By admin Comment • Investment • Mortgages 0 Comments

Inflation: Good Times?

Inflation: Are we looking at goods times or more bad times?
With
inflation sitting at it’s lowest in a decade and half (1.5% below the Bank of
England’s target of 2%) and now finally below wage increases; are we set to see
an end to the longest economic squeeze since Victorian times?  Lets examine the evidence:
We
are already seeing a significant fall in oil prices, now approaching their lowest
since records began in 1989, and in all likelihood inflation will probably
follow.  Capital Economics have suggested
that the average household is set to benefit around £455 per year just in the
fall of oil prices alone.
We
are also likely to see a “tax cut” in other areas over the next coming months
and with low inflation and rises in wages this means our pockets are going to
be a little fuller than they have been over the last couple of years.
But
low inflation and falling prices are only good in the short term.  Over the long term, Economists have concerns
that we may see ‘bad inflation’ similar to that witnessed in the US in the
1930s when inflation continued to fall with wages following shortly
afterwards.  This kind of ‘bad inflation’
last longer, has weaker growth and therefore takes longer for the economy to
recover.
There
are already concerns that this is already starting to evidence itself in Europe
(not including the fall in oil prices), particularly in Greece.  In an attempt to prevent this, European
Central Bank is set to begin quantitative easing in the coming months and with
this carries risk and unpredictability.
So whilst
in the short term we are expecting to see cheaper prices, increases to wages
and an overall improvement in the standard of living, in the long term,
however, things are still uncertain for the time being.
By admin Mortgages 0 Comments

Payday Lenders

PAYDAY LENDERS – The bits they don’t tell you about
We all have times where there seems to be more month than cash but
before considering a payday loan, make sure you look at all the options…
Did you know that taking out a payday loan can have an adverse
effect on your credit score?
No? Well, lenders view payday loans negatively as an inability to responsibly
manage your finances and can imply all other forms of borrowing have been
refused.

Keep in mind, a payday loan remains on your credit score for up to
six years and will essentially limit your ability to borrow, and more
importantly your ability to get a mortgage.
By admin Mortgages • • • • • • • • • 0 Comments

Forces Help to Buy

FORCES HELP TO BUY (FHTB) Scheme

According to the website GOV.UK there is a relatively low rate of home ownership in the armed forces.  To help and encourage service men and women to get on the property ladder, move home due to reposting or change their home as family needs demand, the Ministry of Defence have introduced the Forces Help to Buy (FHTB) Scheme.
The new scheme allows members of the armed forces to borrow up to 50% of their annual salary (maximum of £25,000), interest free, as a deposit for their purchase or remortgage.
The pilot scheme, which will run for the next three years, starting today, is not designed to reduce the amount of personnel in service accommodation, this is still an option if you wish, but to aid members of the armed forces in making that leap on to the property market.
Forces Help to Buy, your route to home ownershipChief of Defense Personnel, Lieutenant General Andrew Gregory, said:
“Through our work on the new employment model and the armed forces covenant we are continually striving to make improvements to those aspects of life outside of service which we know can be adversely affected by life in service.
“In particular we are keen to address the demand for greater stability, including access to home ownership, and an improved ability to exercise choice in the way our people live their lives.
“And so it is a hugely positive step forward that we are able to introduce the Forces Help To Buy scheme today, a year ahead of our original plan.”

So who is eligible?

  • You must have completed a pre-requisite length of service.
  • You must have more than six months remaining to serve
  • Meet the right medical categories, however, extenuating medical and personal circumstances will be considered.
There are a number of different lenders that will already stated that they will accept the Forces Help To Buy Scheme as a form of deposit without being punitive.  However,as always it is important to find a lender and product that suits your overall needs.  At DALES we will search the market to find the right deal for you. Why not contact us today on 01636 870 069 to discuss how we can help or why not look at our best buy tables Mortgage Best Buys.
Philip Dales Dip PFS Certs CII (MP & ER)
Philip Dales is principal at DALES Independent Financial Advisers, based in Newark and Nottingham. He has been an adviser for over 17 years helping many clients, including those in the forces with all aspects of financial planning, and retirement. For more information on this or any other aspect of financial advice contact t: 01636 870 069.

If you would like more information on this scheme and/or obtaining a mortgage, please contact us by email at advice@pndales.co.uk or by telephone on 01636 870 069 for more information or have a look at our web site www.pndales.co.uk Please note that this article does not represent advice, and the Forces Help To Buy Scheme, may not be suitable for you. P N DALES Ltd is authorised and regulated by the Financial Conduct Authority.
By admin Mortgages • Updates 0 Comments

First Time Buyers & Stamp Duty Land Tax

More Innovation for First Time Buyers


Stamp Duty Paid Mortgages 

Would you like someone to pay your stamp duty, perhaps you’ve saved up just enough for that nice shiny new house, but now have to set aside even more than you’d bargained for, to pay the tax man. 
Currently the rate for Stamp Duty is 1% on Properties valued at £125,001 through to £250,000, it doesn’t end there if the purchase price is higher the percentage increases, but for now lets assume that your buying between £125,001 and £250,000 as a first time buyer. 
So need a hand with your Stamp Duty, well Halifax’s new products may just be for you!
On Tuesday the 30th April Halifax will launch an innovative product range, of Stamp Duty paid mortgages for First time Buyers. Halifax will pay 100% of the Stamp Duty Land Tax due on selected products for first time buyers that fall into the 1% bracket (Purchase price between £125,001 and £250,000). 
There is a choice of products available, across the core range, Affordable housing, Help to Buy/ First Buy, NewBuy and MI New Home products. 
In essence the Stamp Duty Land Tax will be paid via a cash back arrangement, where the cash back is equal to the stamp duty, this will be paid to the conveyancer on completion.

Halifax have a wide range of products to suit most client types, and generally their rates are well placed within the market, criteria is consistent with their main competitors, so this offers a real opportunity to first time buyers, particularly when you consider that this is available on their Affordable housing, Home Buy/ First Buy, New Buy and MI New Homes scheme and their core range.

Full details of the new products are not available until tomorrow, but in the mean time this looks like a very positive step forward for First time borrowers, maybe now is the time to start looking at buying your first house!

Philip Dales Dip PFS Certs CII (MP & ER)
Director

For more information or advice on First Time Buyer Mortgages, Standard Purchases & Remortgages and other types of mortgages contact Philip Dales at DALES Independent Financial Advisers: Advice@pndales.co.uk, or go to our web site www.pndales.co.uk. Nottingham office: 0115 832 0265 or Newark Office: 01636 87 00 69.

The information above is for information purposes only, it does not constitute advice, for advice suitable to your personal circumstances please contact us directly and we will be happy to help.

For mortgages, P N DALES Ltd do charge fees, a typical fee for mortgage advice and processing is £350. 


DALES Independent Financial Advisers, Nottingham (West Bridgford) & Newark. Authorised and regulated by the Financial Conduct Authority: 496107.
By admin Comment • Mortgages 0 Comments

Mortgage Market Review & You

MORTGAGE MARKET REVIEW –
REGULATION OR MARKET CREATION & CONTROL

How will this affect you, the
consumer?
As consumers you may or may
not be aware of the Financial Services Authority’s mortgage market review.  This was a review conducted by the FSA over
the last few years, of how the mortgage market conducts itself.  This review was heavily influenced by the
financial crash in 2008.  The FSA issued
the policy statement (PS12/16) and the final rules which will come into effect
on 26 April 2014.  However, in the
majority of cases, most lenders have anticipated these rule changes within
their criteria or have already put into force those items raised by these new regulations.  These new regulations fundamentally alter the
mortgage market for you as consumers. 
So, I would advise all consumers to make themselves familiar with some
of these new regulations.  The following
is an example of the type of changes and how it will affect you, but I would
suggest that the regulator is not regulating but defining the market.

INTEREST ONLY MORTGAGES

An example of how these regulations
will affect you is a very lose term called responsible lending.  These terms are deliberately lose so that
each lender may interpret, and therefore be hung by, the regulations themselves.  So, how does it affect interest only?  The majority of lenders will now not accept
interest only in its strictest sense unless the loan to value is extremely
small and is backed up by investment products such as endowments.  Given the fiasco in the past over endowments
and miss-selling of endowments, in effect this kills the concept of an
endowment-linked interest only mortgage. 
Also these interpretations go further; in the past if you wanted an
interest only mortgage you would set up a repayment vehicle such as an
endowment or modern day an ISA at point of application.  However, these new changes preclude this as
the endowment or ISA needs to be existing prior to application.  This wasn’t even a requirement before the
endowment miss-selling scandal. 
Therefore again, killing new interest only, asset backed mortgage
applications.  Only those clients who have
been on interest only with asset baked provisions can obtain a new interest
only mortgage.  How about if you wanted
an interest only mortgage on the basis of selling your property to
downsize?  There are a handful of lenders
that will consider this but, of those, the majority will only accept the application
if you can prove that you either have 50% loan to value and/or sufficient
equity and capital resources to have over £150,000 at the end of the mortgage
term.  So, again, this kills the interest
only mortgage market.
But why is this a problem?  When comparing the financial benefits of a
repayment verses an asset backed interest only mortgage, or indeed resale of
property interest only mortgage, one should consider investment returns long
term versus interest rates and also house price increase on the basis of later
sale.  Right now, the Bank of England
base rate is ½% so I think most people would agree with me that we are in a low
interest period.  I think most people
would also agree that house prices are at an all-time low.  Also, one has to consider that if you were to
put £10,000 in a cash- based ISA you can achieve a return of 3 or 3½%.  One wold also suggest that if you were to put
your money in an equity based ISA whilst very volatile, again it would be fair
and reasonable to suggest that you would achieve 5% return in the medium to
long term.  So if these are compared,
clearly from a financial point of view it would be fair to suggest that an
asset based mortgage would be financially more astute than a repayment mortgage.  Classically, in a high interest rate period,
a repayment mortgage is better than as asset backed product on the basis that
one would have to achieve such high levels of growth to outperform the high
interest rate.  With this in mind I would
actually argue that, right now, interest only should not be being killed by the
regulator as it is a fully justifiable and potentially financially astute
repayment method, but if the only people that can have it are those detailed
above, ie those that have already had it, then the regulator is controlling the
market not regulating the market because, clearly, one should be allowed to
consider this type of arrangement.
If you would like more
information on how the mortgage market review may affect you or require
financial or mortgage advice please contact 01636 870 069 for your free
consultation.
Philip Dales Dip PFS Certs
CII (MP & ER)
DALES Independent Financial
Advisors, are a whole of market mortgage broker and Independent Financial Advisors.
Authorised and Regulated by the Financial Services Authority.