your electoral-roll listing. Ideally, check the details of all financial products you hold. This may be a nuisance, but you should be doing it anyway.
Check your credit records with TransUnion, Equifax and Experian. Make sure that they are all complete and accurate. If there are any mistakes, contact the agency immediately to have them corrected. Similarly, if you have failed to mark accounts as closed, do so promptly. For example, if you have an old credit card you never used, call the lender and close it down properly.
During this period, think about your finances with particular care. Remember that your lender will scrutinise your bank statements, so think about how they are likely to appear to an objective third party. If necessary, get an objective third party to look at your bank statements as they currently stand. Ask them if they think you should change your spending habits, at least for now.
Putting in the proper application in the right way
You might find it very helpful to use a mortgage broker. They can guide you to the best deal for you and advise you on how to apply for it. The critical point to keep in mind is that lenders want to know the answer to three key questions. These are:
- Can you afford the mortgage?
- Will you repay the mortgage without any hassle?
- Can they recoup their money from selling the property if there are any problems?
The more convincingly you can answer yes to all three questions, the more options you are likely to have. With that said, you don’t need to give up in despair if you’re not a “perfect” candidate. You may still find a more niche lender who will take you on.
As a final point, when you submit your application, as obvious as this may sound, ensure that you follow all the instructions. Answer all questions fully and accurately and upload/send any requested documents. Administrative errors might not get your application declined, but they may get it delayed.
Why use Coombes & Wright Mortgage Solutions?
We are an award-winning mortgage & protection broker providing local, flexible, friendly advice. Our head office is in Brookmans Park, Hatfield, and we have advisers in Abbots Langley, Hertfordshire, London and Dover and Canterbury in Kent.
Our team has over 100 years of combined property and mortgage industry experience. Jointly, we have helped and advised thousands of people at all levels of the property ladder. We pride ourselves on personalised service, exceptional customer care and a friendly approach.
by admin | Aug 26, 2021 | Mortgage News
Life may not be easy for first-time buyers. You do, however, potentially benefit from several government schemes. That said, it’s vital to understand what these mean in practice. They have potential drawbacks as well as advantages. With that in mind, here is a quick rundown of the main options.
The Lifetime ISA
The Lifetime ISA is essentially a government-boosted savings scheme. You can save up to £4K each (tax) year and get a 25% bonus added. In other words, you can get up to an extra £1K per year.
Lifetime ISAs can only be used either for the purchase of a first home or to finance retirement. If you withdraw funds for any other reason, there is a 25% penalty applied to the whole sum. This means that you are effectively charged to withdraw the money you put in.
For example, you pay in £4K and get the £1K bonus. You then need to withdraw your money. The 25% penalty is £1250 so you lose £250 of your own money. This may be amended in future. For the time being, however, it is a consideration you should keep in mind.
The Mortgage-Guarantee scheme
This is often known as the 95%-Mortgage scheme and is essentially a reboot of the old Help-to-Buy scheme. It works along the same lines. If buyers can put down a 5% discount, the government will guarantee up to 15% of the remaining mortgage. This means that the effective loan-to-vehicle rate is 80% rather than 95%.
Keep in mind, however, that this guarantee is for the lenders rather than the borrowers. In other words, if you default, they will be protected to the extent of the guarantee. You will still have to deal with the standard consequences of default.
The Help-to-Buy Equity-Loan scheme V2
This is essentially the same as the original Help-to-Buy Equity Loan scheme. The two main differences are that it is only open to first-time buyers and that it has regional price caps. In short, if you can put together a 5% deposit, you can borrow up to 20% of the purchase price of your home from the government. You need to get a standard mortgage for the reminder.
There are, however, three key points to remember. Firstly, the Help-to-Buy Equity-Loan scheme V2 is only available on new-builds. Secondly, the government will own an equivalent stake in your home. This means that any increase in your home’s value will result in you paying more to buy out the government’s stake in it.
Thirdly, if you can’t repay the loan within 5 years, you will have to pay interest on it. Currently, any repayment has to be at least 10% of the home’s market value at that point. If you can’t afford that, then you will have to keep paying interest on the full amount until you can (or you sell).
The First-Homes scheme
The First-Homes scheme currently only applies in England. It offers first-time buyers a discount of 30%-50% on new-build properties. The standard discount is 30% but local authorities have the option to increase this to a maximum of 50% as long as they can justify the decision. The discount must be passed on to any future buyers.
There is a price cap of £250K outside London and £420K inside London. There is also an earnings cap on candidates of £80KPA outside London and £90KPA inside London. Local authorities have the option to prioritize certain groups of first-time buyers for the first three months of property marketing. After this, they must allow any qualifying application.
The main potential disadvantage of the First-Homes scheme is that it may be very hard for regular first-time buyers to qualify for it. For example, local authorities may use it to encourage key workers to stay in higher-cost areas.
For advice, please get in touch.
by admin | Nov 7, 2020 | Mortgage News
When you exchange contracts with a seller, you are committing to making that purchase no matter what. Even in an absolute worst-case scenario, say the house is struck by lightning and burns down, you are still committed to buying it. This means that, as a buyer, you need to be prepared.
Do your homework thoroughly before you exchange
First of all, make sure that you’re really comfortable, if not actively happy, with the local area. Think about the practicalities across all seasons, including the depths of winter. Think about what it might mean for working at your current place of business and from home. Think about what it might mean if you wanted or needed to change jobs.
Secondly, make sure that you’re really comfortable with the property itself. Unless you’re knowingly buying a “fixer-upper”, then you need to be sure that the property is structurally sound. Unless you’re buying a new-build with a reliable builder’s guarantee, it’s usually very advisable to have a property surveyed rather than just valued.
In simple terms, a survey looks at the structural soundness of the property and tries to confirm whether or not any issues can be reasonably foreseen. A valuation essentially just looks at how much the property could be expected to fetch if it had to be sold. It, therefore, acts as a baseline for calculating the loan-to-vehicle ratio of a mortgage.
Make sure you have insurance from the point of exchange
It is impossible to overstate the importance of this point. It may be highly unlikely that anything will happen to the property between exchange and completion. There is, however, a huge difference between unlikely and impossible and that difference can be painfully expensive. If that difference happens to you, then you will be the one taking the financial hit – unless you have insurance in place.
The case for insurance becomes even more compelling when you consider how little it can cost. Firstly, you’re only insuring the building itself. If the seller still has property in it, then that is their problem. Secondly, you’re only insuring for the rebuild value rather than the purchase value. Essentially, you already own the land on which the property rests, so you’re only looking at the cost of rebuilding the property itself.
Think about whether or not you need insurance for your move
If you’re using professional movers then check that they have insurance in place. If you’re planning on moving yourself, even if only in part, then you may want to check if your existing home insurance covers you for the move. If it doesn’t, you may want to see if you can take out insurance to cover you during the move itself.
If you are hiring a van, then check what insurance is covered as part of the hiring process. If it’s insufficient, then again see if you can find extra cover for the process of the move. If you’re borrowing a van or car then it’s vital that you have standard third-party insurance in place as well as insurance for the goods you are moving. Never assume that either the vehicle owner’s insurance or your insurance will cover you for either event.
Update your insurers on your move
Remember to let your insurers know that you have moved. In fact, remember to inform all the companies with which you do business. If you receive any benefits, you will probably have to update the relevant authority. You may also want to think about applying a mail redirect to catch anything you’ve forgotten (or if a business doesn’t update its records properly).
This can be a tedious exercise at a busy time, but it’s also an opportunity to close off old accounts and hence reduce the number of organizations which have your data.
Your property may be repossessed if you do not keep up repayments on your mortgage.
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