Income Protection vs Critical Illness Cover – which is right for me?

Unlike life insurance, which pays out on death, Income Protection and Critical Illness Cover both offer a financial safety-net while you’re still alive.

They’re designed to reduce the financial hardship you and your family could suffer if you became ill. Continue reading

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3 reasons you should contact your mortgage broker today

Once you’ve got your mortgage, you might assume that your relationship with your mortgage broker comes to an end.

In fact, your mortgage broker can provide ongoing support in the years and decades that follow. By getting in touch with your mortgage broker, you could save yourself thousands of pounds and protect your loved ones from unexpected events. Continue reading

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3 things that could affect your mortgage in 2021

The year 2020 was one that many people would rather forget. The coronavirus pandemic wreaked havoc on our day-to-day lives, affecting our health, happiness, and finances.

One sector that experienced its fair share of ups and downs was the housing market. In spring’s lockdown, the housing market pretty much ground to a halt when social distancing measures put a stop to house viewings. Continue reading

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6 top tips to speed up the home-buying process

Finding your dream house is just the first of many steps in the home-buying process.

In Scotland, it usually takes six to eight weeks between making an offer and being handed the keys to your new pad. In England, around 12 weeks is more common, according to Propertymark analysis. Continue reading

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What is mortgage protection and do I need it?

Have you ever thought about what would happen to your mortgage if you died unexpectedly?

Without your income, there’s a risk your loved ones would struggle to make repayments or, worse, be forced to sell their home.

Continue reading

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The pros and cons of buying a new-build home

If you want to live in a house that’s brand new and spotlessly clean, you might be tempted to buy a new-build home.

Figures compiled by Zoopla suggest the new-build market is starting to bounce back after coronavirus put a halt to construction in the spring. Nearly 30,000 new properties were completed in the third quarter of 2020, up from just over 20,000 in the second quarter. Continue reading

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Should I overpay on my mortgage? Here’s what you need to know

If you’ve got extra cash to spare, you might be considering making overpayments on your mortgage.

Overpaying could reduce your monthly repayments, shorten your mortgage term, and save you money in interest. However, it isn’t necessarily the right decision for everyone.

If you’re asking yourself ‘should I overpay on my mortgage?’ this is what you need to know.

Go online to work out how much you could save

Trying to work out how much a mortgage overpayment could save you in the long run isn’t easy, but there are some free online calculators that can help.

For example, Nationwide’s overpayment calculator shows what you could save in interest and how many months you could reduce your term by. It also has a handy graph showing how your mortgage balance will reduce over time.

The table below shows the impact of making a £20,000 overpayment on a £200,000 mortgage with 15 years remaining and a 2% interest rate:

Details With overpayment Without overpayment
Monthly repayment £1,287.02 £1,287.02
Total to repay £225,111.81 £231,663.04
Length of mortgage 13 years and 4 months 15 years
Interest total £25,111.81 £31,663.04

Source: Nationwide

In this example, you could save £6,551 in interest and reduce your mortgage term by one year and eight months.

Large overpayments could attract charges

If you have a mortgage with a fixed, capped or discounted interest rate period, there will usually be a limit to how much you can overpay each year without attracting charges. Often, this is 10% of your remaining balance, although it varies from one lender to another.

If your overpayment is above this limit, you might have to pay an early repayment charge (ERC). Some ERCs are set at a fixed rate of 5% whereas others reduce as you get nearer to the end of your deal.

So, if you have a mortgage of £200,000, you might be able to overpay by £20,000 without paying an ERC. However, if you overpay by £30,000, then the extra £10,000 could attract an ERC of £500 (5% of £10,000).

Sometimes, lenders won’t apply an ERC if you’ve come to the end of your deal and have been moved on to their Standard Variable Rate. This isn’t always the case, so make sure you check the terms and conditions.

It might be better to pay off other debts first

If you have other, more expensive debts, it might be wise to pay off those before making a mortgage overpayment.

The more expensive the debt, the more it will cost you in interest over time. According to Moneyfacts, the average two-year fixed-rate mortgage was 2.38% in October 2020. In contrast, MoneySuperMarket puts the average interest rate on credit cards at 19%.

So, before you tackle your mortgage, check whether you’re paying a higher rate of interest on credit cards, store cards, overdrafts or pay day loans.

Everyone should have a ‘rainy day’ fund

Before you make a mortgage overpayment, make sure you can actually afford it.

You might have £10,000 sitting in a savings account, however, putting that whole £10,000 towards your mortgage isn’t necessarily the best course of action.

Having some money set aside for unexpected events, such as your car breaking down or boiler packing in, can make you better prepared for financial shocks.

It’s generally considered wise to have three to six months’ worth of expenses set aside in a readily accessible account.

Get in touch

If you’d like more information on the impact of making mortgage overpayments, please email or call 0131 339 2281.

Please note

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.

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Escape to the country: The UK’s top 5 retreats

After almost a whole year working from home, it’s no surprise that more and more people are swapping the cramped confinement of city dwelling for the rolling countryside.

According to Rightmove, the number of city residents contacting estate agents to buy a home in a village rose by 126% in June and July 2020 compared with the same period the year before.

The escape to the country continued in September, with nine areas with populations of under 11,000 seeing buyer searches doubling from 2019.

If you long for green spaces and a better quality of life, here are five of the UK’s top retreats to consider.

1. Orkney, Northern Isles of Scotland

Orkney was crowned Scotland’s best place to live for the eighth year in a row in the Bank of Scotland Quality of Life survey 2020.

With its unspoilt landscapes and coastline, you couldn’t be further away from city life. The stunning scenery is no doubt a major contributor towards Orkney residents’ high level of wellbeing. A survey by the Office for National Statistics found adults in Orkney have the second-highest life satisfaction in the whole of the UK, with a rating of 8.4 out of 10.

People in Orkney also benefit from high employment, low crime rates, smaller class sizes and more affordable housing. Data from Rightmove puts the average house price at just £161,668.

If you’re looking for somewhere peaceful where your children or grandchildren can play safely outside, this could be it.

2. East Hertfordshire, East of England

If you want to be close to the UK capital but without the hustle and bustle, East Hertfordshire might be your cup of tea.

Crowned the best place to live in Britain in the latest Halifax Quality of Life survey, East Hertfordshire is home to more than a hundred villages and hamlets. These include the picturesque village of Much Hadham, which has its own museum featuring Tudor wall paintings and a local history gallery.

East Hertfordshire benefits from high life expectancy, good health and happiness scores, and excellent schools. The downside is house prices are typically more than the UK average. According to the Land Registry, houses in East Hertfordshire cost an average £386,743.

3. Beddgelert, Wales

Fancy a home where you can pop up a mountain or wonder at legends gone by? If so, Beddgelert in Snowdonia National Park could be for you.

With a population of just 455 at the last census, Beddgelert is a beautiful stone-built village. It is one of the stop-off points on the Welsh Highland Railway from Caernarfon to Porthmadog.

Complete with dramatic hiking terrain and the legend of Prince Llewelyn ap Iorwerth’s trusty dog Gelert, it could be a great home for adventurous spirits.

According to Rightmove, the average house price in Beddgelert is £245,528.

4. Waddington, Lancashire

The village of Waddington in Lancashire made The Sunday Times’ list of the top ten places to live in the North West.

The judges said Waddington was “their favourite of the picturesque stone villages and a place that best sums up the unspoilt northern charm of this happiest of valleys”.

Set in the heart of the Ribble Valley, Waddington has fantastic walks, a café, a social club, three pubs and a children’s play park area. The average house price, according to Rightmove, is £359,410.

5. Clovelly, North Devon

Clovelly in North Devon is one of the prettiest villages in the UK. With its white cottages and cobbled streets, living in this coastal village will feel like a permanent holiday.

Set on a 400-foot cliff, there’s even an ancient harbour with a thriving fishing industry. There is no vehicular traffic – just donkeys and sledges. Clovelly offers long walks along the cliff tops where you can take in the beautiful scenery.

The average house price, according to Zoopla, is £259,060.

Get in touch

If you’d like help making your dream home a reality, please get in touch. Email or call 0131 339 2281.

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5 questions to ask yourself if you’re unmarried and buying a house

Like an increasing number of couples in the UK, you and your partner might be considering buying your first home without getting married.

This could be because you want to get a foot onto the property ladder as quickly as possible, you don’t want a wedding eating into your house deposit, or you simply don’t believe in tying the knot.

Whatever the reason, buying a property as an unmarried couple can have lots of legal and financial consequences. Regardless of how long you and your partner live together, you won’t have the same legal rights as a married couple or a couple in a civil partnership.

Without the correct documentation in place, you could find yourself severely out of pocket if your relationship breaks down. If you’re unmarried and buying a house, here are five questions you must ask yourself.

1. How will we own our home?

When you buy a house as a couple, there are two ways in which you can legally own it: as joint tenants or as tenants in common.

If you’re joint tenants, your house will belong to each of you jointly. You won’t own a specific share of your home, and you won’t be able to pass on a share of your home in your will. When you die, your interest in the property will automatically pass to the other owner.

In contrast, tenants in common each own a specific share of the property’s value. You can give away your share, sell it, or pass it to a named beneficiary in your will when you die.

2. How much money are we investing in the property?

The difference between joint tenancy and tenancy in common matters most when you’re deciding how much money you’ll each put into your property.

The law assumes that joint tenants own their house equally, regardless of how much money each person contributes. Unlike married couples, a judge won’t look at what is ‘fair’ when deciding how to distribute assets when you split up.

Instead, they’ll usually order that the house is sold and the proceeds are divided equally. So, if you’re joint tenants, you could end up with 50% of the sale proceeds even if you paid the whole deposit and made most of the mortgage repayments. 

If you’re tenants in common, you can draw up a legally binding document setting out the percentage of the property you own. This document could prove vital in avoiding financial uncertainty if your relationship breaks down.

3. Do we want a cohabitation agreement?

Entering into a cohabitation agreement is one way of ensuring you’re protected if your relationship comes to an end. As unromantic as it sounds, it can help to reduce the chances of additional acrimony at a stressful and upsetting time.

A cohabitation agreement sets out:

  • Who owns what and in what proportion
  • How your property, belongings, savings and other assets will be split if your relationship ends
  • How your children will be supported
  • What will happen to bank accounts, debts and other joint purchases.

You can also set out how you’ll manage your daily finances, including how much money each person will contribute to the mortgage and other bills.

Bear in mind that a cohabitation agreement is only legally binding if both parties have received independent legal advice.

4. Should we get a joint bank account?

A joint bank account can make it simpler to share money and pay household bills, including your mortgage. However, there are some potential drawbacks.

First, if your partner has a poor credit score, it could affect your own credit score and reduce your chances of being approved for financing in the future.

Second, if you have a bad break-up, there’s a risk your partner could take all the money out of the account, with little chance of you recovering it. If the account becomes overdrawn, each account holder is responsible for paying back the cash, meaning you could end up paying your ex’s debts.

5. Have I made a will?

Making a will is extremely important because it helps to ensure you’re financially protected if the other person dies.

As mentioned before, owning a home as tenants in common can make the division of assets fairer if you split up. However, it also means your share of the property won’t automatically go to your partner if you die.

By making a will, you can ensure your partner inherits your share. If you prefer, you could structure your will so that part of your share goes to your partner and the rest to any children you have from a previous relationship.

Bear in mind that if unmarried partners have children together, your children could inherit everything if one of you dies. In a worst-case scenario, this could result in you having to make a legal claim against your children for financial provision.

Get in touch

If you’re an unmarried couple and would like advice on buying a home and protecting your finances, please get in touch. Email or call 0131 339 2281.

Please note

The Financial Conduct Authority does not regulate estate planning, tax planning or will writing.

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Your complete guide to mortgages

At some point in our lives, most of us will need to take out a mortgage if we aspire to own a home. Yet, mortgages and the process of securing one can still be filled with jargon and other complexities. Our guide aims to provide you with all the information you need when searching for a mortgage, whether as a first-time buyer or you’re hoping to move up the ladder.

Continue reading

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