Rishi Sunak’s second Budget as Chancellor brought two pieces of welcome news for the property sector as the Government attempts to transform “Generation Rent” into “Generation Buy” to help stimulate the UK economy, namely the new 95% Mortgage Guarantee and an extension of the Stamp Duty Holiday.
The name of this scheme is misleading as not everyone that applies is guaranteed to be offered a mortgage, it is still subject to affordability and credit score. The “guarantee” itself is that the Government will ensure Lenders don’t stand a loss if they grant a 95% mortgage to a customer who then subsequently falls into arrears and is repossessed leaving behind negative equity.
This scheme should in theory give Lenders more confidence to lend even though the applicant only has a smaller deposit to put down. Of course, Lenders never want to repossess someone’s home unless it is the last resort, but if that happens then the new scheme would cover any shortfall.
Lenders have been worried about the prospect of home values decreasing so this measure should alleviate that concern although of course, the chances of negative equity occurring will naturally reduce should property prices increase as a result of these announcements!
The scheme is available to both 1st Time Buyers and Home Movers, it’s available on any property (not just new build) and will run until December 2022. Some major High Street Banks have already signed up to the scheme and it’s likely more will follow later on. It’s still a big challenge for Lenders to cope with the demand they are getting for mortgages due to the difficulties training and supervising staff working from home but they will want to offer as many of these mortgages as they can.
When the Stamp Duty Holiday was launched last year we all hoped life would be very much back to normal by the cut-off date of 31st March 2021 but things didn’t pan out that way as we know. Solicitors are struggling to keep up with the workload and if lots of chains had collapsed then it would have partly defeated the object of the exercise.
Therefore it was good to hear the scheme has been extended to 30th June for purchases up to £500,000 and 30th September for purchases up to £250,000.
The Government certainly sees the property sector as an area that can play a big part in our economic recovery and if you are looking to buy a home or remortgage this year please reach out and we will be happy to advise you.
Mortgage Protection Insurance is an umbrella term used to encompass various different types of insurance. The purpose of any type of mortgage protection cover is to limit financial stress on you and your loved ones from any unforeseen circumstances that may occur later down the line.
Here Malcolm has put together a video to talk to you about the significance of having the correct insurance in place for your personal circumstances. The key message here is due to the coronavirus pandemic; the importance of health and getting insurance is now higher than it has ever been.
There are a lot of different insurance options to choose from when it comes to protecting you and your family. Here at Essexmoneyman, we are able to compare lots of providers in order to find you the best policy for your own individual circumstances. The following insurance policies that we are able to offer you are:
For some clarity on each of these, Get in Touch and speak with one of our experienced & trusted Mortgage and Protection Advisors in Essex today. Our dedicated team will always be at the other end of the phone or email to help with the insurance process.
Life insurance is an insurance policy that minimises your loved ones’ financial impact in the event you or another joint policyholder pass away. Our Mortgage Advisors in Essex can run through all the different life covers accessible to you and advise the most suitable plan for you.
Critical illness cover is an insurance policy that covers serious illnesses detailed within a policy. Typically, these will include Stroke, heart attack, certain types and stages of cancer, and more.
Various illnesses will not get covered, for example, certain types of cancers. And you are unlikely to be covered for pre-existing health issues you knew you had before taking out the insurance. As mentioned, the specific illnesses covered and not covered will be detailed in your policy.
The most important thing is that the benefit gets paid if you fall victim to one of several specified critical illnesses and pays out whatever the long-term prognosis of that illness. The type of conditions covered vary from company to company; that’s why this type of insurance cannot be solely price-driven, and seeking Specialist Mortgage Advice in Essex is advised.
In practice many businesses will offer Life and Critical Illness Critical cover as a combined policy and would usually payout on the “first event,” namely whatever happens first – either death or a severe illness – the payout is made. They could also get written on a single or joint life basis.
Whereas Life and Critical Illness cover pay out a lump sum, Income Protection pays out a monthly sum intended to replace your wages if you are unfit to work. In contrast to the Critical Illness cover, there are no limitations on the illnesses or injuries covered, the only factor being whether they make you unfit to work.
There are, however, the restrictions on how much you can cover and how quickly benefits would start to get paid. Such As Life and Critical Illness cover, these policies are underwritten based on your health and lifestyle when you apply. All income protection policies get written on a single life basis.
You can combine Life Insurance, Critical Insurance and Income Protection, into what’s called a menu plan. The providers give you a discount each time you add a benefit in, which can be a cost-effective way of taking cover.
With a Menu Plan, you can mix and match a range of cover and benefits to tailor a plan that suits your needs and budgets. We strongly advise all our customers should the worst happen, least you have covered yourself and your family, to find out more speak to one of our mortgage Advisors in Essex today.
The least common of the mortgage protection policies can often be useful, especially for young households. These plans can get taken to Life and/or Critical Illness Cover, and get underwritten on the application in the same way.
However, in contrast to the traditional forms of policy, rather than paying out a lump sum, the cover would pay an annual or monthly income for the remainder of the plan’s term. Consequently, it can replace the primary worker’s payment for several years, dependent upon a particular client’s circumstances. Such an approach would usually get written on a level or basis, or an index-linked basis designed to keep up with inflation.
Many people have one or more of the different types of policy, and it would be wrong to think of Mortgage Protection Insurance as just an “either/or” choice. However, affordability plays a massive part, whilst it would be fantastic to cover yourself for every potential opportunity.
Our Mortgage Advisors in Essex are here to discuss with you and tailor the type of cover to be the most suitable combination to your family’s priority and budget. To find out more, give us a call or fill out our enquiry form to speak with one of our Dedicated Protection Specialists Advisors in Essex today.