Category Archive Mortgages

Bymapfinancesadmin

Home Reversion Plans

A home reversion plan ‘unlocks’ all/some of the capital tied up in your home. It is not a mortgage and involves you selling your home, or a proportion of it, to a home reversion plan provider in return for either a monthly income or a lump sum. You retain the right to live in the property as a tenant (but paying no rent) until you die or move into a nursing home on a permanent basis.

There are two main types of Home Reversion Plans:

  • Full reversion; and
  • Partial home reversion.

With full home reversion, you sell your home in full and have the right to live in the property as a tenant until you die or move into a nursing home on a permanent basis. The home reversion provider will own your home outright and will benefit from any increase in its value from the date of sale.

With partial home reversion, you sell a specific percentage of your home and have the right to live in the property as a part-owner/part-tenant until you die or move into a nursing home on a permanent basis. When the property is sold, the proceeds are split accordingly to the equity share owned by both you and the home reversion provider.

You may not be able to transfer your partial ownership of the property at a later date as this will depend on the conditions set out within the agreement between you and the home reversion provider.

Many reversion plans require you to pay rent and is often only a nominal value i.e. £1 per month. The actual amount you will need to pay should be disclosed before any agreement is made.

With a partial home reversion plan, you can leave the unsold proportion of the value of your property to your beneficiaries, but there are disadvantages:

  • When you sell your home in full, you do not benefit from any increase in the value of your property from the date of sale;
  • You will not get the full market value when you sell your property (or part of it) to a home reversion provider as providers will typically only pay from 35-60% of your home’s current value; and
  • You cannot change your mind once you have taken out a home reversion plan.

Eligibility depends on a number of factors, such as how much your property is worth, your outstanding mortgage and your age. You will usually need to use the amount released to pay off any existing outstanding mortgage.

Typically the older you are when you take out a home reversion plan, the higher the percentage you will get of your home’s market value at that time.

This is a lifetime mortgage/home reversion scheme. To understand the features and risks, ask for a personalised illustration.

There will be a fee for mortgage advice. The precise amount will depend upon your circumstances but we estimate that it will be £595.

Bymapfinancesadmin

Lifetime Mortgages

A lifetime mortgage is a long-term loan where you borrow money secured against the value of your home to give you a lump sum and/or a regular income.

The loan is repaid to the lender when the property is sold, on death, or when you move into long term care. If there is any money left after the loan is paid off, it will go to your beneficiaries. You retain ownership of your home.

There are two main types of Lifetime Mortgages:

  • Interest-only mortgages; and
  • Interest roll-up mortgages.

With both of the above types, some lenders allow you to take a regular income rather than a lump sum. This can mean that you accrue less interest as interest is only charged on the amount you actually receive, i.e. your monthly payments.

Some lenders also offer a flexible lifetime mortgage, where you can take a smaller lump sum at the beginning, then draw down further borrowings as and when required.

With an interest-only mortgage, you borrow a lump sum secured against the value of your home. You pay interest on the loan each month, and the lump sum you originally borrowed is repaid when your home is eventually sold. You need to be able to afford the monthly interest payments out of your pension or other income.

With interest roll up mortgages, no interest payments are made to the lender. Interest is rolled up and paid on redemption, death or if you move into long term care.

Eligibility depends on a number of factors, such as how much your property is worth, your outstanding mortgage and your age. In addition to any costs incurred in relation to receiving advice, there will be costs associated in settling up any equity release plans.

It is possible to move house and transfer the loan, although trading down to a lower value property could involve the payment of part of the loan. You would need to meet the relevant lender’s lending criteria at the time of the move and your new property would need to provide adequate security.

This is a lifetime mortgage/home reversion scheme. To understand the features and risks, ask for a personalised illustration.

There will be a fee for mortgage advice. The precise amount will depend upon your circumstances but we estimate that it will be £595.

Bymapfinancesadmin

Buy-to-Let Mortgages

Business Buy-to-Let (BTL) mortgages are for those who want a loan to purchase a property to let out and not live in themselves, i.e. they become the landlord.

They are usually more expensive than residential mortgages, but they could help you become a property investor if you so wish. There are two types of BTL mortgage:

  • Consumer Buy-to-Let (CBTL) – any BTL contract not entered into by an individual ‘wholly or predominantly’ for the purpose of a business. They are for people who have become a landlord by default as opposed to making an active business decision, i.e. where a property has been inherited or has been previously lived in and the individual is unable to sell it, so resort to letting it out.
  • Business Buy-to-Let (BBTL) – any BTL contract for landlords who buy property specifically to rent out, so are only suitable for people who want to invest in houses and flats.

Buy-to-Let mortgages are only suitable for people who want to invest in houses and flats. Investing in property is risky, so you shouldn’t take out a BTL mortgage if you can’t afford to take that risk. They are in many ways just like residential mortgages, but with some key differences:

  • Interest rates on Buy-to-Let mortgages tend to be higher;
  • The minimum deposit for a Buy-to-Let mortgage is usually a quarter (25%) of the property’s value (some lenders offer deals with a 20% deposit, others want a 40% deposit);
  • The fees tend to be much higher;
  • The level of borrowing is typically based on the level of rental income; and
  • A 3% stamp duty surcharge applies, which applies to the entire purchase price of the property.

Most BTL mortgages are interest-only, which means you don’t pay anything off the lump sum borrowed each month but, of course, at the end of the mortgage term you need to repay the capital owing in full.

Unlike obtaining a mortgage on a property you wish to live in, BTL mortgage lending is not regulated by the Financial Conduct Authority (FCA).

Your home may be repossessed if you do not keep up repayments on your mortgage.

There will be a fee for mortgage advice. The precise amount will depend upon your circumstances but we estimate that it will be £595.

Bymapfinancesadmin

Residential Mortgages

A mortgage is a loan taken out to buy property or land. Most run for 25 years but the term can be shorter or longer. The loan is ‘secured’ against the value of your home until it’s paid off. If you can’t keep up your repayments the lender can repossess (take back) your home and sell it so they get their money back.

The money you borrow is called the capital and the lender then charges you interest on it till it is repaid. The type of mortgage you are able to apply for will depend on whether you want to repay interest-only or interest and capital.

Invariably today, residential mortgages are only granted with full repayment (interest and capital), meaning you pay the interest and part of the capital off every month. At the end of the term, you should manage to have paid it all off and own your home. With interest-only on the other hand, you pay only the interest on the loan and nothing off the capital, meaning at the end of the term, the capital outstanding is owed to the lender.

You are responsible for ensuring a credible repayment strategy is in place so you have sufficient funds available to fully repay the loan at the end of the mortgage term. Failing to maintain an adequate repayment strategy could result in you having difficulty in fully repaying the mortgage capital when due.

There are different interest rates available from all lenders, to suit varying requirements and situations, and these combined within a mortgage is termed the product:

  • Fixed interest rate/Stepped fixed – you pay a set amount each month for the duration of the fixed (or initial) period, thus allowing you the security of knowing your exact monthly commitments in the early years of the mortgage. You will be unaffected by changes in the underlying interest rates but if interest rates fall below the fixed rate, you will continue to pay the higher, fixed amount.
  • Variable interest rate – the interest rate can rise and fall in line with market conditions and so does involve a degree of uncertainty as your monthly repayments can vary and increase, but will allow you to benefit from a fall in interest rates.
  • Discounted variable interest rate – again, this involves a degree of uncertainty as your monthly repayments can vary and increase but it allows you to have a discount on your mortgage payments for a specific period. Also, to minimise monthly payments, it allows you to benefit from a fall in interest rates.
  • Tracker mortgage – this utilises a tracker interest rate, meaning the interest rate is linked to either the Bank of England Base Rate or LIBOR and is equivalent to that rate plus a certain percentage. This means your monthly premium may vary and can increase and therefore involves a degree of uncertainty, but this does allow you to benefit from a fall in interest rates.
  • Capped rate – a capped interest rate means the lender has put a “cap” (ceiling) on the maximum interest rate that can be charged. It provides the security of knowing your monthly repayments will not rise above a certain amount, whilst allowing you to benefit from any drop in the rate below the cap.

Your home may be repossessed if you do not keep up repayments on your mortgage.

There will be a fee for mortgage advice. The precise amount will depend upon your circumstances but we estimate that it will be £595.

Bymapfinancesadmin

Are your clients getting the right financial advice?

Speak to a financial adviser who can help you

Reading the national and financial press recently, it is very apparent that a lot of people don’t know where to turn for financial advice. With most Financial Services providers having withdrawn from having a local presence, and the ongoing onslaught of bank closures in the average UK high street, it is becoming even more confusing for people to know where to go or who to call for good financial advice.

Establishing a relationship with an Independent Financial Adviser (IFA) you can trust to handle all of your financial needs is critical to achieving your financial goals. Not all Financial Advisers are the same, so you must beware!

The two main types of financial adviser are those who are independent and those who are not. All advisers must tell you what services they offer from the outset. To be called an Independent Financial Adviser, they must be able to offer a broad range of retail investment products, and give consumers unbiased advice based on a comprehensive analysis of the market.

Restricted or tied advisers on the other hand can only recommend certain types of investment products or products from a limited number of providers (possibly only one if tied). It is important to establish at the outset what type of advice an adviser can offer, to ensure you get the best investment(s) to suit your needs and requirements.

All advisers must be properly qualified to give financial advice and hold the Diploma in Financial Planning, or an equivalent qualification. Advisers must also prove that their knowledge is up-to -date through continual professional development (CPD).

Some types of advice require an adviser to have specialist qualifications – pension transfers and equity release for example. Any companies offering these services should have advisers within their ranks who are suitably qualified to provide advice in these areas.

Advisers must also be transparent in the fees they charge for both initial and ongoing advice and services.

With Money Advice & Planning Ltd you can rest assured in the services we offer:

  • Non-restricted advice and planning – no matter what financial advice and products you need, we can help.
  • Face-to-face advice from UK-wide trusted advisers – irrespective of where you are in the UK, one of our advisers will be happy to meet you and discuss matters face-to-face.
  • Fees structured to suit requirements – financial advice should never take on a ‘one size fits all’ approach and our fees will be structured and mutually agreed to suit your needs.
  • Tailored service packages – we don’t believe in one-off financial advice and have several service packages available, so your financial affairs are reviewed throughout your journey with MAP.
  • Whole of market non-discretionary investments – our bespoke investment strategy will cater for your needs and requirements, and give you an investment right for you.
  • Quarterly investment reviews – our proactive analysis of fund performance ensures you are always invested in the best areas to suit your attitudes to risk.
  • Recommended funds – we invest using recommended fund lists, which have been tried and tested to deliver successful returns for our clients.
  • Transparency and peace of mind – clients have 24/7 access to their investments through the MAP portal, so they always know how their investment is performing.

Why not get in touch today to see how we can add value to your business and your clients.

The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Links to external sites are for information only and do not constitute endorsement. Always obtain independent professional advice for your own particular situation. Money Advice & Planning Ltd is authorised and regulated by the Financial Conduct Authority.

Bymapfinancesadmin

Offering solutions, not products

What do you think of when you hear the term ‘Financial Adviser’? Does it conjure up the image of someone trying to sell you as many financial services products as possible – life insurance, pensions and savings plans, to name the most common – or do you see someone who can help you achieve your goals in life?

Here at Money Advice & Planning Ltd, we believe our business is about offering solutions to help people to achieve their goals and aspirations in life.

We have heard it said many times that “a goal without a plan is just a wish” and we believe that to be very true. How many people set out on life’s journey wishing to own their dream house, pay for their kids’ education, enjoy their ideal holidays or retire and spend their time playing golf or lying by the pool at their holiday home? Sadly, for many people, the goals and aspirations that they have turn into nothing more than a pipe dream which they will never achieve.

There can be many reasons why this can happen but for many it is down to nothing more than a lack of planning. For others, they see financial products as nothing more than an expense rather than a tool that can help them achieve their goals.

The role of a Financial Adviser is not about selling financial products; it is about offering solutions to help clients achieve their goals and being there over the long-term to make sure that happens. The financial products are the tools the adviser has in their bag to get the job done.

Money Advice & Planning Ltd does what it says on the tin – it provides the advice and planning needed throughout a clients’ journey, to help them achieve their goals, and after all, your goals are our goals!

If you would like to find out about how Money Advice & Planning can help you achieve your goals, please visit us at www.mapfinances.co.uk and use the contact form. Alternatively, call Andrew Singleton on 0345 241 1808.

The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Links to external sites are for information only and do not constitute endorsement. Always obtain independent professional advice for your own particular situation. Money Advice & Planning Ltd is authorised and regulated by the Financial Conduct Authority.

Bymapfinancesadmin

Family Lawyers – how MAP can add value to you and your clients

Judge gavel, scales of justice and law books in courtFrequently, family lawyers will refer their client to an IFA once a divorce settlement has been finalised; the sooner the client is referred, the better it is for everyone involved.

There are a number of areas our advisers can assist a family lawyer with in a divorce settlement. Listed below are a few of those areas where we can work alongside the lawyer.

Gathering and assessing financial information

A financial adviser can assist in gathering all relevant financial information required, as this is a natural part of the advice process they would carry out with their own clients. Areas they would cover are:

  • Income & Expenditure – what will the impact of the divorce have?
  • Savings and Investments – are they joint and therefore need to be split?
  • Pension holdings – do they need to be split or transferred?
  • Protection cover – are they joint and therefore need replacing?
  • Mortgage – is it in joint names and need to be assessed?
  • Assets – what is their value and do they need to be split?

Cash Flow Forecasting

It is important for the client to know as soon as possible the financial impact the divorce settlement will have on them. The IFA will be able to put a forecast in place to project what this could look like. 

Dividing Assets

Who keeps the house, the pension, or other assets? The IFA – based on the financial information they have gathered – will be able to offer advice and options based on the client’s goals, priorities and objectives.

Dealing with financial products

Whatever needs to be done with pensions, protection products, savings and investments, mortgages or other assets – as part of the divorce settlement – the IFA will be able to advise on the best way to proceed and then can carry out the work which needs to be done to make the changes happen.

 

Dealing properly with a client’s financial situation as a result of a divorce is crucial as it can have a major impact on their lifestyle both now and in the future. It is vital they understand all the legal and financial options presented to them, and are able to make informed decisions as soon as possible.

If you would like to find out how Money Advice & Planning can assist with divorce settlements or any other financial issues for any clients, please visit us at www.mapfinances.co.uk and use the contact form. Alternatively, call your local MAP adviser at a time which suits you.

The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Links to external sites are for information only and do not constitute endorsement. Always obtain independent professional advice for your own particular situation. Money Advice & Planning Ltd is authorised and regulated by the Financial Conduct Authority.

Bymapfinancesadmin

Accountants, Lawyers and IFAs – A Team Approach

Business people making introductionsFinancial, legal and tax advice are areas conducted by professionals adhering to their own sets of standards and qualifications, with their own professional bodies and regulators.

These advice professions are no different to other business sectors though when it comes to facing growing pressure to retain their existing clients, and more importantly, to win new clients and discover sources which will provide those new clients.

Legislation such as the Legal Services Act (LSA) and the Retail Distribution Review (RDR) has forced the legal and financial advice professions to introduce more client centric business models and, at the same time, become more competitive. This in turn has created a growing pressure for these advice professions to diversify and expand their business propositions in order to be more competitive.

Working more closely and proactively with a professional IFA can provide a very simple but effective solution to this problem.

Given the overlap between many areas of tax, legal and financial advice, a number of firms have seen the potential for Accountants, Solicitors and Independent Financial Advisers to work together to leverage each other’s client relationships. It provides those clients with a more holistic, joined-up and value-added approach to advice, and at the same time resolves the challenges of retaining existing clients and finding a source of new clients.

If you would like to find out how Money Advice & Planning can add value to your business and your client relationships, please visit us at www.mapfinances.co.uk and use the contact form. Alternatively, call your local MAP adviser at a time which suits you.

The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Links to external sites are for information only and do not constitute endorsement. Always obtain independent professional advice for your own particular situation. Money Advice & Planning Ltd is authorised and regulated by the Financial Conduct Authority.

Bymapfinancesadmin

Why getting the right advice is so important

Speak to a financial adviser who can help youEstablishing a relationship with an Independent Financial Adviser (IFA) you can trust to handle all of your financial needs is critical to achieving your financial goals. Not all Financial Advisers are the same, so you must beware!

The two main types of financial adviser are those who are independent and those who are not. All advisers must tell you what services they offer from the outset. To be called an Independent Financial Adviser, they must be able to offer a broad range of retail investment products, and give consumers unbiased advice based on a comprehensive analysis of the market.

Restricted or tied advisers on the other hand can only recommend certain types of investment products or products from a limited number of providers (possibly only one if tied). It is important to establish at the outset what type of advice an adviser can offer, to ensure you get the best investment(s) to suit your needs and requirements.

All advisers must be properly qualified to give financial advice and hold the Diploma in Financial Planning, or an equivalent qualification. Advisers must also prove that their knowledge is up-to -date through continual professional development (CPD).

Some types of advice require an adviser to have specialist qualifications – pension transfers and equity release for example. Any companies offering these services should have advisers within their ranks who are suitably qualified to provide advice in these areas.

Advisers must also be transparent in the fees they charge for both initial and ongoing advice and services.

As a valued client of Money Advice & Planning Ltd you can rest assured in the services we offer:

  • Non-restricted advice and planning – no matter what financial advice and products you need, we can help.
  • Face-to-face advice from UK-wide trusted advisers – irrespective of where you are in the UK, one of our advisers will be happy to meet you and discuss matters face-to-face.
  • Fees structured to suit requirements – financial advice should never take on a ‘one size fits all’ approach and our fees will be structured and mutually agreed to suit your needs.
  • Tailored service packages – we don’t believe in one-off financial advice and have several service packages available, so your financial affairs are reviewed throughout your journey with MAP.
  • Whole of market non-discretionary investments – our bespoke investment strategy will cater for your needs and requirements, and give you an investment right for you.
  • Quarterly investment reviews – our proactive analysis of fund performance ensures you are always invested in the best areas to suit your attitudes to risk.
  • Recommended funds – we invest using recommended fund lists, which have been tried and tested to deliver successful returns for our clients.
  • Transparency and peace of mind – clients have 24/7 access to their investments through the MAP portal, so they always know how their investment is performing.

Perhaps most importantly of all, we come tried and tested. Read the reviews of just one of our advisers and see for yourself.

The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Links to external sites are for information only and do not constitute endorsement. Always obtain independent professional advice for your own particular situation. Money Advice & Planning Ltd is authorised and regulated by the Financial Conduct Authority.

Bymapfinancesadmin

Setting and achieving financial goals

Get your finances ready for the new yearNow we are into 2018, how many people actually made new year resolutions? You may think this can be too woolly, especially when you make some and never achieve them. It is different in financial services, especially when done through MAP.

Let us start with possibly your main goal – pensions. If you sit down with a MAP adviser and tell them what you would like to achieve and by what date, they could tell you if this was feasible or not. They will be more than prepared to work through things with you to set logical goals, and then work with you over the period concerned to reach them.

Let’s say for example, you would like to get £20k per year in pensions. If we deduct the basic DWP pension of £8,100 per year at age 65, you would only need to get £11,900 per year from any personal pension.

Using very conservative growth rates would give us an indication of how much you would need to save every month to achieve your target. More importantly, when we reviewed your pension at regular intervals, we would keep you updated as to how you stand in terms of achieving your target. Our existing clients find it very helpful when we put things down simplistically like this – finances that are then easy to understand.

If you are saving to repay a mortgage, or maybe even save up enough for a deposit for house purchase, MAP can keep you updated at regular intervals, and also where you are in percentage terms of achieving your targets/goals.

We have seen a lot of people saving money and they just haven’t a clue as to whether they are putting away the right amount or not. And if it’s not, by the time some people realise it, it’s far too late.

Why not put us to the test? Tell us what you would like to save for, how much and for what date, and we will guide you accordingly. We are happy to offer that helping hand, and once we have done this, and with our investment process, we are then happy and willing to work with you to achieve your goals. Moreover, we keep it all in simple language.

For further information on any aspect of financial advice and how MAP may be able to assist you, please contact us on 0345 241 1808 or email us at: enquiries@mapfinances.co.uk.

The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Links to external sites are for information only and do not constitute endorsement.  Always obtain independent professional advice for your own particular situation.  Money Advice & Planning Ltd is authorised and regulated by the Financial Conduct Authority.