Author: Emma Mayo

The costs of smoking are well documented. High blood pressure, heart attacks, lung cancer – smokers know why it’s such a bad habit. The facts are humbling. 80% of non-smokers can expect to live to over 70, only 50% of smokers can. Also, 50% of smokers will die from a smoking-related disease. These diseases are often long, drawn out and very painful.

At over £5 for a packet of 20 cigarettes, they are also aware of how much it’s costing them monetarily. But the financial implications stretch further, meaning that smokers have to pay hundreds more for their life insurance.

Insurance companies classify anyone has who used any tobacco products in the twelve months before making the insurance application as ‘a smoker’. Statistics show that people that smoke are more likely to make a claim, so naturally the premiums are higher for smokers – but the margin is surprisingly high. A male 35-year-old smoker will pay 78% more in life insurance premiums than his non-smoking counterpart. It’s not much better for women – a smoker of 35 will pay 72% more. For £100,000 worth of cover over 20 years, that’s a difference of over £1,500. Add that to the cost of all those cigarettes at a rate of 20 a day, and that’s another £36,400 smoked up the chimney! Smoking certainly is an expensive habit…

Despite the extra cost implications, don’t be tempted to save money on life insurance by pretending that you don’t smoke. If you do need to make a claim then the insurer will most likely discover that you were in fact a smoker, and would use that as grounds to reject the claim. It simply isn’t worth the risk.

Some insurers have developed methods to make sure applicants cannot lie in any case. There is a saliva test that can reveal whether you are a smoker or not – and some insurers ask potential customers to take the test before they will insure them.

For people that do manage to give up the demon weed – they’ll have to wait for twelve months before telling the insurer and hopefully benefit from lower premiums. However, they’ll almost certainly get a better deal by shopping around on the Internet. Without the added expense of smoking affecting the quotation, the best bargains will be there for the taking.

Here are the two main reasons why people should give up:

Health – smoking is a sure fire way to shorten life span, and make things like running and exercise a lot more difficult.

Money – this article has already spelled out just how much smoking costs, that money could be far better spent on holidays and other luxuries.

If they’re not enough, there’s plenty more – like keeping a seat in the pub for example! Many pubs have already banned smoking. By 2007 smokers will be well and truly out in the cold.

If this article has inspired you to take a serious step towards giving up smoking, also have a look at www.quit.org.uk, representing the charity dedicated to helping people to quit the habit. The website www.givingupsmoking.co.uk is also a helpful port of call, and you can ring the NHS smoking helpline on 0800 169 0 169.

Life Insurance FAQ’s
More Life Insurance Articles
Request a Life Insurance Quote

Technocrati Tags[life-insurance]

Author: Dot Piper

From June 2007, homeowners wishing to put their house on the market will be obliged to provide a “sellers’ pack”. In theory this pack will give full information on every aspect of the house and the reasoning behind this new requirement was that it was intended to speed and improve the selling process.

Things may not be so simple, however, and now that more comprehensive details of the scheme have been released, they seem to indicate that there are some points which are not covered.

The packs must contain:

A description of the property being sold, in the form of a Sale Statement.

Copies of the property deeds, or evidence of title from the Land Registry.

Standard searches regarding planning permissions and services such as water and drainage and any road schemes.

Guarantees and warranties for any building work carried out on the property.

Energy efficiency ratings.

In order to give more information on fixtures and fittings included in the sale, forms will be provided which the seller has to complete.

All the above seem to be fair and reasonable. The new energy efficient ratings don’t create any problems. They are simply an explanation of what standard the current insulation values etc., are and they give a buyer the chance to evaluate what can be done to improve the situation, if necessary.

It’s what the packs don’t contain which may create problems

There’s no requirement for reports on ground stability, natural subsidence or effects of mining in the area. They don’t take account of the possibility of contamination from any substances, including radon gas, or the risk of flooding. There’s no information on rights of access or details of telecommunications links.

The cost of the sellers’ pack is claimed by the government to be around £776 for the average semi-detached house, but it is thought by the experts that £1000 is the more likely figure. There is talk of a fine of £200 per day if an owner offers a property for sale without a HIP. This applies even if you market the property on a private web site.

There’s a sell-by date too. It is believed that mortgage lenders will not advance buyers the money to complete the purchase if the report is more than three months old. The up-dated regulations suggest that if you remove your house from the market for over 28 days and then decide to put it on sale again, you will need to pay for a whole new pack.

A spokesman for the Communities and Local Government Department made the statement that the 28 day rules would not affect people taking their homes off the market whilst a sale was being negotiated. If this sale subsequently fell through and the pack was more than three months old then the whole thing would have to start again with a fresh HIP and another £1000 or so.

This, then, is the up to date position on HIP’s. The question seems to be -Is it the answer to all the property markets’ problems or just another stealth tax?

More Mortgage FAQ’s
More Mortgage Articles

Technocrati Tags[mortgages]

Author: Dot Piper

We’ve all heard the expression “Born free- taxed to death”, but are you taking full advantage of the opportunities to reduce your tax burden?

One of the first courses of action is to check that you have the correct tax code. If you have an incorrect code you could be over-paying both your income tax and national insurance. The enquiry number for your local office can be found on www.hmrc.gov.uk.

Do you understand your tax code? There is a clear explanation of this, which can be found by logging on to www.direct.gov.uk and finding the heading “Understanding your tax code.”

If you become unemployed and claim unemployment benefits, the tax aspect will be adjusted automatically, but should you not claim these benefits then you may well be able to reclaim some tax. Make sure you keep your P45, which will have been given to you by your last employer and contact your local tax office and ask them for a P50, which is a repayment form.

If you’re under the age of 65, you’ll be able to earn up to £5,035 per year free of tax. Your spouse is entitled to this too, so if their earnings are below that figure, you could transfer any investments to them to make use of the allowance.

The next piece of advice may not concern everyone, but tax credits are there for the taking. It is estimated that £2.9bn is available from Her Majesty’s Revenue and Customs and the Department of Work and Pensions. You may be entitled to pension credit, working family tax credit or child tax credit. There’s a website for this too, www.taxcredits.inlandrevenue.gov.uk or you can call 0845 300 3900 to check eligibility.

With the increasing property values in recent years, more and more people are facing the possibility of inheritance tax being charged on their estate. If the value of your estate exceeds £278,000, then your heirs will be paying 40% tax on the excess. You could think about gifting some money to keep the estate value down. You can give up to £3,000 per year, free of tax.

An ISA is an individual savings account, where the interest is tax free. There is a limit of £7000 per year which you can save totally in stocks and shares if you wish. You are allowed a cash ISA of £3000 per year, in which case you may also hold up to £4,000 in stocks and shares. (£7,000 in total is the limit, of which £3000 can be in cash.)

You can register with your bank or building society to be paid gross interest on your savings if you’re a non-taxpayer. If you have already paid tax on savings and you’re in this non-taxpaying bracket, you can claim the tax back. The Taxback Helpline number is 0845 077 6543.

In the pensions sector, a basic rate taxpayer paying £78 into a pensions scheme will have this topped up to £100 and those taxed at a higher rate will only need to pay in £60, which will be topped up to £100.

Everyone has a capital gains allowance. Currently this is £8,800 per person per year. This can be transferred between spouses to gain the best tax benefit.

There is a tax benefit if you’re renting out a room in your home. You’re allowed to receive up to just over £80 per week (£4,250 per annum) for this, free of tax. For full details of this, go to www.hmrc.gov.uk

Make sure any gifts to charity are effective. Deeds of Covenant, Gift Aid or Payroll giving are a tax efficient way to make your gift really count.

We hope we’ve given you some food for thought. There really is some help out there, now you know where to look for it.

Author: Emma Mayo

Spring, summer and bank holiday weekends are the times that people decide to spruce up their homes. Whether it’s a lick of paint on the ceiling, or a full-blown overhaul of the house, there’s a lot of things that can go wrong. You could spill paint all over the carpet for example. Or what if you accidentally put a hole through the ceiling?

DIY disasters are not necessarily covered by a standard home and contents insurance policy. To get the right cover, you need ‘accidental damage insurance’ which may not be included automatically in the policy. If it isn’t, it will be an optional extra which you will need to pay for. Standard insurance policies cover a range of common incidents including fire. Water damage, subsidence and theft – DIY mistakes or general accidents in the home are not considered to be ‘standard’. However, some policies will automatically include damage to electrical items like the TV, DVD player and music equipment.

Some items in the house are automatically insured against accidental damage, like baths and sinks for example, however if the damage arose because of a DIY incident then you will probably need the extra accidental damage cover to make a claim.

If you do a lot of DIY, or a member of your household is particularly clumsy, then it’s always worth taking out accidental damage cover. It usually adds between £20 and £60 to the annual premium, a small price to pay compared to the cost of some DIY accidents. According to the insurer More Than, the accident that causes the most insurance claims is spilling paint on a carpet, a claim which typically costs around £1250. Knocking a nail through a pipe is also a common DIY accident, and the damage caused can add up to costs of around £2000 – not something you’d be too keen on paying for yourself!

If you’re a serious DIYer who takes on large and complicated jobs such as replacing the roof or building a new extension yourself, then accidental damage cover may not be enough. You’ll need to check with your insurer and possibly have to pay extra, as any damage caused could be extremely expensive to fix.

Home and contents insurance is one of the cheaper types of insurance, and although the accidental damage cover may make it more expensive that you would like, it’s still well worth getting, especially if you intend to do any DIY. All it takes is for one nail to go through a pipe and your insurance will instantly have paid for itself! There are excellent savings to be made by buying this type of insurance online. Norwich Union Direct offer a good deal which gives you 50% off your contents insurance if you buy buildings insurance with them. Many other insurers offer online discounts of 10-20%, and some also offer you a discount if you already insure your car with them. It will take less than 30 minutes to get a few quotes using the online forms.

So next time you do some DIY, check first that you are properly insured, as you could be just about to make an extremely costly mistake.

Technocrati Tags[home insurance]

Author: Emma Mayo

Have you taken the car across to France recently – perhaps you took the short journey from Dover to Calais to pick up some wine for Christmas? Did you think to check to see if you were insured before you left? One third of UK motorists do, the other two thirds don’t. And with an estimated 8 million UK holidaymakers, a figure that is growing rapidly, taking their car over the channel every year, that’s a staggering statistic.

It’s not that you won’t be insured at all if you go to Europe, but you can’t automatically expect the same level of cover that you receive in the UK. Your insurer is legally obliged to insure you either at the minimum requirement in the particular EU country, or at third party level – whichever offers the most cover. If you are fully comprehensive in the UK, you may well be third party only in the country you’re visiting. This means you’re not covered for fire or theft, and if your car is damaged in an accident and you’re the one at fault, you will have to pay for the repairs.

As Ian Crowder from AA Insurance has said: “Roughly a quarter of a million comprehensive policies do not automatically or freely extend comprehensive cover to foreign climes.” So in many cases you can have your cover extended to Europe for free, but you have to ring up and ask for it – it doesn’t happen automatically.

A number of insurers will extend your cover to the EU, but there will be an extra charge. This is something that you could choose as an optional extra when you first buy the policy, especially if you intend to drive abroad quite regularly.

If you’re insured with the AA, Axa, Budget, Churchill or Marks & Spencer then you’re in luck - they range from 60 days to 90 days included for no extra charge. Direct Line and Esure offer just 3 days included, and then charge thereafter. Tesco and More Than need a phone call to set up the extended cover, and charges vary.

You also need to think about where you will be travelling in Europe. Only EU countries are generally covered however Switzerland, Croatia, Gibraltar, Norway, Monaco, Iceland, San Marino and Liechtenstein are all allowed in on the deal. Countries further east like Turkey, Romania and Bulgaria may not be covered, so it’s essential to make a phone call before driving through.

You also need to consider getting breakdown cover, because you could find yourself in a sticky situation if you break down in a remote area, especially if you don’t know the language. Some car insurers like Direct Line can add it on to the insurance – they charge £50 for a 2-week holiday for a family of four in France. The AA’s charges start at £10.90 for a day, and with RAC prices start at £13.50 for two days on the other side of the channel.

Finally, a few words of advice on other precautions you need to take when driving abroad:

§ Have the paper and the card part of your driving licence, your insurance certificate, the vehicle registration document and your passport with you at all times when driving.
§ If your car doesn’t have a number plate with ‘GB’ on it, buy a GB sticker for the back of your car.
§ Check out the rules of the country on headlights. You will need to adjust your headlights so they don’t dazzle road users. Also, you have to drive with dipped headlights at all times in Scandinavia, Italy and Spain.
§ Some European countries demand you to carry some or all of the following: a spare set of light bulbs, high visibility jackets, a reflective warning triangle, a first aid kit.

So now you are prepared for driving on the continent, have a great holiday!

More Car Insurance FAQ’s
More Car Insurance Articles

Niche Car Insurance

Woman Drivers
High Performance Drivers
Classic Car Drivers
Young Drivers
Mature Drivers
Max no claims bonus Drivers

Technocrati Tags[car insurance]

Author: Dot Piper

How does 100% off the cost of next year’s health insurance premium sound?
This is on offer through the Prudential Insurance Company’s Pruehealth. They offer their Comprehensive Plan and here are the details, based on a 40 year old non smoker in good health: The monthly payment for a male would be £62.85 and for a female £66.43, there is an excess of £100. The premium is reduced if you gain “vitality” points and this is how it works:

At the end of the first year there is a discount of 25% and you earn further points and therefore further discounts, by improving your health. Measures such as reducing your blood pressure, taking fitness assessments and regularly visiting the gym are encouraged. Cheap gym membership is on offer. There is a website offering encouragement and handy tips about diet and exercise.

When checked with other medical insurance policies, the Pruehealth policy mentioned above came out more expensive than those of General Medical, Health-on-line and Axa PPP. General Medical, for example, offers their Foundation Plus First Choice policy. The premium again based on a 40 year old non-smoker, male or female, is £48.05. The excess is £100.

As the cost of insurance rises with age, inevitably the insurers are going to have to recoup their costs. Some work their premiums out based on age bands and the cost of insurance can jump sharply as you move up from 40 to 49, 50 to 59 and so on. Rather than sudden increases in the premium, many companies increase by a smaller amount, but apply this yearly.

At a time when private medical insurance seems to be roaring away and the very people that need it most are starting to cancel their policies, it’s clear that something needs to be done. Medical inflation accounts for an 8% rise in premiums per year, as new drugs and diagnostic equipment cost soar.

Consumers can feel reassured by some of the latest changes on offer in a bid to address the problem. One idea is suggested by Penny O’Nions, of the specialist broker Onions Group. They have a plan which covers inpatient care only. Any private outpatient care would have to come out of your own pocket and whilst most serious illnesses such as cancer would involve hospitalisation, increasingly these are treated in outpatient facilities and therefore wouldn’t be covered.

An excess on your policy (the part you pay yourself in the event of a claim) can gain large savings in your premium. By paying an excess of £100 you could save around 10% and if you’re prepared for an even bigger excess, say £2000, you could halve the amount you pay. This effectively puts a ceiling on the costs of illness.

No claims discounts usually apply to these types of policies and you should be able to transfer these if you decide to “jump ship”.

As you can see, there’s a vast range of options. Many people stick to the same old policies, feeling it’s just not worth the effort of transferring but in fact it couldn’t be easier. Just go to your favourite search engine, search for insurance brokers and find one which offers health insurance. They’ll take your circumstances into account and find the best deal for you. There’ll be the additional bonus of an on-line discount.

Medical Insurance FAQ’s
Medical Insurance Articles

Technocrati Tags[medical insurance]
Technocrati Tags[health insurance]

Author: Dot Piper

Beware, we have modern-day “Dick Turpins’” at work on our roads. Not quite “Stand and deliver” at gun point, but there’s a striking similarity.

Innocent drivers are being targeted in this frightening new crime which appears to spreading across the country. Effectively, we have an ambush situation.

This is what can happen:

· You may be following a vehicle, generally an ageing car or van, onto a roundabout or slip road. This vehicle, which often has no brake lights, brakes hard and you cannot avoid slamming into it.
· There may be two cars involved. One is in front of you and another one may veer into its path, the car in front of you brakes hard and you crash into it.

These “set up” crashes commonly occur at really busy roundabouts or motorway slip roads. The instigators of these incidents are skilled at pinning the blame on the innocent motorist. These modern day highwaymen work in teams, owning and managing repair garages and car hire companies. These firms present falsely inflated invoices for work carried out, hire of a car whilst the car is off the road and so on. They then make a bogus claim on the blameless motorist’s insurers, often inflating it for maximum pay-out and claiming for compensation for so-called injuries to the driver and passengers. Often the vehicle which they use is an old banger, which will probably contain the maximum number of passengers, all claiming to have been injured in some way and seeking compensation for this and probably loss of earning too. In this way a minor accident claim can escalate into a claim of £20,000 or more.

Insurers are quite rightly extremely concerned about the scale of these so called “accidents” and believe there could be as many as 10,000 of them occurring per year. A single insurance company may not easily pick up on the organised fraud but working with other insurers will give benefits. With this in mind the Association of British Insurers have created an Insurance Fraud Bureau. They will monitor details of suspect claims and scrutinize millions of them to find patterns or links. It is intended that the bureau will liaise with police and hopefully will take civil prosecutions against these fraudsters to recover money which has already been paid out.

There was a case of insurers linking 400 “staged accidents” to one particular gang, involving other crimes in addition to the insurance fraud, where the police would only get involved if the investigation was funded by the insurers. Insurance fraud may be low on the priorities list as far as the police are concerned but in view of the danger to drivers as a result of these unpleasant incidents their reluctance to get involved will have to change.

A Home Office fraud review is due out in the summer of 2006 and hopefully the Association of British Insurers concerns will be addressed in this.

In the meantime, some advice from Norwich Union’s head of fraud, Chris Hill, who says “Keep your distance from the car in front at roundabouts and slip roads and cut your speed. Keep an eye on the vehicle in front. The occupants may turn to look at you or may even make a gesture just before the trap is sprung.”

If a crash does happen, remember to get as much information as you can. Note how many occupants were in the other car, their sex and as much detail as you can about how they were dressed. Make a note of these details and make sure your insurer is aware of them.

These gangs are putting innocent drivers and their passengers at risk. It is vitally important that insurers and drivers work together in a concerted effort to stop this crime.

More Car Insurance FAQ’s
More Car Insurance Articles

Niche Car Insurance

Woman Drivers
High Performance Drivers
Classic Car Drivers
Young Drivers
Mature Drivers
Max no claims bonus Drivers

Technocrati Tags[car insurance]

Author: Adrian Taylor

Forget life’s luxuries, with the cost of even the bare essentials spiralling ever upwards, credit cards and loans are now the preferred option to cover day-to-day expenses. But with ever increasing interest rates, credit unions offer a real alternative – especially if your credit rating is too low to obtain credit via the ‘normal’ means.

Credit unions are controlled by their members and by operating as financial co-operatives, provide low-cost loans and attractive flexible financial products to their members by combining savings.

To become a member of a credit union, you have to fulfil the criteria of what is known as a ‘common bond’. Simply put, a ‘common bond’ is having something in common with the existing members of the union and that could be living in the same area as existing members, belonging to the same organisation/association or being a work colleague of an existing member.

As such, even if you have poor credit rating or are not a regular saver, a credit union may accept you as a member whereas a larger financial institution may not.

Both regular and irregular savers are welcomed by credit unions and the aim is that all savers – whether regular savers or not, are paid the same percentage on their savings as a yearly dividend. Typical this is 2 to 3% but as the rate paid is dependent on profits, this can be as much as 8%.

There are no restrictions on the amount you save and as such, you can pay as little or as much as you like. The frequency at which you make payments is also flexible and whether you pay in weekly or monthly or whenever you can, payments can be made at your convenience – whether at local shops or handy collection points. Payments can also be taken directly from your wages.

As long as you can prove you are able to save you can borrow money based on the amount you are able to repay comfortably and all services can be tailored to your circumstances and requirements.

In keeping with all mutual societies, although each credit union must ensure that enough money is available to ensure financial stability, the credit union itself is a non-profit organisation. Any profits made are used to reduce the rates of interest at which money can be borrowed and to increase the rates of interest paid on savings.

For loan repayments, the typical interest rate is only 6% with interest rates capped to 1% per month. So this means that a loan of £1000 can incur no more than £10 of interest per month. Members can also benefit from free life insurance.

Credit unions are governed by various legislation, most notably the Credit Unions Act 1979. This specifies that their accounts must by audited on an annual basis by a qualified auditor, that adequate insurance is in place against theft and fraud and sets out the objectives of the credit union.

Also to safeguard the future of the credit union and the member’s savings, all savings cannot be lent out and the remaining money must not be invested in high-risk ventures. Any residual money must be invested in government or similar reliable investments or must be put into bank deposit accounts. This also ensures that the money can be returned as and when needed.

Key points to bear in mind when considering joining a credit union

· You must meet the common bond requirements – either yourself or be closely related to an existing member that meets the requirements. You cannot therefore join whichever credit union you feel is most suitable for you.

· Although rules vary from credit union to credit union, you generally have to save money before obtaining a loan so a credit union is not a simple cheaper alternative to a bank loan etc.

· Regardless of whether you need money for your business, all saving or borrowing with a credit union must be done by an individual member and not in the name of the business.

· Cancelled checks are not retuned to you by some credit unions.

· As a rule, credit unions have few branches and very rarely any ATMs.

· The services offered by your credit union may be limited when compared to your local bank so ensure you know what is on offer. It may be more advantageous to maintain accounts at both your credit union and your bank.

To prevent the credit union movement within the UK from growing in size or competing with the products offered by the various banks or profit making organizations, restrictions are imposed by law to ensure that the movement remains relatively small scale.

To obtain a list of credit unions in your area, contact your local council or citizen’s advice bureau who should be able to provide the necessary information. Alternatively if you or your partner are employed, there may be credit unions that cover your industry. If so, your trade union representative or payroll department should be your first port of call.

More Loans FAQ’s
More Loans Articles

More Mortgage FAQ’s
More Mortgage Articles

More Credit Card FAQ’s
More Credit Card Articles

Technocrati Tags[mortgages] Technocrati Tags[loans] Technocrati Tags[credit cards]

Author: Tom Warden

Have you injured yourself at work or on the roads? Had an accident that wasn’t your fault? Then why not claim the compensation you deserve? Well, there may be plenty of reasons to keep away from claims companies, beside the fact that they are likely to hit you with hidden costs and represent you poorly. Their get rich quick options have led to a lawsuit society, much like in the USA when, as soon as somebody has an accident, whether it be their fault or not, their first though is likely to be ‘can I claim?’

You might think that, as long as you steer clear of accidents with people, you don’t have to worry about what these companies are doing, but their effects stretch wider than just the careless and unfortunate, they will have an effect on even the most careful drivers. The cost of accidental damage has risen by 5% per year in the last few years, and claims for personal injury have also increased, with the cost of them being settled rising by a massive 12%. These factors mean that insurance companies, or at least most high street ones, are raising the price of their premiums, some by up to 10% per year. Most customers accept these rises, despite the fact that they have come though no fault of their own. Neither do they question why most new, money saving offers are only offered to new customers and are not even made available to existing ones.

So is there any way of avoiding the price rises? Thankfully, yes. Online insurance companies tend to offer deals which are a lot more flexible and some offer multi car and pay as you go policies.

The advent of the internet as a selling tool has meant that many more new insurance companies are cropping up as well as the more established ones. This has brought about a healthy competition in the market which was much needed, and competition has kept rises to a minimum.

So if you find yourself as an indirect victim of the ‘where there’s a blame, there’s a claim’ society, don’t lie down and take it on the chin - turn on you computer and buy online!

More Car Insurance FAQ’s
More Car Insurance Articles

Niche Car Insurance

Woman Drivers
High Performance Drivers
Classic Car Drivers
Young Drivers
Mature Drivers
Max no claims bonus Drivers

Technocrati Tags[car insurance]

Author: Richard Norfolk

Read the title again and then keep it firmly in mind. Do not rush into owning a store card. Consider your decision very carefully, and always bear in mind that the use of any credit card is quite likely to have cost implications for you.

First of all we should be clear about what we mean by ‘store cards’. There are two main types – the usually innocuous type most often called Loyalty cards, and the far more ‘dangerous’ credit style card. The loyalty card is not being considered here because it does not normally act as a means of separating a customer from their hard earned cash.

This is the card where typically you get points based on the amount you have spent and can let these points build up. Then, when you have sufficient you can then use them for an in store purchase or discount. This is a harmless little perk which rewards you for repeatedly shopping in the store.

The credit style of card is a very different kettle of fish. Often they are afforded some camouflage by having loyalty card type benefits included in their system of operation. Thus the store may make a big point out of the fact that using their card will get you a discount on your purchases ‘today’, ‘this week’ or even ‘this month’. They are unlikely however to have anything approaching the same level of publicity regarding the potential costs to you should you fail to meet their payment dates.

The cost of late payment can be horrendous – the Annual Percentage Rate (or APR) can be as high as almost 30% on some store cards, which does not compare well with the usual credit card rate of 15% to 20%.

However, credit cards are now most definitely a way of life and it cannot be denied that they are very convenient. They can enable purchases which would otherwise have involved drawing the requisite amount of cash from the bank – although some husbands may say that this can be a bit too convenient at Sales times! The disappearance of so many bank branches will have given an added attraction to the credit card.

How does this affect store cards? Where once debt was regarded as shameful and to be concealed, the increased use of credit cards has got people used to the idea. Many people run into the red on their card and have to pay interest on top of their repayments.
This procedure then ‘rolls over’ into their use of store cards, and they find to their dismay that their payments are now being hit by the high interest rates. If they then find it impossible to pay the outstanding balance in full at the month end, the interest charges can accumulate and extremely serious problems can result.

Don’t forget that the inability to pay can hit you like a bolt from the blue. You may be jogging along happily, buying the items that you feel that you need and paying off your store card at the due time – then WHAM – redundancy, illness, family problems, loss of earnings. Through no fault of your own you cannot pay the amount due.

It all sounds like terrible ‘doom and gloom’, but treat it as a warning not to go in for any financial commitment until you have thoroughly studied your options.

Don’t be swayed by short-term benefits which lead you into long term problems. Are they really benefits, or is the store price higher than the price charged by their competitors? Ignore ‘pie in the sky’ rewards which you may never qualify for.

Unless you have reserve ‘rainy day’ money which can be accessed instantly to cover payments due, you may well have to face interest charges if you fall behind with payments because your income drops – just the time when extra costs are the last thing you need.

However, be prepared to sign up to a store card which offers a good discount on an item which you were going to buy anyway, but control the situation. If necessary you must take your discount and ensure that you make all your payments when due. Then cut your store card up, to avoid being dragged into the deep water of debt.

If you want to have credit then look closely at conventional credit cards and especially at the interest charges they make.

Consider, consider, consider. It’s your money – use it wisely.

Credit Card FAQ’s
Credit Card Articles
Cheap Credit Cards

More Relevant Articles
Choosing a credit card

Technocrati Tags[credit cards]
Technocrati Tags[store cards]

Author: Emma Mayo

The mortgage lenders have been playing a dirty, but totally legal, game on exit fees. In reaction to the amount of people that now choose to switch mortgages to make the most of competitive interest rates, they have been responding by raising exit fees by as much as 450% in the last 3-5 years – what’s worse is, they haven’t bothered to tell the borrowers.

An exit fee is a charge that the mortgage lender enforces if a borrower leaves their mortgage before the end of the term. It’s also known as a redemption penalty. Now the Financial Services Authority (FSA) has seen what they’re up to, it’s making a move to end these practices.

When people sign up for a mortgage in the first place, the lender has to stipulate exactly how much it will cost to leave the mortgage early. That’s a legal requirement. However a loophole leaves the way open for lenders to increase that charge without informing the borrower, so they can decide to remortgage after five years and find they have to pay a lot more than they thought.

The Cheltenham & Gloucester are one of the culprits – their exit fee has risen from £50 to £225 over the last few years, and the Woolwich have done something similar, increasing the fee from £95 to £275. It’s the lenders’ way of cashing in on the activities of the ‘rate tarts’ i.e. people that switch mortgages regularly to make savings on their mortgages. They don’t charge enough to stop the rate tarts, but they do at least get a small portion of the proceeds.

The FSA is currently talking to the lenders to reach an agreement on this issue, which will hopefully be enforced and become practice by June 2006. The ideal outcome will be for exit fees quoted at the beginning to be fixed for the mortgage term, so whether you stay in the same mortgage for two or ten years, the exit fee will be the same as you were quoted.

This is a good opportunity to remind you that when you get a mortgage, you need to look at all the costs, charges and sometimes incentives relating to the deal, not just the interest rate. We have compared two similar looking deals from Northern Rock and Halifax to show you that the interest rate does not tell the whole story.

We have compared the two companies based on a 2-year fixed rate repayment mortgage for 25 years, exiting the mortgage at the end of the 2 year fixed period.

Northern Rock charges interest at 4.19%, has a 1.5% arrangement fee, £250 exit fee and no incentives.

Halifax charges interest at 4.39%, has a £499 arrangement fee, £175 exit fee and the incentive of free valuation and solicitors fees.

Ignoring the incentives available on the Halifax mortgage, it still works out a lot cheaper over the two years. Northern Rock costs a total of £14,671 and Halifax costs £13,864, so you will pay £807 less over two years with Halifax. This case shows that the interest rate is not the only thing you need to consider, you must calculate all the costs to get a true comparison.

You also need to consider how the interest works because that will also affect how much you pay. Mortgages that charge their interest on an annual basis cost more because you are paying interest, for 11 months of the year, on a balance that has already been reduced by your monthly payments over the year. If your interest is calculated daily then you are always seeing the benefit of these payments, and will pay a lot less.

When choosing a mortgage, it is essential that you look at the bigger picture, and a specialist mortgage broker can be invaluable to help you sort through the many variables you will come across. Read the small print and all the information they provide, charges are hidden within complicated terms and are usually associated with the following words: completion, reservation, application, booking, arrangement and early redemption – so make sure you take a proper look at the charges especially when you see these terms mentioned.

More Mortgage FAQ’s
More Mortgage Articles

Technocrati Tags[mortgages]

By Melinda Varley

The costs associated with buying a first home have risen by 94% in the past six years, with increases in house prices and charges hitting mostly first-time buyers hard.

While first-time buyers in 2000 needed an average of £4,698 to cover stamp duty, solicitors’ bills and mortgage fees, in 2006 the average became £9,113 making it even harder to raise a deposit on your first home.

A deposit is the amount of money that you will be required to put forward to the purchase of a property, with the balance made up from mortgage finance.

The size of your deposit may affect the interest rate you pay for some mortgage packages – such as, the more you put down as a deposit, the lower the rate of interest.

A typical deposit would be 5-10% of the total price of the property. Therefore, if you were required to provide a 10% deposit and the purchase price was £100,000 you would need to put down a £10,000 deposit.

Consider that most lenders will also look at your disposable income when lending you money and will take into account your existing loans. It is also possible that with house prices being so high, you may need some help with getting together a deposit.

You may find a few lenders who will look at ‘lending you a deposit’ as part of the overall mortgage package. However, a major disadvantage of this could be if the value of your property falls, you may find yourself in negative equity. This means that you could end up owing more than you borrowed.

If this is your situation, it is important that you take the correct advice. It is imperative that you do not over commit yourself to a mortgage. If you do, your home could be at risk if you cannot keep up repayments and you could end up in court fighting to keep it.

You could instead decide to take out a personal loan to use as a deposit. A personal loan is one of the least complicated financial products available but like anything, you will need to be sure of the terms before signing an agreement.

There are two types of personal loans offered by lenders such as banks and building societies: secured loans and unsecured loans.

A secured loan is one where the property will be used as security on the loan. If you aren’t able to pay off the loan according to the terms agreed with the lender, then your property may be at risk of repossession. As a first-time buyer this would probably not be a relevant loan for you unless a member of your family were to take out a secured loan to help you.

An unsecured loan can vary in both size and the terms of the monthly repayments, depending on the purpose of the loan. It is a debt that is not secured against an asset or equity.

With any loan, it is important that you use the Annual Percentage Rate (APR) to compare the true cost of borrowing, as this will factor in fees that might not be included in the ‘headline’ rate.

A company may quote ‘typical rates’, which means that the terms apply to any applicant, but the exact rate offered to you will depend on your personal circumstances.

If you have a poor credit history you may find it difficult to obtain a loan and if you are offered one, the interest rates may be higher than usual.

There may be many routes available for you even if you find yourself without a deposit and more and more lenders are launching mortgages specifically designed to help out first-time buyers. The possibilities are:

· Graduate mortgages
· Professional mortgages
· Guarantor mortgages
· Joint mortgages with your parents
· High loan-to-value mortgages
· Mortgages for friends buying together
· 100% loan-to value (LTV) mortgages
· Mortgages over 100% loan to value (LTV)
· Offset mortgages with your parents
· Shared ownership and equity mortgages

If you are seriously considering buying your first home it is important to research all your options and to really shop around for the best deal tailored to you and your circumstances.

More Mortgage FAQ’s
More Mortgage Articles

Technocrati Tags[mortgages]

Author: Dot Piper

In some ways it’s best not to be a millionaire. Honestly. When it comes to getting a mortgage, for instance.

There has been an immense increase in the property market for homes valued at £1m plus, according to Land Registry figures. This demand is in some part explained by the excellent growth in the stock market, combined with an outstanding City bonus season.

This has not caused the avalanche of lenders which you might expect. Many of them are exercising a degree of caution when it comes to the more affluent mortgage seeker. Surprisingly, the really good deals go to the smaller borrower. There is the launch of a headline making, spectacular, never to be beaten, amazingly low mortgage, which sounds too good to be true. In reality the amount of money which lenders have available at this rate will be very limited and certainly not available for large loans. Also, bigger is not always better, and many lenders would prefer to lend 10 borrowers £200,000 rather than one loan of £2m, in order to spread the risk.

It is, however, beginning to get easier to find lenders willing to fund the loans on houses valued at £1m or more, as the number of properties in these price brackets rocket. Recent figures from the Land Registry show a massive increase in the number of houses sold for more than £1m.

When it comes to getting a mortgage, five of the top deals we found on offer are:

1. Lloyds TSB, available through Savills Private Finance, offer a two year tracker at a rate of 3.99%. There is a fee of £199, which rises to £999 on a loan greater than £1.5m. There is no maximum loan size and they will lend 95% of the value of the property.

2. The Halifax, also a 2-year tracker, offers a rate of 4.24%. The fee is £1,499, but this includes valuation and legal work on re-mortgages up to 75%. Maximum loan size is £2m. They will lend 90% of the property value. This available through selected brokers.

3. Bank of Scotland offer a 2-year tracker, with a rate of 4.29%. The fee is 0.1%. They will lend 90% of the value of the property. The minimum loan is £500.000 and the maximum is £2m. This is on offer through brokers.

4. Bank of Scotland. 2-year tracker, with a rate of 4.39%, the fee is £599, and they will lend up to 75% of the value of the property. The minimum loan is £500,000 and the maximum is £5m. This offer is direct from the Bank of Scotland.

5. Cheltenham and Gloucester offer a two year fixed rate if 4.45%, with a minimum deposit of 10%. The fee is £699 and the maximum loan is £1.5m.

It is probable that some of the people requiring these large mortgages may have complicated financial affairs and it would be especially advisable to seek the advice of a broker, who will talk directly with the underwriters. They will certainly find the best company for your particular needs.

This is the best advice we can offer, whatever the size of loan. Contact an on-line broker and a whole range of options will be available to you. Millionaire or not!

More Mortgage FAQ’s
More Mortgage Articles

Technocrati Tags[mortgages]

Author: Emma Mayo

Never mind getting on the property ladder – two in five 18-25-year-olds haven’t got a driving licence, in many cases because they can’t afford to even get onto the car owning ladder.

There are many costs related to running a car, and it’s all too expensive for many young people. To get a driving licence, they have to take driving lessons, which now cost around £15 per hour. Although some drivers pick it up quickly and pass first time, many go on to take a second test, and maybe a third, and so on.

Once you have your licence, you need to buy a car. Cars aren’t cheap, and even second-hand cars mean expense as they are more likely to need to be repaired and fixed regularly. Then there’s the road tax, and car insurance always costs more for young drivers. The average cost for buying a car and running it in the first year is a whopping £5,700 – that could be a sizeable proportion of a young person’s yearly wages.

A quarter of young people with a driving licence don’t have their own vehicle – so it’s clear that there’s a serious problem with young people getting their own wheels.

It’s understandable that so many young people are choosing to go with public transport for the time being. Statistics like this one from Pass Plus, which offers training schemes for drivers, say that in the first year of driving one driver in five is involved in an accident – so that’s even more potential expense, especially as many young drivers can only afford third party insurance.

There are other forces at work too. The general cost of being a young person such as university costs and a lack of income, debts, and low wages – all combine to make it almost impossible to afford buying a car.

So what are young people doing about it? A survey from Direct Line has shown that many rely on borrowing their parents’ cars. Others are thinking about sharing a car with friends, so the costs are easier to deal with.

There are also other implications, namely on road safety. A spokeswoman from Direct Line said: “With fewer first-time drivers owning their own car there can be increased pressure on those with one to drive all their friends around”. The survey showed that 17% of young drivers feel pressurised by their friends to do the driving, 18% feel pressurised into taking more people into the car than it can legally hold, and 41% find it hard to concentrate on driving with passengers distracting them.

The car insurance industry has a few tricks up its sleeve to help young drivers get on the road. For example, Norwich Union has come up with a new scheme which allows young people to use a pay-as-you-drive scheme, see www.norwichunion.com/pay-as-you-drive for more information.

Insurance companies also offer incentives of up to 35% off for new drivers who have taken Pass Plus lessons, or who have taken a driving course with the Institute of Advanced Motorists. Lessons cost between £15 and £30 per hour but could save you hundreds on your car insurance.

For the cheapest car insurance deals, search on the Internet – car insurance is invariably cheaper and many of the mainstream insurers offer online discounts – making it a little bit easier to get on the road!

More Car Insurance FAQ’s
More Car Insurance Articles

Niche Car Insurance

Woman Drivers
High Performance Drivers
Classic Car Drivers
Young Drivers
Mature Drivers
Max no claims bonus Drivers

Technocrati Tags[car insurance]

Are you considering investing in the “buy to let” property market? Well, for a start you’ll need to choose the ideal property in the right location, fix the price, find a mortgage company to accept your proposition and then you’ll have to find between 15% and 20% of the agreed price as a deposit, plus stamp duties, surveys, search fees and legal expenses.

First of all, the area. If you’re thinking on a local basis, it’s easy enough to check a few letting agencies to see what sort of rental income homes in your area are achieving and if they seem to be letting easily. There are advantages in being able to keep an eye on the property and you may be able to carry out some of the maintenance yourself, saving costs.

If your thoughts are to look for something further afield, there are “investment hot spots”. There are a number of areas where accomplished landlords are starting to show interest. UCB Home Loans (Nationwide’s buy to let arm) have recently reported promising investment conditions in London, Colchester, Rugby, Peterborough, Bristol, Swansea, Glasgow and Belfast.
It doesn’t follow that all districts in large cities will offer the same investment opportunities. In London, for example, the prospect of the Olympics and up-grading of the area make east London an interesting proposition.

As far as a mortgage is concerned, buy-to-let lenders need you to demonstrate that the rental income will exceed the mortgage payments. It is usual for lenders to ask for a 15 to 20 per cent deposit and will expect you to show that the rental income will come to around 125% of the mortgage payments. This shows that you’ve allowed additional cash to pay for incidental expenses. Typically these are maintenance of the building and furnishings, letting agents’ fees, advertising and insurance of buildings. There may also be ground rent to pay. If you’re considering renting out a flat or flats, there will possibly be management charges. You may have to consider accountants fees too. Remember that if your property is unoccupied between tenants, you’ll still have to meet the mortgage payments.

Properties let for multiple occupation, i.e. having three of more storey and five or more unrelated tenants, will require licences and compliance with certain regulations which can be costly to implement.

HM Revenue and Customs will be interested in your investment too. First of all you need to inform them that you have become a landlord within three months of letting the property or you will risk a fine of £100.

Expenses can be offset against the rental charges so keep all invoices and receipts and the income after this is taxed under Schedule A, between 22 and 40 percent, depending on your income.

If you decide to sell the property and the value has increased, Capital Gains Tax will come into the equation. Calculations are as those for income tax so if you’re in the 40% tax bracket, this will apply to your income from let property too. You have a yearly CGT allowance. For 2006/7 this is £8,800 and if you own the property jointly with your partner, both can claim this amount. As an allowance for inflation, after the first two years the gain is reduced via taper relief at 5% for each year you own the property. There is a maximum term of 10 years for this.

Still on the tax front, when the property is occupied, the council tax is paid by the tenant. If the property is unoccupied and unfurnished there is no council tax payable for the first six months and thereafter a charge is made at a discounted rate. Similarly if the property is furnished but unoccupied there will be a discount on the full rate.

The good news is that mortgage rates have come down and are now not very much higher than standard residential deals. Two year fixed rates start at 4.99%.

Rental income is climbing at the fastest pace since mid 2001, according to a recent survey from the Royal Institution of Chartered Surveyors and landlords have been increasing the number of properties in their portfolios. Loans advanced on buy-to-let properties have increased considerably in recent months.

If you find a suitable property, a sensible move would be to make your next step via an internet mortgage broker. There are an increasing number of buy-to-let lenders and a wide variation in the type of mortgages on offer. A broker will do your research for you, considering your circumstances and come up with best possible deal.

More Mortgage FAQ’s
More Mortgage Articles

Technocrati Tags[mortgages]

The offset mortgage is a relatively new kid on the block, and has taken the industry by storm so far. Although it is nowhere near catching up the traditional favourite, the repayment mortgage, it has proven to be a strong up- -and-coming contender. That’s why virtually all lenders now offer an offset mortgage as part of their portfolio.

A recent study carried out by Abbey clearly demonstrates the real selling point of the offset mortgage. It actually gives you the opportunity to pay your mortgage off early, thus saving you thousands of pounds. The study showed that by saving just £3 a day, a mortgage of £180,000 at 4.99% could be cut short by three and a half years, with a saving of almost £22,000.

So in basic terms, if you make a sandwich every morning rather than buying lunch at the local shop, then you could save £22,000!

At first, the offset mortgage was considered to be suitable only for those with large savings. Of course, having savings helps immeasurably as it means you pay a lot less in interest. But all you really need is a willingness to save and to put in a little extra effort to overpay as and when you can.

The offset mortgage works by linking to a savings account and with many, but not all lenders, a current account. The interest is calculated daily so if you get paid a salary of £1500 for month for example, then as far as the interest calculation is concerned, the amount will be less for as long as that extra is sitting in the account.

There is disagreement within the industry, for example David Hollingsworth, spokesperson for London & Country Mortgages, warns: “Offset mortgages carry higher rates of interest, so you need to be able to make up the difference.” Whereas a spokesperson from First Direct said: “You don’t need a great lump sum. Just a couple of thousand pounds chips away at your mortgage”.

The reason why offset mortgages are not the obvious choice for everyone is due to the fact that they are more expensive to run. On average they charge 1% per cent more than other mortgages, so you need to be wiling to pay more than you would necessarily need to, keeping the long-term benefits in mind.

Play the offset game

Offset mortgages are an excellent way to get full control of your money when they are linked to a current account. Every penny that stays in the bank is saving you on interest, so naturally you’ll be keen to keep it in there for as long as possible! There are ways of helping this along, for example, you can use a credit card for all your purchases, and pay the balance off at the end of each month. That way, your salary stays in the current account for longer. You can also move all your direct debits to the end of the month so, again, the money sits in your bank account for a longer period of time.

Every penny counts

You can also save more by switching to the cheapest utilities suppliers, moving credit cards to make the most of the cheaper interest rates, and searching for the cheapest insurance deals.

The Internet is the place to go for the cheapest deals on insurance, you will also find a lot more information on offset mortgages. Simple search on ‘offset mortgage’ to find out all you need to know. When it comes to choosing your mortgage however, always seeks independent advice – it’s too complicated a decision to go it alone. After all, the right decision could mean a difference of thousands of pounds in the long term.

More Mortgage FAQ’s
More Mortgage Articles

Technocrati Tags[mortgages]

In this day and age, it’s hard to live cheaply, but if you really try, then two people can live side by side for the cost of one person. So it comes as a surprise that with car insurance, it’s possible for two people to be cheaper than just one person.

Insurance companies all have their criteria based on where you live, how long you’ve been driving, your gender, and how many accidents you’ve had. Every insurer is different and that’s why, when you get a quote, the premiums can vary wildly.

Some car insurers put safety first, and the insurer ‘Privilege’ is one of them. They have an ‘insured and partner policy’ which rewards safer drivers in long-term relationships with lower premiums. Managing Director of Privilege, Ian Parker, describes the ethos behind it, saying: “The responsibility of being in a long-term relationship translates into safer driving”.

These examples illustrate the savings to be made from having your partner on the policy:

Example 1 - A 38-year-old living in London SW2 with 5 years no claims looking for fully comprehensive cover on a 2001 Citroen Picasso would pay a yearly figure of £531.30. With his 37-year-old partner on the policy, the premium drops by £47.25 to £484.05.

Example 2 – A 37-year-old with the same car and other details but living in Tonbridge, Kent would be offered a premium of £270.90 for the year. With the addition of a 38-year-old man on the policy, the premiums falls by £21 to £249.90.

It’s not just Privilege that offers this policy, many of the big name insurers do – although they don’t publicise it that well.

So what do you need to do to qualify for an insured and partner policy?

§ You both need to live at the same address. And there’s no use pretending, the insurer will check the electoral register.
§ You need to live together as if you were married. It can be an opposite or same sex relationship. It’s not necessary to be in a civil partnership or married. You can’t do it with someone who’s related, for example your mother or sister, even if you do live with them.
§ You must both be aged over 25, and have good driving records. The best prices are reserved for couples that are of a similar age, and have a similar number of years driving without having made a claim.

Incidentally, it doesn’t matter how many miles you drive, that won’t make a difference to the premiums.

The policy will benefit both drivers when it comes to no claims – as you will both build up your no claims further while on an insured and partner policy. So if you do split up or one of you becomes unable to drive, you don’t need to worry about losing any of your no claims.

If you live with your partner and fit the criteria discussed in this article, then try getting quotes for an insured and partner policy next time. You could save considerably compared on two separate policies, or one as a named driver. With the extra benefits relating to the no claims discount, it really is worth looking into.

More Car Insurance FAQ’s
More Car Insurance Articles

Niche Car Insurance

Woman Drivers
High Performance Drivers
Classic Car Drivers
Young Drivers
Mature Drivers
Max no claims bonus Drivers

Technocrati Tags[car insurance]

We heard recently of an unusual and little known type of dormouse. They are to be found within a 25 mile radius of Tring, in Hertfordshire. It appears that Lord Rothschild had a fascination for wildlife and in 1902 he introduced these little creatures to his estate. They are actually an edible dormouse, otherwise known as “glis glis”.

In ancient Roman times, these 6” long dormice were fattened up to be consumed at banquets but they have turned the tables and now causing all manner of problems by eating their way through homes in the area. Cables and insulation seem to be their favourite diet. They are a protected species so can’t be eradicated by normal pest control methods; instead they need to be trapped professionally.

Vermin are causing havoc in the rest of the UK and ICM have done some research which reveals that one in ten households have had a problem with some type of pest within the past year. Some have been faced with hefty bills in an effort to rid themselves of the pests. There is help from the local council but as these pest infestations tend to be seasonal, there can be long waiting times. Private pest control contractors vary in efficiency and cost. It’s a case of “beware of the cowboy”, although it has to be said there are some excellent and experienced firms out there – the problem is that the industry is unregulated, so there is no standard to use as a comparison when considering the choice of a contractor.

When it comes to insurance, it’s unusual for household policies to cover damage from vermin. It’s usually excluded via an accidental damage clause. You may find that consequential damage would be covered, i.e.: if vermin chewed through an electrical wire and consequently caused a fire, most insurers would cover this.

The most common pests are grey squirrels, rats, mice, wasps and hornets. Esure offer an add -on to its home insurance cover. For an additional £21.99 per year they will offer a vermin control service covering problems with the above five pests. Even the cost of removing a hornet’s nest could be as much as £100 so this extra is certainly worth considering.

Squirrels can cause the greatest problems. Should they gain access to your home, normally through the loft space, then they can cause absolute mayhem. Broken ornaments, chewed valuables and furniture often result. The cover provided by Saga is unusual in that all its household policies include cover for damage caused by these creatures. It’s Cover Plus policy provides cover for damage caused by all pests, with the exception of damage done to pedal cycles!

It would be unwise to underestimate the damage which could occur should rats and mice gnaw through cables. Fires can be cause in this way and rats can even gnaw through pipes, causing flooding. There is a case of the whole upper floor of a house collapsing because of the wooden joists had been chewed through by rats.

Some sensible precautions should be taken to avoid problems. Outside the house, make sure that bags containing rubbish are put into lidded dustbins. Clear up around bird tables and feeders. Don’t put cooked food onto compost heaps. Drains and covers should be checked for damage and general clutter should be tidied. Inside the house, vermin is attracted to pipe work and this is how they move around. Seal up holes using steel wool or plaster. Check around the hot water tank, under the sink and in the loft. Avoid storing packing tissue, cardboard boxes and things like cuddly toys and unwanted clothes up there – they make a perfect ready made nest for vermin.

So there’s a lot you can do to avoid problems. However, should they occur, you’ll need your insurance cover. An on line insurance broker will be able to sort out what’s available and will find you with the best way to get some insurance against these pests.

Technocrati Tags[home insurance]

Brace yourself for the surge of new-style car insurance policies about to hit the high street. Leading the charge is supermarket giant Tesco, with its new low-cost “no frills” option. And where one company leads, you can be sure the others will rush to follow with their own “bargain basement” policies.

So how do other insurers rate the new policy? According to Norwich Union, Tesco have found a gap in the market for simple, nuts-and-bolts cover with no added extras. Applying the results of their own two-year study of 5000 motorists, they are hoping that their new policies are just what car drivers are looking for. The AA are less enthusiastic about the new version: shop around, they say, and the traditional fully comprehensive can be found for same price, but without the high excess.

With both insurers keen to gain new clients and keep their places at the top of the “Best Buy” league, the resulting competition will be one to watch.

So, how do these policies compare to traditional insurance?

Tesco have brought out a “hybrid” insurance giving more cover than a basic third party policy, but less than the more common fully comprehensive. Let’s take a closer look: no courtesy car if your own is off the road, young drivers are not eligible, and the excess is a whopping £475. There is no protection for your no-claims discount, and any repairs your car might need have to be carried out at designated garages only. Unlike the normal three year guarantee, there’s a limit of only 12 months on any work they carry out. Cover can only be bought online. But, if you don’t mind the restrictions on the pared-down policy, it comes in at 12% less than Tesco’s standard cover.

Spotting a gap in the market, Norwich Union are offering a policy specifically designed for young drivers. Existing customers’ driving patterns are monitored and charges scaled to fit. Each time a client drives between 11pm and 6am, they incur a £1 charge – research shows that young drivers are more likely to be involved in an accident at night. At present, the policy cannot be provided for new customers.

Keen not to be left behind, Direct Line are bringing out their own low-cost range, and It will only be a matter of time before all the major companies follow the trend.

Confusing? Consider what the new policies don’t cover, as well as the lower prices. Simply put, you can have cheaper fully comprehensive cover, if you don’t mind losing some of the added benefits of traditional policies such as a lower excess. Look around online, and it’s easy to find a car insurance broker who will be able to offer a tailor-made policy suited to exactly what you require. If you know what you want, finding a bargain is easy, and the company will even research the cheapest deal for you free of charge.

Older drivers are still at a disadvantage when it comes to insurance costs. With Government plans to introduce regular eye tests, along with other medical checks to be carried out three-yearly, driving in your older years could become prohibitively expensive. Charity Age Concern wants tests of driving fitness to be based on ability, not age, but the Association of British Insurers want mandatory tests based on a set period. Old age, they say, can slow the reflexes and eyesight can deteriorate, meaning that elderly drivers are at higher risk of accidents. According to the Association, the rate of serious or fatal accidents rises after middle age, with more accidents of all kinds per mile driven. Passengers and other road users are also all at higher risk.

After the age of 60, car insurance premiums start to get higher again as underwriters become wary of taking on new clients. Here’s a typical scenario from the AA: a 21 year old woman, paying £326 as a new driver, will qualify for a much reduced cost of £197at 60. Should she choose to drive at 80, however, the premium will have risen sharply to a sky-high £460.

But all is not lost; there are specific policies tailored for the older driver. With the retirement age set to rise and people expecting to enjoy a more active old age, there is clearly a need for better insurance for the elderly. Age Concern, Saga and Help the Aged all offer their own specially designed policies. In fact, there are more options every day – contact an online broker and they should be able to give you all the most up-to-date information you need.

It’s your policy – shop around, and make sure it’s giving you what you want as well as what you pay for!

More Car Insurance FAQ’s
More Car Insurance Articles

Niche Car Insurance

Woman Drivers
High Performance Drivers
Classic Car Drivers
Young Drivers
Mature Drivers
Max no claims bonus Drivers

Technocrati Tags[car insurance]

Most people are used to sharing accommodation as students, trainees or renters therefore the idea of living in jointly owned property is the next logical step.

Jane Harrison of London & Country Mortgages says, “Lenders generally take a pragmatic view of friends buying together and it is relatively easy for both to obtain loans of three times salary. But…one needs to go into it with very realistic views.”

The maximum number of names on a mortgage deed is legally limited to four. But, in any case, lenders take a dim view. “If you have three people together, it doesn’t help much in what you can borrow,” says Charcol’s Mr Boulger.

Lenders will take the best of two incomes and multiply that by three or four times. The third income will only be multiplied once.

Legally there are two types of joint ownership. You can either own the property as ‘joint tenants’ or as ‘tenants in common’. What ownership type you opt for depends on your particular circumstances and reasons for buying.

Under the ‘joint tenancy’ agreement the joint owners together own the whole property and do not have a particular share in it. If one of the owners dies, the other will automatically become the sole owner. This would apply even if a will had been made leaving the deceased owner’s ‘share’ to someone other than the co-owner.

The opposite of joint tenancy, ‘tenants in common’ means that each have a definite share in the property. This would be the most appropriate option if you wanted to own a property in separate pre-determined shares.

Under this form of ownership if one of the owners dies, his share of the property will pass on to whoever he specifies in a will, or if a will is not made, in accordance with the rules of intestacy.

Once you have decided on an ownership tenancy, the first things you need to consider are how much you can borrow and what is the most suitable mortgage for your circumstances.

You next need to consider carefully who you are investing with and should put measures in place to protect your investment.

Mortgage broker Ray Boulger of Charcol recommends co-buyers ask their conveyancing solicitor to draw up a legal contract. “We would always advise proper legal documentation where you buy as “tenants in common” which should detail what happens if either of you want to move on. Remember that if you buy together, each person is jointly and severally liable for the mortgage - even if you own just 25%, if your co-buyer defaults, you are responsible for the entire mortgage.”

To make the joint property investment work you will need to:

· Feel that the person you have chosen to invest and live with is trustworthy and is someone you could get on with
· Draw up a trust deed, or declaration of trust, and cohabitation agreement that you are both/all happy with
· Be reasonable with each other, discussing and settling any possible areas of dispute
· You will each be putting down separate deposits on the property. You will probably want to set up a joint bank account from which the mortgage payments and perhaps other household expenses are paid.
· How the profits from the house are split when you come to sell.

You will also need to discuss the following and know what you agreed between you:

· Amounts of deposits paid (the lump sum you have to pay at the beginning)
· What ‘share’ of the mortgage is each party going to pay?
· Home insurance, mortgage payment protection and critical illness payment protection
· Stamp Duty Land Tax
· Solicitors’ fees, searches, etc.
· House maintenance (decorating costs, roof repairs, etc).
· Cost of a surveyor
· What would happen if one of you was to die
· Lodgers/renters/how rental income is split
· Re-mortgaging, selling or finding a tenant

What you both or all decide about these issues will be covered in either the trust deed, declaration of trust, or co-habitation agreement.

Also remember that having a joint mortgage means that you are both or all responsible for keeping up with the mortgage repayments.

If any of the joint owners is unable to pay into the mortgage for any reason, the payments will still be required by the lender and alternative arrangements should be made to pay the mortgage.

While there are many issues to consider before entering upon an agreement, the benefits of owning a home, solely or with friends can be financially rewarding, especially in the rising property market today.

Luckily, as joint ownership is a developing trend, more and more mortgage lenders are offering mortgages designed specifically with joint owners in mind which makes joining the property market not such a distant dream.

More Mortgage FAQ’s
More Mortgage Articles

Technocrati Tags[mortgages]