Being a first time buyer can be confusing at the best of times, and the current coronavirus pandemic brings even more challenges. But don’t panic. There are still ways that you can buy a home and we are here to tell you what they are.
At the start of the 2020, there was a record number of 95% LTV mortgage options, meaning lots of lenders were happy with a 5% deposit. But those golden days have temporarily disappeared for now thanks to covid.
Protecting the most important part of your business
Running your own business is hard. Whatever it might be, you are constantly making sure that you are earning enough to not only pay for all your overheads but to also pay yourself a decent salary, otherwise what is the point?
The problem is that you are sometimes so focused in the areas that you know best and making sure that your business, contents, vehicles and other tangible assets are insured adequately in the event of fire, theft, accidental damage or anything else that may interrupt the smooth running of your company that you forget about protecting the most important part of your business – you and your key employees in the event of incapacity.
This is where Executive Income Protection comes into its own.
The world of investment is changing, especially where it is no longer possible to ignore statements from our own UK Government making it clear that change is happening.
The Climate Change Act 2008 committed the UK to an 80% reduction in carbon emissions relative to the levels in 1990, to be achieved by 2050. In June 2019, secondary legislation was passed that extended that target to “at least 100%”.
Autumn has arrived and with it the sense of something hovering over the horizon – no, not Christmas, something more exciting… peak re-mortgage season. The next few months often see increased demand for re-mortgages and this year may be even busier due to the pandemic. Now is the time to start doing your research.
Around this time of year, you will hear the phrase “we’d like to be in by Christmas” from people buying houses, you may even have said it yourself. This is one reason why autumn and winter see a high number of cessations, or in other words, many mortgages come to the end of their initial term of two, five or however many years. When this happens, your interest rate will switch to the Standard Variable Rate (SVR).
The SVR is often higher than your initial rate, meaning your monthly payments could increase. Think of it as the mortgage equivalent to Amazon giving you the first three months of Prime half price. Once those months are up , you will be paying the standard subscription.
Re-mortgaging can be a way of saving money on your monthly repayments. You could see a more significant reduction if you have saved some pennies during lockdown and can pay off more of your loan – although this could incur an early repayment charge, so check your paperwork.
By re-mortgaging, you could switch from a tracker product with variable payments to a fixed rate option where you pay the same each month. These benefits might sound especially appealing in the current climate where unemployment is on the up and finances are being squeezed.
The coronavirus pandemic has made lots of things more complicated and re-mortgaging is one of them. But, don’t despair yet!
Many mortgage lenders have introduced policies about applicants who are or have been on furlough, and placed restrictions on loan to value, use of overtime income and bonuses and have made things especially restricted if you are self-employed. However, in many cases you can arrange a product transfer with your current lender without such policies applying to you. This might be frustrating if your current lender does not offer the best deal but it’s likely to still be better than switching to the SVR.
If you are not sure about your options and your eyes are glazing over at the mere thought of interest rate comparisons, you may want to speak to your adviser.
We can help you find the best option for your circumstances and guide you through the process. Whether you decide to speak to us, or handle matters yourself, you should get started sooner rather than later.
Typically, re-mortgaging can take four to eight weeks. However, in the current post-lockdown, pre-Christmas busy period it could take longer. Some lenders are taking up to 2 months to process and underwrite a mortgage application. It is best to get ahead of the game.
If you would like to explore your mortgage options, contact Temple Wealth Management today. You can call our office on 01329 282882 or use our Facebook or Contact Us page.
Your home maybe repossessed if you do not keep up repayment on your mortgage.
No-one could have predicted the first half of 2020 and what it would bring, so the notion that you could have been completely prepared for what was to come is difficult to comprehend. I’m guessing that if you could travel back in time and put more insurance policies in place you more than likely would have.
One of the most overlooked types of insurance has typically been income protection. Research conducted by the Financial Conduct Authority shows that only 35% of people have any form of protection insurance in place, and of that 35%, only 4% have any form of income protection.
Two of the most common reasons for this is the lack of understanding around what income protection is, and the belief that you’ll never need it! However, a good way to understand what income protection is, and what it does, is to look at the furlough scheme used by the government in recent months.
Since March, nearly ten million UK workers have been placed on furlough, so it’s likely that if not directly impacted yourself, you know someone who has been. The basic premise of furlough is to support workers financially while they’re unable to work due to COVID-19. Albeit that the mechanics, criteria and funding are different, this is basically what income protection does.
What would have happened to all those workers if the furlough scheme hadn’t been introduced?
This is the question you need to ask if yourself and assess your own circumstances if don’t have any income protection in place.
A common response to income protection is ‘it’ll never happen to me!’, but what 2020 has shown us so far is that nothing can be predicted and it is better to be prepared and protected should the unexpected happen.
Income protection plans normally cover up to 60% of income and protect you if you are unable to work due to sickness, illness or an accident that keeps you off work for a period of time. You can, based on your savings, determine the amount of time before the income protection pays out with deferral periods being normally one, three, six or twelve months. During that period there would be no payments for the income protection.
What if you’re self-employed?
If you’re self-employed you can still get income protection, and in fact it may be even more relevant for you. However, according to research from The Exeter, less than one in 10 self-employed workers protect their income, and nearly a fifth of self-employed workers have no personal savings to rely on in times of financial uncertainty.
According to the Office for National Statistics, the UK self-employed workforce grew to 5 million by the end of 2019, representing 15.3% of employment, up from 3.2 million in 2000.
With more UK workers embracing self-employment, options within the marketplace have adapted to better serve this growing sector of the workforce, with bespoke policies tailored for the differing requirements of the self-employed.
Contact one of our independent advisers to discuss your protection needs today on 01329 282882, or use contact our Facebook or Contact Us page.
Income Protection plans typically have no cash in value at any time and cover will cease at the end of term. If premiums stop, then cover will lapse.
Temple Wealth celebrated 10 years as a new business on 21st September. Planned celebrations have been lost in lockdown but the achievements have not.
What a 10 years it has been, we began in 2010 with two Advisers, two paraplanners and an administrator to currently 18 Advisers, 10 Paraplanners, 2 sales support, 2 administrators and a Finance Manager with lots of changes to the industry along the way.
There has been the advent of Diploma Qualifications for Investment Advisers, the banning of commission, vast changes in pension, the mortgage directive, to name but a few, but we are still alive and kicking.
A big “thank you” to Sense Network for believing in us at the outset and its support ongoing which has seen the Company be part of the Parliamentary Review for Best Practice in Financial Services and achieve Corporate Chartered Status in 2017.
The next 10 years will see more changes no doubt but you can always count on Temple Wealth management to be your financial partner for life and we wouldn’t want it any other way.
We would like to share our celebrations with our clients, both existing and new by asking you to like and share this post with your friends and colleagues with a chance to win £50 M&S voucher.
Anyone who likes the post on social media will be entered into the draw which closes at midnight on Thursday 8th October with the winner being drawn at random and notified on 9th October 2020.
While the stamp duty holiday and ‘Eat out to help out’ scheme stole the headlines in Chancellor Rishi Sunak’s Summer Economic Update in early July, an overlooked incentive was the Green Homes Grant Scheme. This is where homeowners and landlords will be able to apply for vouchers towards the cost of energy-saving improvements to their properties.