Thursday, February 28, 2008

Why Re-mortgage?

It is estimated that more than half of all borrowers – that is most of the people in the UK - are paying too much for their mortgage each month. Usually these people are paying a standard variable mortgage rate when there are lower rates available from other providers. Unsurprisingly banks are unwilling to let borrowers flit between mortgages once they have them hooked on to a high rate and in recent years mortgage and re-mortgage fees have rocketed. We had to pay for those fancy introductory rates somehow.

Many people do not see re-mortgaging as a solution, but it can often prove an economic option for people who feel they are paying over the odds. Lenders are never keen to brag about cheaper deals once they have you signed up, but even so these deals are there for people who ask. In fact switching provider will often result in lower monthly payments, though huge re-mortgage fees can cancel out much of the benefit.

As a result it is often difficult to know whether it makes sense to re-mortgage, and generally it comes down to a case of ringing round for some quotes and then doing a few sums on the back on an envelope. Obviously, you need to make sure that the lower rate of interest you get from changing provider is not lost through the high charges that lenders demand for a switch.

With the mortgage market in the condition that it is, it is now increasingly difficult to find an eye opening deal, but that is not necessarily a reason to give up. If you are struggling to keep up with payments it may well be worth considering a re-mortgage and finding out about the options open to you. Banks are never reluctant to accept more of your money, and if they feel you would benefit from having longer to pay off your mortgage then they are likely to do what they can to help.

In any case this is not a process that you have to undertake on your own. There are a plethora of financial advisers who can help you, though it is worth checking exactly who they are employed by. Some work for lenders and will therefore only recommend products from one mortgage provider or a small panel of providers.

But there are plenty of independent mortgage brokers who will look at the whole of the mortgage market in a bid to find you the best deal. Alternatively you can you use price comparisons sites on the internet to give you a rough idea of whether re-mortgaging could prove cost effective. The free quotes they offer do not always take all the conditions and features of products into account however. Though on offer may appear cheaper it may exclude features that would save you money in the long-run, and it is always worth checking these over before you commit.

Be aware also that brokers may take commission from the provider they recommend to you, and also that some advisers will also charge you for independent mortgage advice. As with any major financial decision, the best advice is always to shop around, and not simply trust the opinion of the first broker you come across.


Tuesday, February 26, 2008

Shop Around For Mortgage Payment Protection Cover

Mortgage payment protection cover can be a valuable product to have in your corner if you should find yourself incapable of working. Losing your income through accident, illness or unemployment could leave you struggling when it comes to the financial commitments of your mortgage. However, if you would be eligible to claim against a protection policy then payment protection for your mortgage could provide you with a tax-free income. You do have to make sure that the exclusions found in all payment protection policies would not stop you from claiming. Suffering a pre-existing medical condition, being retired or self-employed, or not being in full-time employment could stop you from being eligible. These are just some of the reasons frequently found in a policy and providers can add in others. With this in mind, it is essential that you compare not only the quotes but also the terms and conditions.

Exclusions are complicated so do look into them very carefully. While one of the exclusions is suffering an ongoing illness, this can be overlooked if you have not suffered from the illness within two years of applying for insurance protection. When it comes to those who are self-employed then they would be eligible to claim if they were to stop trading altogether through involuntary means.

Payment protection insurance would provide you with an income that would cover your monthly mortgage outgoings and essential related payments such as insurance. This means that you are able to recover with the peace of mind that your mortgage debt would be safe. Homeowners who believe that the state would step in and provide for them in their time of need may be disappointed. The State does provide assistance but there are very strict criteria to meet. Those who have savings of more than £8,000 or whose partner works full time would not receive a penny. Also, if you took your mortgage out after October 1995 then you would have to wait nine months before you would see any benefit, and then you would only get help with the interest part of the mortgage up to £100,000.

Mortgage payment cover is usually offered alongside the mortgage at the time of borrowing but in the majority of cases this is a very expensive way of taking out cover. A far better option is looking around and buying the cover independently from a specialist in payment protection. There are many advantages of taking out the cover this way, besides the obvious benefit of making huge savings. A lack of information given at the time of buying cover leads many to take out a policy they could not possible hope to claim against. However, an ethical payment protection specialist will make available on their website all the information needed to make an informed decision regarding the policy’s suitability.

The mortgage payment protection cover that a specialist will provide will ensure you have an income from between day 30 and 90 of being unable to attend work. Each month you would get a payment which would continue for between 12 to 24 months if needed. The relief that this payment brings allows you to recover more quickly and leaves you free to concentrate on your wellbeing and, in the case of redundancy, to find another job.


Sunday, February 24, 2008

Mortgage Protection Can Take Over Where The State Fails

Individuals who rely on State support if they lose their income could be at risk of losing the roof over their heads. While some help towards the interest part of the mortgage can be available, you do have to qualify and having more than £8,000 in the bank or a working partner could mean you lose out. Mortgage protection can take over where the State fails, providing you choose the correct policy that will pay out in your circumstances.

While you do have to qualify for mortgage cover it does give far better protection for those who lose their income. The main exclusions include being of retirement age, suffering from a pre-existing medical condition, only working part time or being self-employed. The provider can also include other exclusions so you have to read the terms and conditions thoroughly before taking out the cover. However, suffering from a pre-existing medical condition does not necessarily stop you from claiming. Providing the illness has not bothered you during the last two years you could still be eligible.

Once you have decided that a payment protection policy is suitable you then have to find the cheapest possible quotes. Taking a policy that is offered alongside the borrowing is usually the most expensive option. The cheapest quotes will usually be found with standalone providers and along with this they also offer all the information needed to be able to decide if protection is right for your circumstances. The very best providers can help you to save as much as 40% when compared to the high street lender. Quotes that providers give are based on the amount you wish to cover each month and age when applying, and you usually pay for the policy through monthly premiums.

After finding the cheapest quote and comparing the terms and conditions you can sign up for a policy. The policy would start to pay out once the individual had been out of work for between 30 to 90 days. The policy would then carry on giving the payout for as long as 24 months with some providers, but it can be only 12 months with others. Again, the terms have to be checked.

While a specialist is the best way to get information regarding mortgage protection, in March 2008 comparison tables will introduced in order to help consumers understand policy details. It is hoped that with the introduction of these tables all payment protection products will be easier to compare and choose. They will tell the consumer how much a policy would cost in total and make them aware that certain exclusions exist. They will take the consumer through a series and questions and answers, to ensure they choose the right type of cover for their needs. Mortgage cover is just one type of payment protection policy and income protection might be more suitable. There is also loan payment protection and all three policies will pay out if you should become unable to work. It is just a matter of deciding which policy is the most suitable for your particular circumstances before buying.