Monthly Archives:February 2016

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Profile photo of Lombard FundingByLombard Funding

The true cost of buying a property

Until they come to count the pounds and do the sums, very few people have a full idea of the actual cost of buying a property. They might have a vague idea but it’s research and full consideration which leads many people to put their plans to start viewing properties on hold for a further few months while they add to the fund.

However, for ease of reference, anyone seeking to buy a house would be wise to consider the following when working out how much they need to save:

Deposit

100% mortgages (where the amount borrowed is 100% of the property purchase price) have become all but obsolete – the vast majority of high street lenders won’t even consider a 100% mortgage. In modern, post-recession times, a buyer will have to put at least 5% of the value of the property towards the purchase as a deposit. In many cases, a lender will require their borrower to put closer to 20% of the property value as a deposit and will offer more attractive interest rates to those with higher deposits.

Legal fees

It is virtually impossible to purchase a property without the assistance of a solicitor. In addition to ensuring the property is as it should be on behalf of the buyer by way of carrying out searches and surveys with local authorities, water agencies and (where applicable) the coal mining authority, they will also ensure it is properly registered to the buyer and their lender once the sale has been completed. Legal fees vary between areas but on average the cost of a solicitor to carry out conveyancing is in the region of £1,000.

Arrangement fees

Most lenders have arrangement fees (which is to say the administration fees they require to put the mortgage in place) which must also be paid. Some of these institutions may offer to add the fees onto the total amount payable, but it’s worth noting that in this case, there will be interest to be paid and it could end up costing far more than if they had been paid outright in the first place.

To discuss buying a property and getting a mortgage give us a call on 02084324566 to speak with one of our advisers who can guide you.

Profile photo of Lombard FundingByLombard Funding

Protect your income, protect your peace of mind

According to a BBC news report, in October last year UK unemployment rates were the lowest they had been in seven years: “More people were working full-time in the three months to August, up 291,000 to 22.77 million compared with the same period last year. The number working part-time rose 68,000 to 8.35 million.” This is good news for the economy and reassuring to know but it doesn’t give us any idea about the number of people who have had to take time off work due to serious illness or injury.

It’s easy to think that nothing is going to happen to you but the Money Advice Service states that almost a million people every year “find themselves unable to work due to serious illness or injury.” Perhaps your company has a great sickness policy with full pay for employees who need to take time off, but do you know how long that lasts? And of course, you can claim statutory sick pay, but will it last long enough to cover your bills and other expenses?

Sadly, we can’t predict what will happen in the future and unfortunately illness or injury can happen to anyone. Investing in income protection insurance will ensure that you are prepared for such an eventuality and give you peace of mind and certainty of financial security no matter what the future brings.

Protecting your income will cover your financial commitments and allow you to ensure your loved ones are cared for. It will also enable you to keep up with mortgage payments or any other repayments you have to make, pay off debts and cover essential bills as well as daily expenses. Income protection offers an added level of protection and allows you to focus on feeling better and recovering from your illness or injury without the added worry of financial stress and the pressure of having to return to work to start earning again.

Income protection insurance will pay you a regular income until you are able to return to work or until you retire, die or the policy ends. It will not replace your entire income but you can protect up to 75% of it (before taxation). You won’t be able to claim from your insurance if you are receiving any sick pay from your employer; statutory sick pay usually lasts for about 28 weeks after you stop working. The good news is that you can claim as many times as you need until the policy runs out.

You can discuss your income protection insurance needs with our professional Rated Financial Advisers. To find out more about income protection and how we can help you, contact us today on 02084324566.

Profile photo of Lombard FundingByLombard Funding

Why critical illness cover really is critical

With over two-million people in the UK living with Coronary Heart Disease (CHD) and more than two and a half million having been diagnosed with cancer, the need for critical illness cover cannot be underestimated. While few realise it, the reality is that a diagnosis of serious illness can have a significant financial impact on the individual and his or her family. In fact, a report by Macmillan Cancer Support found that more than 83% of those diagnosed with cancer were, on average, £570 a month worse off.

The reality is that while the cancer care itself may be predominantly free, other expenses can escalate as a result. Consider the transport costs incurred in regular to and from travel to the the hospital, for example. The ability to continue working and therefore earning is also threatened. The Macmillan report noted that 30% of cancer patients were affected by a loss of income, losing an average of £860 a month, while a third stopped working either permanently or temporarily. The stress of a serious illness combined with financial burdens can take a significant toll on the family. Under such circumstances, families may struggle to continue paying a mortgage or other monthly expenses.

Critical illness cover is a type of insurance that pays out usually in the form of a lump sum when you are diagnosed with a serious illness, such as heart disease, some cancers and other illnesses. Some policies also cover injury and permanent disability but the terms of the policy will differ from provider to provider, so be sure to check the terms and conditions of coverage. A 2014 study by the Association of British Insurers found that most critical illness insurance policy payouts averaged £60,400. The sum can be used to cover unexpected costs, keep up with mortgage payments or pay off debts.

Such cover is especially useful for individuals without savings or with limited employee benefits packages, who may struggle to make ends meet after diagnosis. Financial needs may not be covered by the welfare benefits available and in such cases this type of cover can provide a much-needed lifeline.

For more interesting reads about the UK economy and its impact on your financial health, visit our site regularly, and for details on Rated Financial Advisers’ critical illness cover options, contact us today on 02084324566.

Profile photo of Lombard FundingByLombard Funding

How long could you survive on your savings?

If you are anything like most UK citizens, your savings are probably not up to scratch. The Deadline to the Breadline report provides a frightening picture of the state of the average Briton’s precarious financial health, noting that most would run out of money in 29 days if their income were to suddenly stop. For working families (with breadwinners aged between 18 and 64) the picture is even more dire, with the time to breadline set at an average of two weeks. The survey also found that 36% of respondents had no strategy in place to cope with financial hardship.

The UK’s savings culture is worrying. The report found that the average monthly savings were just under £180. Almost 35% have no savings at all. With the cost of living increasing and benefits facing potential cuts, the need to protect your family’s financial health is vital, yet according to a Mirror poll only 4% of Britons have an income protection policy. In 2013, the average claim paid for individual income protection was £11,500. Such claims paid out on average for 230 weeks (more than four years), according to the Association of British Insurers.

Income protection cover provides protection for accident, sickness or unemployment or a combination of these, granting the insured a monthly or weekly payout for a period of time. While the state does offer Employment and Support Allowance to help those who cannot work, a report by This Is Money noted that this amounted to about £71 a week for the first 13 weeks and approximately £100 a week thereafter, which may not be sufficient to cover monthly expenditure, especially if the injured or unemployed person was the only breadwinner. Despite the potential benefits, income protection insurance is still not widely known or used, with Swiss Re reporting that, in 2014, a total of just 96,889 such policies were sold in the UK.

For information on income protection cover from Rated Financial Advisers, contact us today on 02084324566. Visit our site regularly for more interesting reads about the UK economy and its impact on your finances.

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