The advantages of 100% mortgages

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A 100% mortgage means that you will not have to pay a deposit. The lender will give you the full value that you need to buy the property.

This type of mortgage is great for anyone who cannot afford to save up for a deposit as they will be able to get on the property market more easily. It can be difficult, especially in this current economic climate, to put away some money each month. Even if you do have savings, you will need money to pay for the move, to pay the solicitor, the removals company and things like that and so finding a significant chunk for the deposit can be very difficult.

100% mortgages are not that common, most companies do ask for a deposit, but there are a selection on offer, which means that there is the opportunity to compare them and find out which one will be the best for you.

The mortgages were set up to help first time buyers as anyone who has an existing mortgage and is moving house, is likely to have some collateral in the house that will be used instead of a deposit. The 100% mortgages do sometimes often ask for a guarantor, which means that the borrower will nominate someone who will be able to cover repayments if the borrower cannot. This is often a parent or grandparent. They do this because the lending risk is higher as the bank has no down payment on the loan or any collateral in the property.

With house prices being so expensive, even though they are dropping a bit, it is still very difficult to save up enough money for a deposit. Years ago deposit amounts were much smaller but these days trying to find 10% of the value of a property will mean putting away tens of thousands of pounds, which is a sum of money that can be very difficult for anyone to save up. With many people having not had pay rises for a while and prices going up all the time, it can seem impossible to save very much and therefore having the option of not paying a deposit can be a great opportunity.

What is 100% Mortgage?

A 100% mortgage is a type of mortgage which covers the total value of the property the mortgage is being used to purchase. For example you do not need to put any deposit down  – the mortgage lender provides a mortgage to cover the full property value.

Simply put, a 100 percent mortgage means that you have borrowed 100% of the value of the property you are buying. It is also called zero down mortgage, because you don’t have to put down any deposit. It is especially popular within the United Kingdom.

This type of mortgage is especially common with first-time buyers. High-percentage mortgages, like this one, are not as likely to be subjected to extra lending charges as they once were. At the moment there are few brokers that accept 100% mortgage applications.

Keep in mind that just like you need to shop around for the right property, you need to find the right mortgage for you. Right now 100% mortgages are available through several lendors, for example Aldermore.

Their terms are – young buyers can borrow up to 100 per cent of the property’s value, with a maximum loan of £250,000, without a deposit. But their parents have to guarantee up to 25 per cent of the property’s value by putting up the family home as collateral.

Step-parents, grandparents and legal guardians can also act as guarantors if they are ready to take the risk. First time buyers have to be aged over 25, earning more than £10,000 and with a clean credit history.

What are flexible mortgages?

Some mortgage schemes provide the consumers with a few options – either varying the monthly payments or combining the mortgage account with some other savings account. This is also called “offset” mortgages. This is a very useful option, if you want to close off your loan early.

Listed below are some flexible features (it is not necessary that they are only associated with flexible loans) which are becoming very popular. Look at them and select what is best for you:

Overpayments

This system allows you to pay more than your normal monthly installments and will provide you with two benefits:

► Your loan amount will reduce considerably and hence you will have to pay lower monthly installments.
► If you continue paying the high amount, the loan can be closed much earlier than your usual term.

Except for fixed rate mortgage (where you have to pay an early repayment charge), normal flexible mortgages do not charge you for making overpayments.

Principal


The principal is the total amount of money that you had borrowed. You can give the creditor a sum of money called down payment before taking the whole loan so that there will be a reduction in the total amount of money that has to be financed.



Interest

Interest is the amount that the kinder charges for the money that you have borrowed; it is usually called the interest rate.

Besides, the given rate, the creditor can also charge you points and additional loan costs – every point is one percent of the total financed amount and is paid along with the principal.

On mis-sold payment protection insurance: Don’t shrug your shoulders off it if you could claim it back

There has been way too much bad publicity on Payment Protection Insurance over the years. Then there are too many people making their claims and ended up bullied out of the case. You’re probably thinking it over and hesitating to do your thing. You’re a bit discouraged to push it through even though you know you were forced to take out the policy, and that you’d be wasting that money if you’re not going to claim it back. Well, then don’t. You cannot possibly just shrug your shoulders off a potentially large amount of money that the bank owes you this time.

If by any chance at all you firmly believe that the PPI sign up you made was not in accordance with the regulated sales process, then you can make a claim from your bank, the one that sold the insurance alongside your loan, credit card, or mortgage. You have heard it right when people started talking about how they were cheated into buying it.

Speaking of regulated sales process, PPI should have been thoroughly discussed with you when it was offered. That’s what should make it lawful enough and not fraudulent. Generally, PPI should be a brilliant option for credit consumers as it was designed to protect them from being up to the neck in debt and the bank from loss. The policy covers a portion of the repayment dues in times of sickness, death, accident, or redundancy. The thing about banks and other insurance sellers in the recent years is that they’ve so been so over the moon about profiting from this policy that they came up with horrible ways to just push the policy into people.

mis-sold payment protection insurance

In most cases, PPI was just applied to any credit agreement without the customer’s knowledge and permission. Online applications are just one of these incidents. Imagine the shock and disbelief that people had when they found out they have paid for something they haven’t even heard of until payment time. Wow!

On other stories, people were simply made unaware of what surrounds the policy. They were forced into believing it was compulsory and their credit applications were not going to be approved if they didn’t take out PPI alongside. Some were not even eligible to buy the product but were still made to. They were either under the age of 18 or over 65, with pre-existing medical condition, self-employed, or do not have a full time job. When they bought the policy, they didn’t know it was just good as dead because they won’t get covered if they needed it.

The shameless sales tactics have now been discovered and ruled over by the High Court this time. And what you need to do it to reassess your own financial account to see roughly how much you have spent on PPI payments and make a claim. You are most likely to get more frustrated if you knew you’d have thrown away hundreds, even thousands of pounds on an insurance policy that you knew was just wrongly sold.

If you need to get a hold of PPI information on your account, the paperwork should do the trick. Look around your file cabinets and drawers for your statements or credit agreement forms. There will be references to PPI in there. Also, a policy certificate would have been sent to you following the sale. Get them all together and inspect the details. It will also help to find information on the internet about how the policy goes. In cases of missing documents, contact your bank to ask for copies. They should be able to provide you with that. Read more »

Deliver Yourself Out of The Financial Crunch By Getting PPI Money Back!

Are you looking at the big picture when it comes to getting your money back to you in one place? If you’re lost for what we’re talking about, let us back up real quick: it’s all about payment protection insurance, or PPI. Surely you’ve seen the articles about PPI in the newspapers lately. The truth is that the UK consumer has been losing money due to fraudulent practices, and it’s time to fight back. There’s no time like the present to really make sure that you have all of your ducks in a row, so to speak, to make sure that you haven’t just been leaving money on the table. It would be in your present interest because not only do you get your money back, but you’re also going to be able to get your money paid with interest attached to it. That’s a way to apologize for the fact that the money was taken from you in the first place.

What makes payment protection insurance really bad is because a lot of the time it was mis-sold — the people knew the policies wouldn’t do anything for the consumer, but it was sold to them anyway. That’s a violation of the public trust, no matter who you’re talking about. It’s better to get these things taken care of from the get go rather than feel like you’re going to be at your wits end trying to make sense of it all.


Sure, if you’re going to try to do anything and everything on your own, then it’s highly likely that you’re going to run into problems. But what if you avoided this path completely and thought about just getting a legal professional to walk through the process for you. That means that you get to take care of your regular life without interruption. You can have them discover any and all PPI policies that you might have floating out there — even some that you probably weren’t aware of. When we say to you that a lot of loan products had PPI attached to them, we’re absolutely serious about it. You might even be surprised to find that your mortgage has PPI attached to it. It’s just a matter of looking at the original contracts.

It’s a lot of paperwork to sift through, and that’s not always easy. So what you will need to do is make sure that you’re focusing on the big picture and getting help from the beginning. Good luck!

How Can Interest Rates Affect Financial Products Around the World

If there’s one thing that businesses have to worry about in a global marketplace, it would definitely have to be cash management. However, there’s something even more critical to a business’s success, something that gets overlooked quite often. This would be interest rates. If you’re curious about how interest rates can affect financial products around the world, this is the guide for you.

You see, interest rates really do make a difference. Money is not borrowed in a vacuum — the lender has to make a profit based on not only market fluctuations, but also the creditworthiness of the borrower. Interest rates affect financial products by making them more or less costly based on what’s going on in the world.

Interest rates can also impact cash management solutions. If you’re paying interest, you’re not always paying as much principal on an account. You have to manage both halves of the situation in order to have a solution. Otherwise, you’re just going to be beating yourself up in the long run, and who really wants to do that?


Working this into your business’s corporate cash management strategies is critical. Keep in mind that you will not always have just one cash management program. you will have to make sure that you focus on anything and everything possible in order to keep things moving in the right direction.

This may get trickier as interest rates swing upward. For this, you will want to tap on the expertise of financial advisors that have handled volatile market conditions. It would be better than not having a game plan and simply going with the flow of the markets. That might sound like the better solution, but a lack of a plan can be a really bad thing when the market begins to swing in the other direction. The ebb and flow of business can be enough to leave you dizzy, but you’ll eventually get the hang of things over time. It’s also a matter of knowing when to reach out for help, something that businesses must do if they expect to survive in the long run. After all, there’s no shame in admitting that you have strengths and weaknesses as a business owner.

Planning your business around interest rates is downright impossible, because they fluctuate so much. However, you can indeed look into cash management solutions that have some flexibility worked into them. Good luck!

PPI When Emergencies Happen

Chances are that you have heard or seen the letters PPI but did not really know what they stand for. PPI is for covering repayments on loans and money that you owe on credit cards. Usually, this is sold at the same time the purchase transaction takes place. This is payment protection insurance and it could be a very useful insurance to have. Since these are financial transactions, it is not a big surprise that the PPI is primarily sold by banks. Basically, this is a way for the lender to make certain that he will receive the money due, in case the borrower cannot make repayments.

The thought is a good one for the buyer as well because you really never know when an illness or loss of work can happen. Normally, when a mortgage is arranged, a payment protection insurance is an add-on to the loan. This is a protection for both the lender and the person making the payments each month. If anything were to happen that may prevent them from earning income, everyone is covered.


The PPI pays for the the bills when emergencies happen. It provides peace of mind and protection for everyone in the family in the event of any emergency. The payment protection insurance is sometimes referred to as credit insurance. It can also work for car loans as well as home mortgage borrowing. If your loved one is suddenly ill and he is the borrower, if he dies this will ensure the repayment of your loans. It is a cheap income protection plan and home protection plan for the family.

If the family breadwinner loses his job, the PPI will pick up the slack while he is sick or injured and cannot work. The payment protection insurance is paid in the event of a claim and your family will not need to worry about being uprooted from their home. The money will go to the company that extended the credit originally but this will give the family the means to cope financially.

It may not wind up not benefiting anyone at all if attention is not paid to the details at the time you are making the initial purchase. Pay attention to the policy and especially the eligibility conditions. Many people are not even aware aware that they even have this kind of insurance. There is no better time than today to double check your own financial papers. Many people have actually been conned into buying a policy by lenders.

 

Should I Combine My Insurance Cover?

As we all know, bad things happen to the best of people. Losing your house or car to an accident is a loss that you may not be able to recover from, so it’s best to make sure you can get peace of mind with the right insurance. Home and car insurance are probably several of many financial premiums you have to stay on top of. With your documents taking time-consuming organisation, it can be a better option to combine your insurance cover under one insurance company.

Some people might be wary of putting all their eggs in one basket, but this approach will make insurance more manageable for you. It may even save you money!

The Advantages

Many insurance companies offer discounts if you sign up solely with them because businesses are jealous and they want your custom all to themselves. As an exclusive client, you will receive a convenient, single bill every month so you don’t get swamped down with complicated paperwork. After a long day at work, the last thing you want to be doing is leafing through a pile of financial documents. It also means, if you need to make a query or renew your policy, you don’t have to ring up several different companies and keeping on top of your insurance premiums becomes much easier.


Possible Disadvantages

Be careful when it comes to signing up with one single insurer; even though it is more convenient to go with whatever comes your way, you have to make sure you’ve picked the right one for you. Ask questions about how they want you to make your payments; if you have to use multiple cheques to pay off your bills, rather than one lump sum, it could actually make your life all the more complicated.

Also, if you already have low insurance rates, it may not be worth merging your insurance policies. You might not get a better deal, so if money is your main concern, depending on the insurance company, it may be better off staying with what you have. Get a multiple policy quote to compare prices effectively.

Making The Switch

However, if the positives outweigh the negatives, then it is wise to change your insurance now. It works just like signing up for a new insurance policy.

The golden rule you should always stick by is: compare quotes. Sure, your current insurance company is familiar, so if they offer you a combined insurance deal you may be tempted to take it there and then. The best thing to do is to go online and compare home insurance prices so you get the best deal for your money.

As soon as you’ve found the right combined insurance policy, you can terminate your previous insurance coverage. Time this well however, because if you cancel too early, you may find that you are not covered within that small window of time. The chances of you suffering from an accident then are slim of course, but even so, it’s foolish to gamble when you could be paying out vast sums of money. Best to err on the side of caution.

This guest post was written by Tony on behalf of SO Switch