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.
95% Mortgage Guarantee
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.
Stamp Duty Holiday Extension
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.
Why Mortgage Protection Insurance is Essential to Have in Manchester
Insurance Advice in Manchester
Mortgage Protection Insurance is an umbrella term used to explain different kinds of cover available to customers who have taken out a mortgage. This cover got designed to reduce financial concerns for both you and your loved ones, in the event of any unforeseen circumstances that may occur whilst the mortgage process is active.
Here Malcolm has recorded a video to speak to you about the importance of having the correct insurance in place for your situation.
The central message here is due to the coronavirus pandemic; the importance of health and getting insurance is now greater than ever. There are differences in insurance to choose from when it comes to safeguarding you and your family.
Here at Manchestermoneyman, we will be able to compare lots of providers to help find you the best policy for your circumstances. The following insurance policies that we can offer to you are:
Critical Illness Insurance
Income Protection Insurance
Family Income Benefit
For further clarification, get in touch and speak with one of our knowledgeable Mortgage and Protection Advisors in Manchester today. Our team will always be at the other end of the phone or email when you need to discuss.
Life Insurance Cover
Life insurance is an insurance policy that reduces the financial impact on your loved ones in the event you or another joint policyholder pass away. Our Mortgage Advisors in Manchester can run through all the different types of Life cover accessible to you and advise the most suitable plan for you.
Critical Illness Insurance
Critical illness cover is an insurance policy that covers serious illnesses detailed within a policy. Usually, these will include Stroke, heart attack, certain types and stages of cancer, and more. However, 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 significant 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 Manchester is recommended.
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 in the event of you being 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, 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 at the time you apply. All income protection policies get written on a single life basis.
You can also combine Life Insurance, Critical Insurance, and Income Protection, into what’s called a menu plan. The providers do give you a discount each time you add a benefit in, and that 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 Manchester today.
Family Income Benefit
The least common of the mortgage protection policies but can often be useful – especially for those with 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 pay out a lump sum, the cover would pay an annual or monthly income for the remainder of the term of the plan. Consequently, it can replace the payment of the primary worker for several years, dependent upon a particular client’s circumstances and, because of this would usually be written on a level or basis, or an index-linked basis designed to keep up with inflation.
Get in Touch with a Mortgage Advisor in Manchester Today
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 Manchester 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 Manchester today.
What is a Cashback Mortgage?
Cashback Mortgages Explained
There are a wide variety of different mortgage types available, so many that a first time buyer in Manchester might be left scratching their head, as they try to figure out which one is actually right for them.
Each mortgage variation has its own advantages and disadvantages to them, which is where a mortgage broker in Manchester comes into play. They can review your circumstances to look and find the perfect mortgage option that is out there, for you.
Here we will be taking a look at how cashback mortgages work, how they can help benefit borrowers such as yourself and how this mortgage compares to other mortgage options that might be out there for those looking at first time buyer mortgages in Manchester.
What is a cashback mortgage?
A cashback mortgage is where you receive some cashback, once your mortgage term is paid off and has concluded. You will typically receive a percentage back of what you have borrowed. We typically see this percentage at 1-2%.
With some cashback mortgages, you might find that your mortgage lender will set a fixed price in your mortgage contract. Even if your mortgage deal is long-term, this amount will not change, meaning it will not decrease, but it will also not increase either.
Will a cashback mortgage benefit me?
As discussed, a cashback mortgage, much like the other mortgage options that are out there, will have both pros and cons for home buyers.
For example, most cashback mortgages will typically come with a free property valuation or some fringe benefits. This means it could be quite useful for you and help you to save money in some areas where you may not think you would.
Additionally to this, cashback mortgages can also work for customers who are looking to borrow much smaller mortgages, as you are able to get some money back and have some benefits, despite not borrowing a larger amount.
As an open & honest mortgage broker in Manchester, we advise that if you are offered a reasonable percentage on your cashback mortgage, you should consider taking it up as it may be worth it in the long run for you.
The only major disadvantage to a cashback mortgage is that they typically will come with higher interest rates.
Different Types of Mortgage in Manchester
As we have mentioned previously, there are lots of different types of mortgages that are available. You can learn more about them in our article under the same name.
Cashback mortgages are not always the most popular option, though we still find ourselves receiving enquiries about them and they are definitely worth considering. They are also a great choice in back-up plans, if your first mortgage choice doesn’t go the way you’d like it to.
If you want to find out more about the different types of mortgages, then you should definitely get in touch with us for specialist mortgage advice in Manchester and speak with one of our trusted mortgage advisors in Manchester.
It is the job of our expert team to find the perfect mortgage solution for you. No matter what your situation is, we have likely come across something similar to yours throughout our time in the mortgage industry.
We will use our experience to help find you the most suitable mortgage option, mortgage deal and mortgage outcome for you, based on both your personal and financial circumstances.
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