Did you know you can use equity release for gifting? Also known as a lifetime mortgage, you can help your children/grandchildren have the wedding of their dreams. It may also fund your income for the year. So this could help you take time off to help the kids. Or help you plan and enjoy your own wedding.
To qualify for a lifetime mortgage, you'll need to:
• Be aged 55 or over
• Own (or be buying) your home, with little or no mortgage left to pay
• Be buying (or own) a home worth at least £70,000 or £100,000, depending on your property type
A lifetime mortgage can help you gift your loved ones a 'living inheritance'. Rather than leaving a lump sum after you pass. You can see them move into their new home or help them with the cost of a wedding. Using the value of your home.
If you're planning on celebrating a wedding in 2024, you're looking at an average spend of £20,775*. However, most young couples preparing for upcoming nuptials haven’t saved enough. And so, we are seeing more and more parents chipping in!
You can take a loan, usually for around 50% of the property's value, and there are no monthly repayments. The interest rolling until your death when the home's sale clears the debt. But the total debt can never exceed the overall value of the house.
The practice of borrowing against your home to help fund a wedding for your children or grandchildren is growing. The rising cost of getting married has made weddings a popular reason for lifetime mortgages.
Borrowers should remember that lifetime mortgages have higher interest rates than their regular counterparts.
There is no hiding that weddings are expensive. Using many vendors and venues carries risks. Wedding insurance covers the run-up to the big day or the day itself. However, a change of heart or cold feet won't count.
What does wedding insurance typically cover?
Four in five young adults consider taking out critical illness cover (CIC) once they understand the product. But the biggest holdback is understanding CIC—or even hearing about it!
CIC can help protect your family should you fall ill or need medical treatment. This cover ensures the bills are paid while putting food on the table if you cannot work.
For many people, being diagnosed with a serious condition would create financial problems. Critical illness coverage can be a lifeline for families to keep on top of bills in difficult times. It helps pay off the mortgage. Or even pay for rehabilitation support.
We looked at the research. The main reason young adults have or would consider taking out CIC is to give themselves and their families peace of mind. To pay for private medical treatment if needed. And to use the money to keep on top of bills.
According to research by Beagle Street*. When asked how their family would cope if they became seriously ill and couldn't work. 20% of respondents said they did not want to think about it. While 10% noted that their family would not cope as they are the primary wage earner. A similar number wasn’t sure what to do.
Cost was the most important factor when considering taking out cover. This is followed by coverage of various illnesses and easy access to healthcare advice and support.
This research shows that CIC needs to be more accessible.
Are you among the many young adults considering CIC once you understand the benefits? Or do you know a young adult who would benefit from more information? Has this changed how you feel about CIC?
We can discuss policies to ensure you and your family are looked after. Giving you peace of mind for the future.
We'd love to hear from you! Reply to this email to answer our poll:
a. Yes, I have critical illness cover (and think everyone should have it!).
b. No, I don't have critical illness cover, but I know I should. Can you tell me more?
Hot on the topic of weddings, we dive into another significant life event. Here's our mortgage guide for first-time buyers…
Do you know the difference between a fixed and a variable mortgage? Have you heard of 'loan to value'? Are you curious about what help is available for first-time buyers? Or are you a supportive parent who wants to help your loved ones with their first purchase?
The easiest way to get quick answers to all these questions is to hit the 'reply-to' button. We'll be in contact to discuss! But in the meantime, here is a quick guide to this exciting process. (Feel free to forward the email to any friends or family who would find this relevant!)
Q. How big a deposit will I need to get a mortgage?
A. You likely need a minimum deposit of 10% to get a good variety. This is changing with lenders offering low-deposit deals. Yet, to get a good mortgage interest rate, you'll often need more than 20% of the home's value as a deposit. And more than 40% for the best deals.
The bigger the deposit, the better the interest rate. Plus, the lower your monthly repayments, the cheaper the mortgage! The difference between a 5% and 10% deposit is huge; the next big jump is 20%, then 40%. So, if you can push yourself up a band (or perhaps ask parents to help), do it.
However, we are seeing the introduction of the 99% mortgage, meaning you’ll need to save much less to secure a home. Ideal for those without family support or extensive savings. The flipside is a much (much) bigger mortgage. This is one to speak to a broker about to ensure you can afford to pay the extended repayments.
Q. Can you explain what "LTV" means?
A. LTV stands for the loan-to-value ratio (LTV), the percentage of the property value you're loaned as a mortgage. It's the proportion that you're borrowing. Lenders often use it to indicate how big a deposit you need, and you'll see it in Best Buy tables.
To calculate this, subtract your deposit as a percentage of the property value from 100%. So if you have a £20,000 deposit on a £100,000 home, that's a 20% deposit, meaning you owe 80%. The LTV is 80%.
Q. Are there any other schemes I should look at if I'm struggling to afford a mortgage?
A. Yes. But at the end of the day, you must ensure your finances are suitable. One option is asking family/parents to act as a guarantor. Many first-time buyers rely on help from mum and dad for their deposit. Several mortgages incorporate parental finances in one way or another.
Q. What about if I'm self-employed?
You'll need three years of business accounts. Though two can be enough. Usually, they must be signed off by a chartered or certified accountant. If you can't show business accounts, then you will need to show two or three years of tax returns.
Note you'll be assessed on profits, not turnover. As many company owners try to minimise declared profits to pay less tax, it could be harder to get a larger mortgage.
Q. What paperwork will I need?
A. Before you start, gather everything you need, but double-check with a lender or broker as early as possible. You don't want to waste time waiting for paperwork to arrive.
Checklist:
- Proof of income (often last three months' pay slips or 2/3 years' accounts if self-employed).
- Proof of deposit (plus written confirmation if getting a gift towards the deposit that it really is a gift & not a loan).
- Your last three months' bank statements.
- Proof of bonuses/commission.
- Your latest P60 tax form (showing your income and tax paid from each tax year).
- SA302 tax return forms — mainly for the self-employed. Lenders may want to see copies of your self-assessment. These can take weeks from HMRC, so be prepared in advance.
But don't forget, speaking with a broker can help massively. And there are no fees for you to use one. Make the most of expert advice.
Chat with us today to take the stress out of mortgage planning!
Risk warning: 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. You may be charged a fee for mortgage advice.
The NHS provides comprehensive treatment to anyone. Regardless of their ability to pay. However, with extended wait times and limitations of what's available. Private care can bridge the gap.
Health insurance covers planned consultations, treatments, and operations. But you may need to watch out for creeping expenses. We explain how it works, what to watch out for. And how to keep costs as low as possible.
First step. Familiarise yourself with the different types of health insurance plans. Such as private medical insurance (PMI), health cash plans, and critical illness cover. Understand what each plan covers. Including hospital treatments, specialist consultations, diagnostic tests, surgeries, and therapies.
Next step. Evaluate your healthcare needs and preferences to determine the level of coverage you require. Consider all factors. Like age, medical history, existing conditions, family health history, preferred hospitals or specialists, and budget.
Finally. Select a health insurance plan that aligns with your healthcare needs and budget. Look for plans that offer comprehensive coverage. Access to a wide network of hospitals and healthcare providers. Timely appointments and specialist consultations. Plus, additional benefits such as wellness programs or mental health support.
Looking to reduce your fees?
If you already have cover, try haggling to reduce costs. Health insurance premiums aren't fixed. The price can rise over time, usually annually. (Before you know it, they are higher than when you started!) A comparison can often reveal huge savings. Which is great if you've never claimed.
But most providers won't accept you if you have 'pre-existing conditions'. It may be better to stick with your current insurer to remain covered. If you have existing conditions that a new insurer wouldn't cover, try asking for a better deal.
Or make the most of your current policy! Take advantage of any additional benefits or services your health insurance plan offers. Such as wellness screenings, health assessments, and preventive care. Or discounts on health-related products or services.
Stay informed about your health insurance coverage, benefits, updates, and policy changes. Be proactive in managing your healthcare needs. Schedule regular check-ups. And seeking medical advice when necessary.
Want more details? Contact us to learn how to make your policy work better
As you can imagine, the average cost of a wedding in the UK can vary massively! Location, venue, number of guests, and level of extravagance will influence the final figure.
The average amount spent by UK couples on their wedding in 2024 comes to £20,775*. But how many guests you invite dictate averages:
50 or fewer guests – £12,006
51-100 guests – £20,340
101-150 guests – £25,175
151 or more guests – £37,431
We break down the costs:
Venue hire and catering expenses typically account for a significant portion of the wedding budget. Ranging from £5,000 to £10,000 or more.
Likewise, the cost of wedding attire can really fluctuate! From the big-ticket bride's dress to the groom's suit. Bridesmaid dresses and groomsmen attire. Depending on designer labels and customisation, the total can range from £1,000 to £3,000, or higher!
Capturing the big day, a wedding photographer and videographer's average cost is around £1,500 each.
Decorations, floral arrangements, and venue styling can add a few surprising pounds to the budget! From £1,000 to £5,000, it really depends on the scale of decor, floral choices, and any additional embellishments. Think wedding favours, wedding stationery, gifts for the bridesmaids or groomsmen.
Costs for entertainment, such as live bands, DJs, or other performers, can range from £500 to £2,000 or more. Depending on the entertainment type, duration, and any special requests.
Extra costs can include transportation, wedding cake, hair and makeup services. Plus, any pre-wedding events like engagement parties or rehearsal dinners.
And the most important part, the average cost of a celebrant sits around £500.
It's important to note that these figures are averages and can vary significantly based on location. An average wedding in London costs £36,778, while the average wedding in Wales is £15,529!
Whatever your budget is, and what you think you'll spend, budget for at least 10% more. Presents for close family, stamps for sending out invites—it's the little unexpected things that all add up.
