Endowments: Selling Endowment Policies
by Gord Collins
Many homeowners in the UK during the 80's and 90's purchased endowment policies. They were sometimes called mortgage endowment policies. These policies were a form of insurance and investment savings that would cover the final cost of the home mortgage when it came due. The policy holder would make monthly payments and these payments were to cover their mortgage and provide for some savings.
Despite intentions or promises, investments can vary in end value, and these policies did not come with a guarantee that they would pay out enough to repay the mortgage at the end of the policy term. What's occurring now is the endowments have a shortfall and cannot pay the owners mortgage payments. In some cases, endowment holders are reporting shortfalls of tens of thousands of pounds.
That has resulted in a lot of stress and disappointment for the policy holders. Many in a state of frustration are surrendering them to the issuing life companies for much less than their value. Life companies include Norwich Union, London Life, Scottish Widows, Prudential Life and many others.
Selling on the Secondary Market
Finance companies have appeared who help find buyers for these policies. Endowment policies can be traded, bought or sold on the open market. A few of the endowment policy trading firms have access to extensive numbers of potential buyers who are looking for the right type of policies to purchase. That means sellers can access buyers who are more interested in their particular policy and that results in a higher price.
Left to their own devices, endowment policy holders don't have access to the right services. Without a strong base of potential buyers, they're not likely going to receive the full value of their policy.
What is a Traded Endowment Policy?
Traded endowment policies or TEPs are policies which the original policyholder has sold and that includes the assignment of all future benefits. Endowment policies are long-term and fairly rigid in design. Many policy holders realized that the endowment policies do not meet their changing financial circumstances and goals. They can borrow against the value of the policy as it is considered a viable asset by banks and finance companies. They can also unload the endowment policy by selling them.
Only about a third of all endowment policies reach full term, (e.g., 25 years). Many are or were cancelled within a few years of their conception. That leaves about a third that may reach full term.
Traded Endowment Claims
Endowment policies were sold as a savings instrument that would help to cover long term home mortgages. Many didn't and won't and that has resulted in a lot of legal or mis-selling claims and the assurance companies who issued them. Financial services firms are offering to help with the process of policy holders selling their policies. To avoid scams and ripoffs in the UK, you should not sell your policy via any firm that does not adhere to the dictates of the Financial Services Authority's Mortgage Endowment Department.
There are numerous companies brokering or selling endowments and policyholders are recommended to ensure these companies are governed by the FSA in the UK.
May 30, 2008
May 19, 2008
California Reverse Mortgage
California Reverse Mortgage
by Simon Lowa
All of us are looking for financial security at the end of the day and hence, we take various steps to insure our future through different forms of investments. A house is perhaps the single, largest investment which an individual will usually make during his lifetime. A substantial amount of financial resources are invested to not just buy a house but also to make it livable and maintain it thereafter. When an individual is in active service with a regular salary or income coming in at the end of each month, it is possible to maintain a house and a certain standard of living. The problem, however, arises when you have retired from regular service and the inflow of a regular salary has stopped. At times like this, a need for financial resources may arise at any point of time and it is then that your house will prove to be a sound investment. A California reverse mortgage, therefore, is the best form of a special category of home loans for any retired, senior citizen residing in California and having a property to his name.
A California reverse mortgage allows the home owner to convert the equity on his house into cash and this amount can be paid to the borrower in a number of ways, be it a lump sum payment or monthly installments. The payment on the California reverse mortgage on your home can also act as a supplement to your funds and social security provisions, if you so desire. In fact, this is one of the most feasible forms of home loans as it does not require any form of repayment on the mortgage for as long as you use the mortgaged property as your primary residence. Also, any of the fees or charges associated with the reverse mortgage plan can be easily financed as they are included as part of the loan.
The payment made to the borrower for a California reverse mortgage is not taxable, as it is just a borrowing shown against your home and since you have already paid for your home when you purchased it, you need have to make any further payments for it. All that the borrower needs to pay towards the mortgaged property are the property taxes, maintenance costs and hazard insurance for the property. The amount of mortgage loan on your house will only become due and payable once you have passed away or have ceased to use the mortgaged property as your primary residence. If the spouse of the borrower is also a legal co-owner of the mortgaged property, then the benefits of such mortgage will also extend to the spouse. The spouse can; therefore, continue to reside on the property till they pass away or decide to move on.
In the event that you decide to sell off the property, which you have placed for a California reverse mortgage, the balance amount of the loan on the property will become due and payable. The borrower can only claim such portion of the sale proceeds from the house, which is over and above the loan balance due. The biggest advantage of the reverse mortgage scheme is that as the house itself stands for the loan, there will never be a debt on the borrower or his heirs and hence more and more retired American citizens, who are homeowners, are opting for this form of house loan and therein, lay the popularity of the reverse mortgage plan. So, if you too have led an independent and financially secure life so far and hope to spend the last days of your life in an equally comfortable and financially independent manner, then the scheme of putting up your house for a reverse mortgage loan is just perfect for you.
by Simon Lowa
All of us are looking for financial security at the end of the day and hence, we take various steps to insure our future through different forms of investments. A house is perhaps the single, largest investment which an individual will usually make during his lifetime. A substantial amount of financial resources are invested to not just buy a house but also to make it livable and maintain it thereafter. When an individual is in active service with a regular salary or income coming in at the end of each month, it is possible to maintain a house and a certain standard of living. The problem, however, arises when you have retired from regular service and the inflow of a regular salary has stopped. At times like this, a need for financial resources may arise at any point of time and it is then that your house will prove to be a sound investment. A California reverse mortgage, therefore, is the best form of a special category of home loans for any retired, senior citizen residing in California and having a property to his name.
A California reverse mortgage allows the home owner to convert the equity on his house into cash and this amount can be paid to the borrower in a number of ways, be it a lump sum payment or monthly installments. The payment on the California reverse mortgage on your home can also act as a supplement to your funds and social security provisions, if you so desire. In fact, this is one of the most feasible forms of home loans as it does not require any form of repayment on the mortgage for as long as you use the mortgaged property as your primary residence. Also, any of the fees or charges associated with the reverse mortgage plan can be easily financed as they are included as part of the loan.
The payment made to the borrower for a California reverse mortgage is not taxable, as it is just a borrowing shown against your home and since you have already paid for your home when you purchased it, you need have to make any further payments for it. All that the borrower needs to pay towards the mortgaged property are the property taxes, maintenance costs and hazard insurance for the property. The amount of mortgage loan on your house will only become due and payable once you have passed away or have ceased to use the mortgaged property as your primary residence. If the spouse of the borrower is also a legal co-owner of the mortgaged property, then the benefits of such mortgage will also extend to the spouse. The spouse can; therefore, continue to reside on the property till they pass away or decide to move on.
In the event that you decide to sell off the property, which you have placed for a California reverse mortgage, the balance amount of the loan on the property will become due and payable. The borrower can only claim such portion of the sale proceeds from the house, which is over and above the loan balance due. The biggest advantage of the reverse mortgage scheme is that as the house itself stands for the loan, there will never be a debt on the borrower or his heirs and hence more and more retired American citizens, who are homeowners, are opting for this form of house loan and therein, lay the popularity of the reverse mortgage plan. So, if you too have led an independent and financially secure life so far and hope to spend the last days of your life in an equally comfortable and financially independent manner, then the scheme of putting up your house for a reverse mortgage loan is just perfect for you.
May 14, 2008
Having Trouble Paying Your Mortgage?
Having Trouble Paying Your Mortgage?
by Joseph Kenny
Taking out a mortgage or a debt consolidation loan, should not be taken lightly. If you rent a home, you are a tenant, if you do not pay your rent., the landlord can evict you. If you own your own home, the company who holds the mortgage or loan can also evict you if you fail to make the payments. The big difference is of course that if you rent, and you are evicted you just have to find another place to rent.
If you are a homeowner, the consequences can be far more severe. You could loose your deposit that you originally put down on the house. As well as the lot of the equity that you have built up and a large part of any improvements like a new kitchen or extension that you have paid for.
Once you start down the repossession road with a mortgage holder that has a lien on your home. It can be incredibly difficult and expensive to avoid an impending repossession order. The best way to deal with this kind of circumstance is to not get yourself into that position in the first place. You need to stick to your agreement with the when the as best as you possibly can.
When taking out a mortgage or a debt consolidation loan you must seriously consider if you can afford the monthly repayments. You must not only consider if you can afford the payments now, but also, if the payments go up because of interest rate rises, will you still be able to pay what is owed each month?
A good mortgage broker will be able to calculate how much you will have to pay if the mortgage interest rate goes up by a certain amount. It is very important that you don't assume the mortgage payment will always be the same, in these difficult financial times. It is quite possible for your mortgage payments to increase considerably.
For example, if your income were £1000 per month, and you took out a mortgage that cost £500 per month. You will probably struggle to make those payments. When you took out your mortgage you wisely decided that £300 per month was what you could afford. Nevertheless, what happens if interest rates increase over two years, and raise your mortgage payments to £400 a month. Can you still make that payment comfortably? Or will it prove too much to handle? This is what can happen with mortgage payments, that is why you need your broker to calculate what the mortgage could possibly go up too, that way you can decide still be able for your monthly payments.
If you get into difficulties do not bury in your head in the sand, you must take action as soon as you feel you are getting into difficulty. There are some options available that could get you out of difficulty. You may consider changing your home loan to a different type of mortgage that may be more suitable for your changed circumstances.
An interest only mortgage can be a great to help you out for a long period of time. Perhaps several years, while your circumstances change. Interest only mortgages are considerably less expensive per month than regular mortgages.
Of course, you are not paying off any of the money that you owe, on the other hand, you are holding on to your home and everything that you put into it financially and otherwise. A few years from now the rates may go down and you may have a promotion at work that allows you to again convert back to a regular type of mortgage.
Another option is to take out a pension mortgage; this is similar to an interest only mortgage. Except when the mortgage reaches its end, the amount that is still owed can be paid off using part of your pension contributions. You should keep in mind that your employer probably contributes a significant amount to your pension, so will be in effect, helping to pay off your mortgage.
A very similar interest-free mortgage system is the endowment mortgage. Like the pension mortgage, you pay only interest on your mortgage, then at the end of the mortgage term. Your endowment, life insurance will pay off the money that is still owed the mortgage company.
These can be good options should you find yourself in financial difficulties and are having problems paying any kind of monthly mortgage. However, as stated earlier you must not wait until the bailiffs are knocking at the door. As soon as you think, you are having problems contact a qualified online broker, who can help you with quality advice as to the best way to deal with your mortgage problems.
by Joseph Kenny
Taking out a mortgage or a debt consolidation loan, should not be taken lightly. If you rent a home, you are a tenant, if you do not pay your rent., the landlord can evict you. If you own your own home, the company who holds the mortgage or loan can also evict you if you fail to make the payments. The big difference is of course that if you rent, and you are evicted you just have to find another place to rent.
If you are a homeowner, the consequences can be far more severe. You could loose your deposit that you originally put down on the house. As well as the lot of the equity that you have built up and a large part of any improvements like a new kitchen or extension that you have paid for.
Once you start down the repossession road with a mortgage holder that has a lien on your home. It can be incredibly difficult and expensive to avoid an impending repossession order. The best way to deal with this kind of circumstance is to not get yourself into that position in the first place. You need to stick to your agreement with the when the as best as you possibly can.
When taking out a mortgage or a debt consolidation loan you must seriously consider if you can afford the monthly repayments. You must not only consider if you can afford the payments now, but also, if the payments go up because of interest rate rises, will you still be able to pay what is owed each month?
A good mortgage broker will be able to calculate how much you will have to pay if the mortgage interest rate goes up by a certain amount. It is very important that you don't assume the mortgage payment will always be the same, in these difficult financial times. It is quite possible for your mortgage payments to increase considerably.
For example, if your income were £1000 per month, and you took out a mortgage that cost £500 per month. You will probably struggle to make those payments. When you took out your mortgage you wisely decided that £300 per month was what you could afford. Nevertheless, what happens if interest rates increase over two years, and raise your mortgage payments to £400 a month. Can you still make that payment comfortably? Or will it prove too much to handle? This is what can happen with mortgage payments, that is why you need your broker to calculate what the mortgage could possibly go up too, that way you can decide still be able for your monthly payments.
If you get into difficulties do not bury in your head in the sand, you must take action as soon as you feel you are getting into difficulty. There are some options available that could get you out of difficulty. You may consider changing your home loan to a different type of mortgage that may be more suitable for your changed circumstances.
An interest only mortgage can be a great to help you out for a long period of time. Perhaps several years, while your circumstances change. Interest only mortgages are considerably less expensive per month than regular mortgages.
Of course, you are not paying off any of the money that you owe, on the other hand, you are holding on to your home and everything that you put into it financially and otherwise. A few years from now the rates may go down and you may have a promotion at work that allows you to again convert back to a regular type of mortgage.
Another option is to take out a pension mortgage; this is similar to an interest only mortgage. Except when the mortgage reaches its end, the amount that is still owed can be paid off using part of your pension contributions. You should keep in mind that your employer probably contributes a significant amount to your pension, so will be in effect, helping to pay off your mortgage.
A very similar interest-free mortgage system is the endowment mortgage. Like the pension mortgage, you pay only interest on your mortgage, then at the end of the mortgage term. Your endowment, life insurance will pay off the money that is still owed the mortgage company.
These can be good options should you find yourself in financial difficulties and are having problems paying any kind of monthly mortgage. However, as stated earlier you must not wait until the bailiffs are knocking at the door. As soon as you think, you are having problems contact a qualified online broker, who can help you with quality advice as to the best way to deal with your mortgage problems.
May 6, 2008
Mortgages and Remortgages
Mortgages and Remortgages
by Andy Silk
If you're using a mortgage to buy your home but are not sure which one will suit your needs best, read this handy guide to mortgage types in the UK. Taking out a mortgage has never been easier.
Variable Rate Mortgages: the lender's mortgage interest rate may go up or down during the life of the mortgage. This usually happens (though not exclusively) soon after a Bank of England interest rate change. Most people consider that opting for a variable interest rate mortgage is best done when interest rates in general are likely to go down. They can then take advantage of these lower rates when they occur. It's a bit of a gamble but if they are right, it could really work in their favour.
Fixed Rate Mortgages: the lender will set the APR (Annual Percentage Rate) for the mortgage over a given period of time, usually 2, 3, 5, or 10 years as an example. The APR for the mortgage may be higher than with a variable rate mortgage but will remain at this 'fixed mortgage rate' level, even if the Bank of England raises interest rates during the term of the mortgage agreement. Effectively, you could be said to be gambling that interest rates are going to go up, above the level of your fixed rate mortgage interest rate. If this happens, your mortgage repayments will be less than with a variable rate mortgage.
Tracker Mortgages: have a lot in common with variable interest rate mortgages in that the APR of the mortgage can go up or down over the term. The key difference between a tracker mortgage and a variable interest rate mortgage is that the lender will set a margin of interest to be maintained above the Bank of England base lending rate. So, as the Bank of England, in line with monetary policy, raises or lowers the base lending rate of interest, so the tracker mortgage interest rate will follow. Over the lifetime of the mortgage, it could be said that the borrower will neither be better off nor worse off because of interest rate fluctuations.
Repayment Mortgages: you will be required to pay a proportion of the capital element of the mortgage (how much you originally borrowed) together with a proportion of the interest that will have accrued on the capital element, with each monthly repayment. In recent years, repayment mortgages have become highly popular over the previous favourite - endowment mortgages. This is because, unlike endowment mortgages, as long as you keep up your monthly repayments, you are guaranteed to pay the mortgage off at the end of the agreed term. Monthly repayments may possibly be a little more expensive but many borrowers say that at least, they have peace of mind.
Interest Only Mortgages: very common amongst borrowers who are looking to secure a second property. The reason being, with an interest only mortgage, the borrower will only be required to make monthly repayments based on the interest element of the mortgage. The lender will require the capital element to be repaid at the end of the term of the mortgage. Again, as with variable rate mortgages, this could be regarded as being a little bit of a gamble because the borrower is hoping that the property will be worth at least as much at the end of the term of the mortgage, as it was at the beginning, allowing it to be sold and the capital element of the mortgage to be paid off. Any capital gain on the property (although possibly subject to tax) is yours. It could be argued that experience tells us that property prices rarely go down in the long term, but it can never be guaranteed.
Capped Mortgages: a combination of the fixed rate mortgage and the variable interest rate mortgage. A cap or ceiling is fixed for a set period of time. During this period, if interest rates in general rise, above the capped interest rate, the borrower will not pay anything above the capped level. Correspondingly, if interest rates fall, then the rate of interest charged by the lender, will also fall so it could be argued that the borrower gets the best of both worlds. It could also be said that a capped rate is like having a set of brakes on your mortgage, but beware, the lender is also likely to charge a redemption penalty on this type of mortgage, making it less portable than some of the other options available.
Discounted Rate Mortgages: here, the lender may offer a reduced level of interest to be charged over a set period at the start of the mortgage term. Many first time buyers or people who expect their salaries to rise considerably during the discounted rate period opt for this type of mortgage but it should be noted that the reduced rate period will come to an end and when it does, the monthly mortgage repayments to the lender may rise sharply. The lender may also charge a slightly higher rate of interest compared with other types of mortgage over the rest of the term of the loan in order to recoup the monies that they have foregone during the discounted rate period. There's no such thing as a free lunch!
Offset Mortgages: an interesting newcomer to the UK mortgage market, although still comparatively rare in terms of choice and availability. The mortgage is linked to the borrower's current account. Every month, the minimum mortgage repayment is paid to the lender but where there is a surplus of cash in the account after other uses and debts have been paid, this is also paid to the lender. Over the months and years, the borrower can potentially pay off their mortgage much quicker and have accrued much less interest than with other types of mortgage provided that a reasonable surplus is maintained in the current account.
So, to sum up, the UK mortgage market has many types of mortgage; any or all of which may be open to the potential borrower, dependent on their circumstances. If you're looking to take out a mortgage, remember that whilst your broker will take care of the vast majority of the work on your behalf, it may still take around 3 months to complete as there is an enormous amount of work that goes on behind the scenes with solicitors and searches, valuations etc. At least now you're armed with all of tehinformation you need on each type of mortgage available to you.
by Andy Silk
If you're using a mortgage to buy your home but are not sure which one will suit your needs best, read this handy guide to mortgage types in the UK. Taking out a mortgage has never been easier.
Variable Rate Mortgages: the lender's mortgage interest rate may go up or down during the life of the mortgage. This usually happens (though not exclusively) soon after a Bank of England interest rate change. Most people consider that opting for a variable interest rate mortgage is best done when interest rates in general are likely to go down. They can then take advantage of these lower rates when they occur. It's a bit of a gamble but if they are right, it could really work in their favour.
Fixed Rate Mortgages: the lender will set the APR (Annual Percentage Rate) for the mortgage over a given period of time, usually 2, 3, 5, or 10 years as an example. The APR for the mortgage may be higher than with a variable rate mortgage but will remain at this 'fixed mortgage rate' level, even if the Bank of England raises interest rates during the term of the mortgage agreement. Effectively, you could be said to be gambling that interest rates are going to go up, above the level of your fixed rate mortgage interest rate. If this happens, your mortgage repayments will be less than with a variable rate mortgage.
Tracker Mortgages: have a lot in common with variable interest rate mortgages in that the APR of the mortgage can go up or down over the term. The key difference between a tracker mortgage and a variable interest rate mortgage is that the lender will set a margin of interest to be maintained above the Bank of England base lending rate. So, as the Bank of England, in line with monetary policy, raises or lowers the base lending rate of interest, so the tracker mortgage interest rate will follow. Over the lifetime of the mortgage, it could be said that the borrower will neither be better off nor worse off because of interest rate fluctuations.
Repayment Mortgages: you will be required to pay a proportion of the capital element of the mortgage (how much you originally borrowed) together with a proportion of the interest that will have accrued on the capital element, with each monthly repayment. In recent years, repayment mortgages have become highly popular over the previous favourite - endowment mortgages. This is because, unlike endowment mortgages, as long as you keep up your monthly repayments, you are guaranteed to pay the mortgage off at the end of the agreed term. Monthly repayments may possibly be a little more expensive but many borrowers say that at least, they have peace of mind.
Interest Only Mortgages: very common amongst borrowers who are looking to secure a second property. The reason being, with an interest only mortgage, the borrower will only be required to make monthly repayments based on the interest element of the mortgage. The lender will require the capital element to be repaid at the end of the term of the mortgage. Again, as with variable rate mortgages, this could be regarded as being a little bit of a gamble because the borrower is hoping that the property will be worth at least as much at the end of the term of the mortgage, as it was at the beginning, allowing it to be sold and the capital element of the mortgage to be paid off. Any capital gain on the property (although possibly subject to tax) is yours. It could be argued that experience tells us that property prices rarely go down in the long term, but it can never be guaranteed.
Capped Mortgages: a combination of the fixed rate mortgage and the variable interest rate mortgage. A cap or ceiling is fixed for a set period of time. During this period, if interest rates in general rise, above the capped interest rate, the borrower will not pay anything above the capped level. Correspondingly, if interest rates fall, then the rate of interest charged by the lender, will also fall so it could be argued that the borrower gets the best of both worlds. It could also be said that a capped rate is like having a set of brakes on your mortgage, but beware, the lender is also likely to charge a redemption penalty on this type of mortgage, making it less portable than some of the other options available.
Discounted Rate Mortgages: here, the lender may offer a reduced level of interest to be charged over a set period at the start of the mortgage term. Many first time buyers or people who expect their salaries to rise considerably during the discounted rate period opt for this type of mortgage but it should be noted that the reduced rate period will come to an end and when it does, the monthly mortgage repayments to the lender may rise sharply. The lender may also charge a slightly higher rate of interest compared with other types of mortgage over the rest of the term of the loan in order to recoup the monies that they have foregone during the discounted rate period. There's no such thing as a free lunch!
Offset Mortgages: an interesting newcomer to the UK mortgage market, although still comparatively rare in terms of choice and availability. The mortgage is linked to the borrower's current account. Every month, the minimum mortgage repayment is paid to the lender but where there is a surplus of cash in the account after other uses and debts have been paid, this is also paid to the lender. Over the months and years, the borrower can potentially pay off their mortgage much quicker and have accrued much less interest than with other types of mortgage provided that a reasonable surplus is maintained in the current account.
So, to sum up, the UK mortgage market has many types of mortgage; any or all of which may be open to the potential borrower, dependent on their circumstances. If you're looking to take out a mortgage, remember that whilst your broker will take care of the vast majority of the work on your behalf, it may still take around 3 months to complete as there is an enormous amount of work that goes on behind the scenes with solicitors and searches, valuations etc. At least now you're armed with all of tehinformation you need on each type of mortgage available to you.
May 3, 2008
Endowment Policies: Selling It The Easy Way
Endowment Policies: Selling It The Easy Way
by Monique Holtman
Even if you are expert when it comes to selling endowment policies, chances are that everyone is going to want a helping hand when they set out to do this. For this reason many people enlist the help of a company that specializes in selling endowment policies. Whether it's because you simply want to ensure that you get the best possible price for your policy or if it's because you don't know the first thing about them, you are going to feel more secure knowing that you have professionals helping you out.
One of the biggest advantages of using a company that specializes in selling endowment policies is the fact that they have inside knowledge of the market that you would never be able to attain. This means that they will be able to get the best possible price for you policy and will also be using good, reputable companies.
If you are a very busy person then it is unlikely that you are going to have time to phone around various different companies in order to try and find out the best price for your policy. Therefore using a company that specializes in endowment policies means that they do all the hard work for you and all you have to do is sit back and wait for the quote they give you.
Few people realize that there are hidden costs involved in selling endowment policies. However, any good company that you use to do this for you should include all the legal and administration costs of selling your policy. This means that you don't have to worry about any hidden costs or surprise bills when you have sold your policy.
When looking for companies that sell endowment policies it is important to use one that is authorized and regulated by the Financial Services Authority. If you do this you can guarantee that they will be governed by the highest standards of ethics and business practice which means that you are going to get a good service.
All members of staff who work for these companies will have had a lot of experience when it comes to selling endowment policies. They are bound to know more than you regarding the topic as this is their job and therefore they will be able to offer you good advice and help you to get the most out of selling your policy when it comes to doing so.
by Monique Holtman
Even if you are expert when it comes to selling endowment policies, chances are that everyone is going to want a helping hand when they set out to do this. For this reason many people enlist the help of a company that specializes in selling endowment policies. Whether it's because you simply want to ensure that you get the best possible price for your policy or if it's because you don't know the first thing about them, you are going to feel more secure knowing that you have professionals helping you out.
One of the biggest advantages of using a company that specializes in selling endowment policies is the fact that they have inside knowledge of the market that you would never be able to attain. This means that they will be able to get the best possible price for you policy and will also be using good, reputable companies.
If you are a very busy person then it is unlikely that you are going to have time to phone around various different companies in order to try and find out the best price for your policy. Therefore using a company that specializes in endowment policies means that they do all the hard work for you and all you have to do is sit back and wait for the quote they give you.
Few people realize that there are hidden costs involved in selling endowment policies. However, any good company that you use to do this for you should include all the legal and administration costs of selling your policy. This means that you don't have to worry about any hidden costs or surprise bills when you have sold your policy.
When looking for companies that sell endowment policies it is important to use one that is authorized and regulated by the Financial Services Authority. If you do this you can guarantee that they will be governed by the highest standards of ethics and business practice which means that you are going to get a good service.
All members of staff who work for these companies will have had a lot of experience when it comes to selling endowment policies. They are bound to know more than you regarding the topic as this is their job and therefore they will be able to offer you good advice and help you to get the most out of selling your policy when it comes to doing so.
Apr 28, 2008
Mortgage: What is a Self-Certification Mortgage?
Mortgage: What is a Self-Certification Mortgage?
by Bill Stone
A self-certification mortgage is a mortgage designed for people who are unable to provide proof of income. This type of mortgage was originally designed for the self employed who historically experienced difficulty obtaining a loan with 'high street' lenders due to not having audited accounts available.
If you are unable to show your earnings due to being self-employed, a seasonal wage earner, or anyone with irregular earnings such as a contract worker or commission-based employee, or in salaried employment with a supplementary source of income, an unsalaried company director, or varying other reasons - a self-certification mortgage could be the best option for you.
A self-certification mortgage is suitable for applicants whose income is not easily verifiable, like the self-employed or those that receive commissions. If you're self-employed, a contractor, have irregular income or multiple jobs, you are probably one of many who know you can afford a mortgage but have difficulty proving your income. They are also quite good for people just starting out in a new career with good steady income and a fair amount of deposit behind them.
It is ideal for self employed people who perhaps have not been in business for the required three years or cannot produce accounts for a three year period but can demonstrate usually through an accountant's reference that they can meet the mortgage payments.
When applying for this type of mortgage you will be required to state your expected annual earnings. The mortgage will be offered on the basis of your likely income rather than you having to provide any documentary evidence.
It caries a higher rate than standard mortgages because statistics show most businesses fail within the first two years of trading. So if you were to be left with heavy debt there is a possibility you could lose your home. However, some mortgages are better than others, and, if cash flow is a problem, it's worth checking out those that offer payment holidays and the facility to pay more when you can.
Fortunately there are a number of competitive self-certification mortgage products available, depending on your circumstances and individual requirements. They are now supported by an ever increasing number of mortgage lenders, including mainstream as well as specialist lenders. Interest rates charged are now far more attractive.
It has become increasingly popular in recent years. However, you should always remember that you will be asked your income on the application. Just because you are in a self certification situation, you should only put down your actual income. To do anything else would not only be fraud, but could also mean that you are unable to afford your mortgage repayments, especially if mortgage rates rise in the future.
by Bill Stone
A self-certification mortgage is a mortgage designed for people who are unable to provide proof of income. This type of mortgage was originally designed for the self employed who historically experienced difficulty obtaining a loan with 'high street' lenders due to not having audited accounts available.
If you are unable to show your earnings due to being self-employed, a seasonal wage earner, or anyone with irregular earnings such as a contract worker or commission-based employee, or in salaried employment with a supplementary source of income, an unsalaried company director, or varying other reasons - a self-certification mortgage could be the best option for you.
- Certify Earnings
A self-certification mortgage is suitable for applicants whose income is not easily verifiable, like the self-employed or those that receive commissions. If you're self-employed, a contractor, have irregular income or multiple jobs, you are probably one of many who know you can afford a mortgage but have difficulty proving your income. They are also quite good for people just starting out in a new career with good steady income and a fair amount of deposit behind them.
It is ideal for self employed people who perhaps have not been in business for the required three years or cannot produce accounts for a three year period but can demonstrate usually through an accountant's reference that they can meet the mortgage payments.
When applying for this type of mortgage you will be required to state your expected annual earnings. The mortgage will be offered on the basis of your likely income rather than you having to provide any documentary evidence.
- Deposit
It caries a higher rate than standard mortgages because statistics show most businesses fail within the first two years of trading. So if you were to be left with heavy debt there is a possibility you could lose your home. However, some mortgages are better than others, and, if cash flow is a problem, it's worth checking out those that offer payment holidays and the facility to pay more when you can.
Fortunately there are a number of competitive self-certification mortgage products available, depending on your circumstances and individual requirements. They are now supported by an ever increasing number of mortgage lenders, including mainstream as well as specialist lenders. Interest rates charged are now far more attractive.
It has become increasingly popular in recent years. However, you should always remember that you will be asked your income on the application. Just because you are in a self certification situation, you should only put down your actual income. To do anything else would not only be fraud, but could also mean that you are unable to afford your mortgage repayments, especially if mortgage rates rise in the future.
Apr 24, 2008
Mortgage: Tips to Pay off Your Mortgage Faster
Mortgage: Tips to Pay off Your Mortgage Faster
by Dr. Doug Willen
Many people today are unhappy with their mortgage. When we purchased our home, we talked ourselves into the idea that paying down our mortgage would get easier as the years went by. We rationalized that, in a few years we would be making more money, and even though our current mortgage payment was a stretch... It would get easier as time went by.
However, this isn't always the case.
Some of us did make more money, but our expenses went up, too.
Some people have a variable rate, and your rate, and monthly payment may now be higher than when you first started to pay on your current mortgage.
Some people may even have a negative amortization loan. Commonly called a Neg Am, which means you pay less than your scheduled interest-only payment, and your principal actually grows each month.
This is the exact type of mortgage that my wife and I selected a few years ago, and it looked so "flexible" at the time. Ours was called an "Option Arm", meaning you could pay one of 4 options of mortgage payments. Option one was less than interest only. Option two is interest only. Option three is a full principal and interest payment based on 30 year payoff. Option 4 is a full principal and interest payment based on a 15 year payoff. At the time, we could only afford option one, which means we would be going down the financial drain, at a rapid rate.
We, like so many others, base our budget, on option one. And now our principal has literally grown, by over $25,000 in the last few years. With the home values down in our area, we will be upside down in our house if we don't do something to correct it. It makes me sick just to think about it.
So...What are the solutions?
Well the easiest solution is to simply pay more money each month towards your principal. This works.
But the problem is... "Where does the extra money come from?"... Do you have it lying around? How much more can you send in each month, and how many months in a row, can you keep that pace? But if you could send it in, you would be out of your mortgage many moons faster!
Another good idea is the Bi-Weekly plan. Bi-weekly, is simply paying your existing payment, in two chunks, twice per month, instead of once. For example, if your mortgage payment was $1000. Sending in $500 twice per month is an effective strategy, for paying off your mortgage faster. It has the potential to knock off, 5-7 years on a brand new 30 year mortgage. I never figured out, why less than 2% of Americans take advantage of this technique.
Another tip is to refinance at a lower interest rate. We may actually be seeing lower interest rates on the horizon. We've seen a drop in the beginning of 2008 already. Be careful, to really do your homework, and shop around. Compare all the hidden costs, too. Some lenders offer a better rate, buy you pay a higher closing cost. So, really crunch the numbers, and make sure it's a good deal, before you sign.
by Dr. Doug Willen
Many people today are unhappy with their mortgage. When we purchased our home, we talked ourselves into the idea that paying down our mortgage would get easier as the years went by. We rationalized that, in a few years we would be making more money, and even though our current mortgage payment was a stretch... It would get easier as time went by.
However, this isn't always the case.
Some of us did make more money, but our expenses went up, too.
Some people have a variable rate, and your rate, and monthly payment may now be higher than when you first started to pay on your current mortgage.
Some people may even have a negative amortization loan. Commonly called a Neg Am, which means you pay less than your scheduled interest-only payment, and your principal actually grows each month.
This is the exact type of mortgage that my wife and I selected a few years ago, and it looked so "flexible" at the time. Ours was called an "Option Arm", meaning you could pay one of 4 options of mortgage payments. Option one was less than interest only. Option two is interest only. Option three is a full principal and interest payment based on 30 year payoff. Option 4 is a full principal and interest payment based on a 15 year payoff. At the time, we could only afford option one, which means we would be going down the financial drain, at a rapid rate.
We, like so many others, base our budget, on option one. And now our principal has literally grown, by over $25,000 in the last few years. With the home values down in our area, we will be upside down in our house if we don't do something to correct it. It makes me sick just to think about it.
So...What are the solutions?
Well the easiest solution is to simply pay more money each month towards your principal. This works.
But the problem is... "Where does the extra money come from?"... Do you have it lying around? How much more can you send in each month, and how many months in a row, can you keep that pace? But if you could send it in, you would be out of your mortgage many moons faster!
Another good idea is the Bi-Weekly plan. Bi-weekly, is simply paying your existing payment, in two chunks, twice per month, instead of once. For example, if your mortgage payment was $1000. Sending in $500 twice per month is an effective strategy, for paying off your mortgage faster. It has the potential to knock off, 5-7 years on a brand new 30 year mortgage. I never figured out, why less than 2% of Americans take advantage of this technique.
Another tip is to refinance at a lower interest rate. We may actually be seeing lower interest rates on the horizon. We've seen a drop in the beginning of 2008 already. Be careful, to really do your homework, and shop around. Compare all the hidden costs, too. Some lenders offer a better rate, buy you pay a higher closing cost. So, really crunch the numbers, and make sure it's a good deal, before you sign.
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