According to studies conducted by The Advisory with data from Rightmove* March is the best month to sell and that houses put on the market in March took the fewest number of days (57 days) to go under offer.
So perhaps you're looking at selling your home, which may come with all sorts of financial considerations. From remortgaging to raising funds to afford your moving costs and legal fees, or perhaps securing life cover to cover your mortgage should the worst happen, or even ensuring that the new house is covered by suitable building insurance.
No matter your plans for the upcoming months, we're here to help you and your finances, so don't be afraid to reach out for any support you may need.
Let-to-buy is when you rent out your existing home and buy a new one to live in.
Essentially, it involves having two mortgages at the same time. You convert your existing mortgage to a buy-to-let mortgage so you can let out your current home, and then take out a standard residential mortgage on the home you're buying.
Let-to-buy could also be suitable for homeowners in the following situations:
- You're in a hurry to move to a new home and can't wait to sell your current property.
- You have struggled to sell your home due to market conditions.
- You want to buy a property with a partner but maintain ownership of your current home.
- You're moving elsewhere for a few years but plan on moving back to your home in the future.
Let-to-buy mortgage lending criteria
When switching to a buy-to-let mortgage, your eligibility will be based on how much rental income you can bring in from the property you're letting out, rather than how much money you earn.
Specialist let-to-buy mortgages are on offer from a handful of providers, and you'll generally be required to meet the following criteria:
- Borrowing limit of 75%-80% of the value of your current home: if you want to release equity when remortgaging you'll need to factor this in to your calculations.
- Proof that you'll bring in higher rent than your mortgage repayments: most lenders require rent to cover around 145% of monthly repayments.
- Proof that you're buying a new home at the same time as switching your mortgage: they'll usually request a copy of your mortgage offer for your new home.
- Same solicitor for both transactions: this isn't always required but is by some lenders.
- Maximum age: 70 or 75, usually.
It is highly recommended that you use a mortgage broker for this process, as there can be various complexities involved.
If you think a Let-to-buy would suit you, get in touch today.
Think carefully about securing other debts against your home. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it. Some forms of Buy to Let mortgages are not regulated by the Financial Conduct Authority
Buying a new home
If you die before your mortgage is repaid, then the responsibility to complete payments falls to someone you love. Life insurance enables you to be proactive about ensuring those you care for can meet those financial commitments after you’ve gone.
Decreasing cover life insurance is a type of cover that helps if you have a repayment mortgage or other sizeable reducing debt. The longer your cover is in place, the less is paid out. This is because your debts are also decreasing, and the insurance is there to help cover these payments. The monthly premiums for this type of policy may also be lower.
If you have an interest-only mortgage, you might be more interested in level-term life insurance. This is where payouts are fixed and the policy is in place for a pre-determined amount of time. The advantage of this kind of cover is that your family’s payout would be the same whether you died a year into your policy or a year before it expired.
Just married
If you’ve recently become engaged or married and are joining families and assets, it can make life easier to know you are both covered if one of you were to die. Life insurance enables you to make financial contributions to your partner’s well-being after you’ve departed – which is a beautiful way to honour your marriage vows.
The type of policy that you take out could be single – i.e., only covering you – or joint. A joint policy is usually cheaper than purchasing two single policies, but in most instances, it only pays out once, if you make a claim, you are no longer covered – the surviving partner would need to take out their own individual policy after that.
Two single policies can pay out upon the deaths of each policy holder and can take away the complexity in the unfortunate circumstance that the relationship comes to an end.
There are pros and cons to both types of policy, but it's important to know that if a relationship breaks down, an insurance provider may not be able to divide a joint life policy into two single policies. Also, if you claim on a joint policy and choose to apply for a single policy later in life, it can be expensive because premiums increase with age.
Having a baby
The cost of raising a child is expensive, even before factoring in considerations like private education and university contributions. There are policies available that run until your child reaches maturity – and after they’re 18, it’s up to you what “maturity” means.
Providing for your child to protect them against the unexpected is a way to give yourself peace of mind and enjoy the present with them more fully.
Level and increasing cover term insurance are policies which pay out lump sums if you die within your agreed term. If you wish to leave a sum of money to your kids rather than pay off debts, then consider an increasing or level term policy.
Planning for a funeral
According to British Seniors Funeral Report 2021, between 2016-2021 the average cost of a funeral was around £5,631. Over 50s policies as well as level and increasing term policies can be used to contribute towards funeral payments.
Over 50s life cover differs from term life in that there is no fixed length to the policy; it simply exists as long as you live and pays out upon your death. That doesn’t mean to say that you will pay indefinitely for a fixed sum of money though. You will stop paying premiums when you pass away, on your 95th birthday or on the policy anniversary date.
The payout doesn’t necessarily need to contribute towards your funeral, however if that is your main motivation for taking out the policy then you might also want to consider a Funeral Benefit Option.
Inheritance tax
Another reason people may decide they need life insurance is inheritance tax. Inheritance tax has become a bit of a bogey man for those intending to leave money for their children once they die. Bills can run into tens of thousands of pounds, which can make a significant dent in your children’s inheritance. However, if you were to buy a life insurance policy that covered the tax bill, they could enjoy everything you intended them to receive.
You may also want to put your insurance policy into a trust. If the conditions of your trust are met, then this means that your assets no longer belong to you, but to the trust. In accordance with HMRC rules, your assets could then be exempt from inheritance tax. You would be able to decide how the trust is managed, for example whether your assets go straight to the beneficiary after your death or are retained by a trustee until your beneficiary reaches a certain age.
Trusts come with important legal implications, and should only be entered into after thorough discussion with an impartial legal or financial consultant. Once you have placed your policy in trust, it is very difficult to undo this, so being certain of what you are doing beforehand is crucial. There are several kinds of trust available, so it is also important to think long-term about how you want your money to be handled when considering this path.
Inheritance tax and Trusts are not regulated by the Financial Conduct Authority
The next generation
Getting older is a fact of life, and has a tendency to make us reflect. If you are at such a point in your life – whether due to age, ill-health or any of the above reasons – then the financial security of the next generation will be on your mind. Life insurance helps you put these worries to rest and focus on enjoying the future.
If you're facing one or more of the reasons above, get in touch to see if we could help secure you a suitable life ocver policy.
If your parents are over 55 and looking at their available finances as they approach retirement, they may consider equity release. But as their children, do you fully understand what that means, and do they?
While Equity Release is a suitable solution for some, it may not be for all and a qualified adviser will talk to clients about other options available before pursuing equity release.
This may include:
- Downsizing
- Applying for means tested benefits such as pension credit or council tax reductions
- Selling and moving into rented accommodation
Equity release has disproven a lot of the stigmas attached over the years, but many still have reservations based on misconceptions. For example, your parents may be worried about leaving you and other beneficiaries an inheritance and having that ability stalled by releasing equity from their property.
While the equity release and interest would be settled on death or admittance to long-term care, many products offer an inheritance protection feature where your parents could retain a percentage to ensure an inheritance could still be received by their loved ones.
Another concern is that they could end up owing more than they borrow when the interest accrued is also added. However, it should be noted that equity release products are highly regulated by the Financial Conduct Authority (FCA) and enforced by the Equity Release Council is the ‘no negative equity guarantee’ where this product won’t end up costing the client more than they have available upon sale of the property.
Many equity release advisers would encourage their clients to invite their children and/or other beneficiaries to their equity release appointments and meetings to fully understand the products on offer and the implications for their parents too. While this is a product that could benefit them and their finances, it is important to arrange discussions with a qualified adviser who can recommend the best options available.
If you think equity release could be an option for your parents, encourage them to get in touch with us for a no obligation conversation.
This is a lifetime mortgage. To understand the features and risks, ask for a personalised illustration. Check that this mortgage will meet your needs if you want to move or sell your home or you want your family to inherit it. If you are in any doubt, seek independent advice.
With the average price of both petrol and diesel once again hitting new record highs this month, rising to 152p/L and 155p/L respectively according to the RAC**, it's more important than ever to save on filling up by buying in the right place. And, if you take steps to make your car more fuel efficient, you can cut costs further...
Take a look at these 6 simple tips to making your car more fuel efficient:
Keep your tyres inflated
Lower tyre pressures increase drag on a car, meaning you need more fuel. So regularly check the pressures are correct (overinflating your tyres will also use more fuel) and your car will need less oomph to keep it moving.
Declutter your car
The lighter your car is, the less effort it needs to accelerate. By clearing out junk from the boot and not carrying any unnecessary weight, you can save a little more money. Any extra weight you ride around with ups your fuel consumption – while lightening the load won't make the biggest difference, every little helps towards keeping it down.
Take your roof rack off
A roof rack, even unused, adds wind resistance to a car, increasing drag and making the engine work harder. If you don't need it, take it off, along with anything else inefficient. Even closing the windows and removing any flags will make the car run slightly more efficiently.
Turn off air-con at lower speeds
Air-conditioning uses engine power and therefore fuel – so make sure it's turned off unless you really need it. The general consensus is it's more efficient to drive with the windows down and the air-con off at lower speeds, but at higher speeds it's better to use the air-con and keep windows up due to the extra drag caused by having windows down.
If you're not using your air-con, it's worth turning it on once in a while as not using it can mean it stops working.
Don’t fill it up with fuel
Fuel is heavy, so by filling the car up you're adding quite a weight. The less fuel your car has in it, the more efficiently it drives. If you fill up slightly more often and put less in (to 1/2 or 3/4 full), it'll make the car run more efficiently.
Save cruise control for motorways
On long, flat roads, cruise control helps you save on fuel by maintaining a constant speed, thus removing unnecessary acceleration. But used regularly on roads that aren't flat, it will increase how much fuel you use because it's slower to react to changes in gradient, meaning it will accelerate for longer than a driver would when going up a hill. Motorways are usually flat, so reserve it for when you can cruise along.
