Rated Financial

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Interest rates increased by 0.5% – Definitely something to write home about!

On what seemed like a relatively normal Thursday, the Bank of England base rate has changed – something we haven’t seen for 10 years, at midday Mark Carney has confirmed that interest rates are being increased to 0.5%. A new stimulus package has also been introduced. It is clear that this is an attempt from the Bank of England to cushion the potential shocks of BREXIT. Many homeowners and property investors with tracker and variable mortgages are seeing a reduction in their mortgage payments which brings much joy to general consumers with mortgages and investors alike. Interest on debt will also be reduced for many and burrowing for business will be lower. Although businesses can benefit from reduced interest on loans, the pound has been hit in the short term meaning that any businesses importing goods may feel import costs have increased further than they already have which is a squeeze on margins and profitability. Of course a weaker pound for exporters has the opposite effect and works in their favour.

Because of the news, a new range of cheaper fixed products are being introduced on to the market as we speak so if you are looking to fix, now is a good time. Burrowing to buy a property is even cheaper now than it has been previously been and we expect lenders to reduce criteria on rental income on buy to let mortgages meaning you could achieve more burrowing than previously. Mark Carney has confirmed that savings on interest rates will be passed on to consumers and have a new initiative to make sure banks are lending. We therefore feel that that with the extra stimulation, banks will be offering mortgages and loan products at exceptionally low rates. Call us at www.lombardfunding.co.uk on 0207 101 9598 to discuss the best rates available so we can get you the best deal if you are looking to buy or refinance.

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Fantastic Bridge loan rates and Development finance available

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We offer bridge loans and development finance from a variety of lenders, private banks and other institutions getting you the level of funding required when you need it fast. Provide your details to get the best rates available:

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Investing-Real-Estate

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Bridge Loan rates as low as 0.44% per month

At Lombard Funding we specialise in getting you the best possible rates but also realise how important it is to be able to get you the level of borrowing required given your situation. We have a current exclusive bridge loan rate of 0.44% per month available to light refurb clients with LTV up to 50%. Our knowledge and relationships within the Bridge loan market/ development finance/ buy to let and residential mortgage market means we can place deals where others cannot. We have not just a whole of market panel but a significant offering with many lenders unknown to other brokers. This includes access to private banks and specialist lenders. Having a larger and more diverse panel means we have access to better rates and a lending offering that can fit a wider variety of scenarios. Speak to us today to discuss your needs with one of our experienced brokers. We will have an initial chat with you to discuss your requirements and look at the best options to achieve a fast completion.

Ask us about our 0% broker fee.
We offer unpublished exclusive rates from lenders so ask us about our market leading rates.

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Follow the ripple effect for best value

While property prices in London continue to be the highest in the UK, they’re also pushing more and more people out of the city into more affordable areas, making the ripple effect more pronounced than ever. If you’re looking to buy in or around London, now’s the time to get into the market before prices shoot up further. The data collected by the Office for National Statistics is collected from mortgage lenders across the country.

The area which has shown the strongest growth is the south-east, with an 11.4% increase on last year. The English average inflation figure for house prices was 8.2%. Most buyers surveyed by the Office for National Statistics cite their reason for relocation as wanting better value than they’d get from housing in London. This ripple effect has pushed prices up across the region though, with average property prices creeping closer to £400,000, way above the national average of £284,000.

In fact, it was good news for sellers all over the UK, with prices increasing across the board, with the exception of prices in Scotland, which fell 0.8%. London prices increased 9.7%, and the east of England’s values hit double figures, with an increase of just over 10%. Wales and Northern Ireland both saw increases of just under 3% in their house prices.

Connell’s estate agency reported that they’d carried out 21% more valuations in March than they had in February, and 41% of their March valuations were for first time buyers, which is encouraging as it shows that the property market isn’t scaring off those about to take their first steps into the housing market. Other agents said that March had seen an increase in business simply because buy-to-let investors were rushing to get their purchases finalised before the 3% stamp duty penalty came into force in April.

When it comes to house prices in the 12 months prior to February 2016, it was more encouraging news for house buyers, with inflation slowing to 7.6%, down 0.3% from January. Based on these figures, industry economists are predicting another house price increase of about 6% during 2016. It looks like now is definitely a great time to buy outside of London!

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.

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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.

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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.

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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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The benefits of the Help to Buy scheme for first time buyers

One of the consequences of the banking crisis was a tightening up of the lending criteria used by most mortgage lenders, which famously made it harder for homebuyers, particularly first time buyers, to obtain home loans. The days of five per cent deposits – and even 100% mortgages – were clearly over and new affordability checks threatened to make it even harder to obtain mortgages. Consequently, without financial assistance from family to raise the necessary deposit, the average age of first time buyers rose to 35.

Introduced by Chancellor George Osborne in 2013, the Help to Buy scheme aims to provide financial assistance to first time buyers and other home movers looking to get their feet on the housing ladder. For first time buyers, the scheme offers several benefits:

• Raising a deposit of five or ten per cent is challenging enough for many first time buyers, but small deposit mortgage schemes often levy higher interest rates, meaning the preferential offers are simply out of reach. With the Help to Buy scheme, it’s easier for first time buyers to have a deposit towards their home.

• During the first five years of the mortgage, no interest is due on the Help to Buy loan, making it easier to meet the monthly repayments and to start to pay off the capital.

• As the first time buyer needs to borrow less capital under the scheme, it’s easier to pass affordability tests and more likely that more competitive interest rates will be offered than on 95% mortgages.

• The interest rate on the Help to Buy loan, after the initial interest-free period, is far more competitive than comparable long term loans.

Even with the financial support offered by the Help to Buy scheme, obtaining a mortgage is still a complicated area, with a vast number of contrasting offers available. Securing quality mortgage advice from an independent, professional broker such as Rated Financial Advisers can help you to secure the most competitive deal for your personal needs. To see how Rated Financial Advisers can help you, contact us today on 02084324566.

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