You’ll find the latest news and advice here, as our team understand the importance of up-to-date advice and guidance. Utilising our many years of combined experience, we ensure that you receive a fantastic deal. View the latest developments below, and don’t hesitate to contact our team for more information.
What Life Insurance Is Best For Joint Mortgages?
When you take out a mortgage we would always recommend you take out appropriate life insurance too, so that you know your monthly mortgage payments are covered if things go awry.
If you’re buying on your own, a single life insurance plan will probably do the trick, but if you’re going into joint property ownership, a joint plan may be more appropriate. So, which is best for you?
When it comes to joint ownership, there are two main types:
1. Joint Tenant
Where both individuals each own 50% of the property and have equal rights over it – no matter who contributed what in terms of a deposit. Married couples and those in civil partnerships would typically go into joint tenancy, as it means that if one person dies, their share automatically passes to the other –
irrespective of the terms of any will in place.
2. Tenants in common
Where each owns a separate and distinct share of the property (and not necessarily an equal share). This might be the best option for co-habiting (but not married) couples, parents buying for their child, or relatives or friends buying together. This set-up means that if one of the tenants in common dies, their
share forms part of their estate, rather than automatically going to the other tenant.
Single or joint life insurance?
Given the differing types of property ownership, it’s important to look at your individual situation before taking out life cover.
A policy taken out on a single life basis covers one person only and will pay out the sum assured if the policyholder dies within the term of the policy. A joint policy covers two lives and will normally pay out on a ‘first death’ basis, at which point the policy will end. There are pros and cons of both types of cover
- and you should seek advice so you know you’re getting the cover that’s right for you.
Things to think about
Budget- One joint insurance life policy could be more affordable than two single life insurance policies.
Cover- Do you both have exactly the same life insurance need? Would two plans be more appropriate?
A joint life insurance policy only pays out once - The proceeds could go to the surviving partner (and would be tax-free) so that they could pay off the mortgage. However, they would be left without any life insurance and applying for cover later in life can be expensive.
Relationship break down - It's possible that the insurance provider would not be able to divide a joint life policy into two single policies. If you have two separate policies, neither will be affected in the event of a split with the joint owner.
If you need life insurance to protect your mortgage, please talk to us before you buy and we’ll
advise on cover that’s tailored for your circumstances.
Barriers To Protection
According to an online survey of 2,000 adults by Royal London, half of those surveyed believe life insurance is essential for someone with a mortgage or dependants and yet only 60% of people with a mortgage have life cover.
While 60% of those surveyed with a mortgage have a life insurance policy, just 29% have critical illness cover and 19% have income protection insurance, suggesting that better education is needed to help make people more aware of the benefits of taking out protection.
We believe some kind of protection insurance should be considered essential for anyone who has a mortgage or people who rely on their income – or both. The financial impact of not having cover could be devastating; think about what would happen in your situation if the main breadwinner was unable to work for a long period of time, or was diagnosed with a critical illness. How would you fund your mortgage payments, keep on top of monthly bills or pay for treatment that isn’t available on the NHS?
For less than the cost of a daily cup of takeaway coffee* you can protect yourself and your family and help deal with any consequences that could occur from illness, accident, unemployment or death. That’s why, when we talk to clients about protection, we talk about value, rather than cost.
Overcoming the barriers
The main reasons why people feel they don’t need protection:
2. Not seeing the benefit
3. Not trusting that a provider will pay out
If you’re concerned you’d be wasting money every month because insurance providers don’t pay out, you might be surprised to know that 97.8% of claims were paid in 2017 – a record-breaking £5bn in income protection, critical illness cover and life assurance.
Protection insurance can provide a valuable safety net at a time you need it most. Please get in touch and we can discuss how it could benefit you.
*Quote basis: 35 year-old non-smoker, £250,000 decreasing life assurance and critical illness cover to cover a repayment mortgage, 25 year term, guaranteed premium. Premium of £58.72 per month is equivalent to £1.89 per day based on a 31-day month. Quote sourced via Openwork Select panel of insurers on 15 January 2018. Premiums are subject to an individual’s personal circumstances and medical history.
Top Three Rated Mortgage Broker in Leeds
Well done The Leeds Team!!
We are now listed as one of the Top 3 Mortgage brokers in Leeds.
This is based on an independent 50-Point Inspection which includes everything from checking reputation, history, complaints, ratings, satisfaction, nearness, trust, cost and general excellence.
We Are Delighted To Announce That Pippa Heseltine Has Joined The Team
We are delighted to announce that Pippa Heseltine has joined CS Mortgage Solutions based in Yeadon. https://www.csmortgagesolutions.co.uk/meet-the-team
Base Rate Rise: What it means for you and your mortgage
Are you paying too much for your mortgage?
More than £100bn of mortgage balances are resting on a interest rate of 3.75% and above, with £82bn of balances due to mature between now and December.
Now is the time to contact us so we can review your mortgage and secure your new mortgage rate.
What does the latest interest rate move means for you?
The Bank of England’s Monetary Policy Committee (MPC) today raised interest rates for the first time since November 2017. The change is a small one, moving from 0.5% back up to 0.75%. While today’s move is unlikely to have a significant impact on your finances, those on variable rate mortgages could see a small increase in their monthly payments. Payments will not change for those currently on fixed rate mortgages. Savers may benefit from a small increase in interest paid on their cash accounts, though rates offered through bank accounts remain feeble. Annuity rates may also see a small increase.
If you have any questions regarding your finances, please don't hesitate to contact us and we will be happy to help address any concerns you may have.
Are you aged 55 and over looking for a mortgage? We could help
We work with a mortgage provider who specialises in later life lending and offers a 55+ interest only residential mortgage designed specifically with the older borrower in mind.
Many people 55 and over feel they are too old to get a new mortgage, the 55+ described as a flexible way to borrow money in later life could be the answer. With an LTV of up to 60%, money can be used for varied purposes including re-mortgage, purchase, holiday home and debt consolidation.
This isn’t an equity release deal – it’s a standard residential mortgage where loan interest is repaid each month, you retain 100% ownership of their property and at the end of the mortgage they repay the capital through a specified repayment vehicle.
With the population getting older, people are working for longer and seeking more innovative alternativesto High Street borrowing. The UK already has almost 12 million over 65s many of these with legacy interest only mortgages and no readily available repayment vehicle. Selling may have been your only option, however, 55+ could be a solution?
Contact us and our local adviser will arrange a time convenient for you to explain how we can help.
Decision Time For Help To Buy Borrowers
The Help to Buy equity loan scheme celebrates its fifth birthday this year, but thousands of borrowers may
be in for a surprise when they realise this means they’ll have to start paying interest on their equity loan.
To date, the scheme has helped over 144,000 borrowers buy a newly built home.
Some 19,394 borrowers took out a loan in the scheme’s first year and many borrowers may have forgotten the increase in payments they soon face. However, brokers can play a vital role in guiding borrowers through their options.
Under the scheme, borrowers can acquire a five-year interest-free loan from the Government for up to 20% of their property’s value, 40% in Greater London. When borrowers reach the fifth anniversary of their deal, they are required to pay an interest fee of 1.75% on the amount of their equity loan. This fee will rise annually by any increase in the Retail Price Index plus 1%.
So, for a £200,000 property, assuming a Government loan of 20% (£40,000) borrowers will see their payments increase from the current £1 a month management fee to £59, or £712 in the first year.
Based on an assumed RPI of 5% plus 1% (6%) the interest fee will rise to 1.86% in year seven and 2.21% by year ten, equating to monthly payments of £75 and £896 annually.
One way to avoid the interest payments would be to pay off the loan in full or make a minimum 10% repayment, bearing in mind the Government’s share may have increased. If the property was bought for £200,000 five years ago but sells for £240,000, the Government’s stake will now be £48,000 (20%).
If the borrower doesn’t have adequate savings to repay the loan, they could look at selling the property,
especially if it has grown in value. Likewise, if the applicant’s salary has also risen, remortgaging to pay off the loan could be an option. Not all lenders will accept a remortgage where there is an equity loan
involved and borrowers may need to pay additional remortgaging costs.
With the market currently benefitting from record low rates, a product transfer with the same lender and an additional further advance may be a lower-cost option.
Halifax Intermediaries offers a number of competitive product transfer and further advance rates for Help to Buy borrowers, so contact us for a free review.
Brit’s most expensive guilty pleasures each month are cigarettes or vaping, eating out, drinking and bingeing on fast food while six in 10 (61%) do not have any life insurance, Direct Line Life Insurance has found.
Smokers and vapers spend almost £100 a month feeding their habit, while drinkers spend £69 in the pub. Takeaway lovers invest £58 every month on food deliveries, while fast food addicts spend a whopping £38.
Brits also spend over £30 a month, almost £400 a year, on coffee. This is despite the average monthly premium starting from less than a weekly coffee run or a couple of drinks down the pub.
Cohabiting couples wrongly assume they will inherit their home should the worst happen.
Jane Morgan, business manager at Direct Line Life Insurance, said: “Everyone loves to unwind at the weekend with a few drinks and their favourite takeaway meal, but it’s important not to get caught up in the day to day and think about your long-term future too.
“By making a few small sacrifices, like cutting back on a few coffees or choosing to make dinner at home once a month, rather than going out to eat, you can instead provide long-term financial protection for your family.
“It’s easy to say ‘I’ll think about that later’ or put it off for a rainy day, but it’s important to be prepared for your financial future, no matter what life may bring.
“Planning for your financial future can appear intimidating and it’s easy to put off especially when thinking about life insurance or critical illness cover, but some things aren’t as mind boggling or as expensive as you might think.”
Taking a closer look at our disposable income, Brits have on average of £1,067 left each month after tax and their rent/mortgage commitments.
Across the UK, residents of Liverpool have the highest monthly disposable income at £1,401 followed by London (£1,206) and Plymouth (£1,183).
At the other end of the scale, residents in Glasgow have £818 left each month to spend after tax and accommodation, and those in Birmingham have £889.
When it comes to gender, men claim to have an average monthly disposable income of almost a third higher than women at £1223, with women reporting to have over £300 less at £916 to spend each month.