Life insurance with mortgage ‘good for parents’

People with dependants are advised of the benefits of getting life insurance when taking out a mortgage.

According to Key Financial Consultants Ltd, many first time buyers neglect to take out life insurance due to other expenses.

It advised that, as life insurance is cheaper the younger the applicant, it would be beneficial for people to take it out when getting a first mortgage.

Managing director of the independent financial advisory firm, Dominic Mansley, commented: “If it’s a single person looking to buy a flat by themselves, and they’ve got no dependants, then we wouldn’t really worry about a lack of life cover.

“However, if it’s a young family with children then we would very much make them aware of the need for [life insurance].”

Furthermore, he said, if people fail to take out life insurance along with their mortgage, they do not tend to take it out later.

The Association of British Insurers states that as many as one in every three Britons does not have life insurance.

Tags: person, Key Financial Consultants, Key Financial Consultants Ltd, family, three britons, Consultants, life, first time buyers

Negative payment ‘fiddling’ widespread

Recent research shows that a staggering 296 out of 300 credit card providers use a negative payment hierarchy.

According to Fool.co.uk, 99 per cent of people with a regular balance on credit cards with varying interest rates on debts are being ripped off by their provider.

“It is not illegal to fiddle with the order in which payments are allocated on credit cards. But negative payment hierarchy is a devious way to exploit customers’ inexperience,” said David Kuo, head of personal finance at the finance site.

“Our study shows that whilst the vast majority of card providers employ this sly practice, Nationwide and Saga should be applauded for their use of ‘positive’ payment hierarchy,” he added.

Those particularly at risk from negative equity payments are people using zero per cent credit cards for balance transfer as well as purchases and cash withdrawals.

Repayments made on the card will then go towards pay off debts with the cheapest interest first, while debts with heavier interest are left to stack up interest charges and earn the provider money at the cost of the card holder.

Nationwide have revealed that consumers could pay an estimated £500 million on interest without knowing before banks are required to outline the order in which payments are made next year.

Tags: economics, credit, money, hierarchy, repayments, pay, negative equity payments, inexperience

Tracker rate deals gaining popularity

Fear over the fate of the UK property market has led to a significant increase in tracker rate mortgage interest.

According to GE Money, tracker and discount products are set to account for a third of all broker business, representing a 120 per cent increase from the last quarter.

The changes results from the fact that 89 per cent of mortgage brokers believe that interest rates have peaked, with nearly half anticipating a fall in the base rate in the next few months.

Subsequently, brokers are increasingly recommending discount and tracker products over longer fixed rate deals.

Gerry Bell, head of mortgage marketing at GE Money home lending, said: “Consumers and brokers alike have clearly been concerned by the recent stress in the financial sector and our research indicates that the market is now being boosted by a possible decrease in interest rates in the coming months.

“This will also be welcome news to those homeowners currently coming to the end of a fixed rate product who are concerned about re-mortgage products and rates that will be available to them.”

The UK markets have felt the far-reaching impact of the sub-prime mortgage crisis afflicting the US this year that has led to worldwide credit squeeze.

Tags: cent, research, Mortgage broker, welcome news, interest rates

Careful product choice can save money

Making shrewd financial decisions can still save people money, even in times of tightening credit markets, according to Moneyextra.

The company has revealed that consumers can save a total of £4,225.46 every year by replacing near-worst with near-best financial product, representing a £250 increase in savings available from last year.

Mortgages were among the areas where savings could be made, despite seeing a decrease after global credit crunch, with potential annual savings at £2,586.

Robert Amlot at Moneyextra, commented: “Choosing the right mortgage can help keep your wallet healthy and make the difference between running up other debts and remaining solvent.

“The potential savings on your mortgage account for more than 61 per cent of the total savings to be made.”

He added that while personal loan rates are competitive, lenders are increasingly strict and good deals are generally only available to people with excellent credit history.

“Shopping around for the right savings products can pay dividends,” he said.

Tags: Robert Amlot, potential savings, debts, product, money, near-best financial product, Mortgage loan

Consumers can enjoy new home insurance deal from bank

One of the nation’s leading building societies, the Nationwide, has recently launched a new home insurance package that offers a number of benefits to consumers.

Home insurance is a popular and important form of insurance cover, and is designed to protect consumers from the financial losses associated with their home and their belongings. Many people claim on their home insurance each year for anything from flood damage and accidental damage to theft or loss.

According to recent reports the Nationwide is offering a special deal where consumers can enjoy substantial savings when they sign up for home and contents insurance cover as a bundle package. Although these insurance types are available as separate products most insurance companies offer s discount to consumers taking both as a bundle, which enables the consumer to enjoy increased convenience and lower premiums.

Officials from the Nationwide have stated that consumers that opt for this new insurance cover will be able to enjoy improved customer services and well as better cover. The cover can include unlimited cover on buildings cover and cover for items in the garden. Consumers are advised to familiarise themselves with what the policy covers before they sign up, as this will enable them to check that the cover is suited to their needs before they make a commitment.

Nationwide is so confident about this insurance product that it if offering up to £100 refund on the difference of better cover can be found for the same premium elsewhere. The cover offered by the building society will also cover students in the family that are living in student accommodations. Customers that pay by monthly instalments will not incur fees for the privilege of paying on a monthly basis.

Tom Smith
31st October 2007

Tags: savings, home, Insurance, cover, benefits, nationwide

BoE reports increased lending to individuals

The Bank of England (BoE) has reported a rise in lending in its Lending to Individuals figures for September this year.

It showed the increase in total net spending to be higher than August by £11.2 billion (0.8 per cent).

Within this figure, net lending secured on dwellings was up by £9.8 billion, up from an £8.5 billion increase in August

The number of remortgaging loans approved in September was up from August at 101,000, with loans for other purposes also on the rise at 67,000

Meanwhile the annualised growth rate increased by 0.1 per cent, despite the twelve-month growth rate seeing no changes, staying at ten per cent.

In related news, the mortgage market has taken a severe blow from recent credit squeeze, with lending at a seven-year low this month, falling 27 per cent last month from September’s figure for 2006.

Experts suggest that this could mark an eventual end to the housing boom and lead to a cool-down in the market and an easing off of house prices.

Tags: Individuals figures, News, bank, mortgage, Subprime crisis background information, bank of england, blow

Insurance switching gains momentum

There has been a marked increase in insurance switching, an industry expert has said.

According to MoneyExpert.com, the car and home insurance markets have seen a dramatic rise in people changing policy.

In the last six months, insurance customers for these sectors have abandoned in excess of 9.2 million uncompetitive policies.

The website’s Switching Index shows that, in the same period ten per cent have switched home insurance policy while 15 per cent have changed motor insurance policy.

In total, 9.27 million policies have been swapped in the last six months, which represents a staggering increase of 1.6 million from the previous quarter this year.

Sean Gardner, chief executive of MoneyExpert.com, said: “The good news is there are plenty of excellent offers out there and many product sectors are incredibly competitive – insurance being a prime example.

“It will almost certainly be the case that everyone can save money by switching and we would urge consumers to continue to seek out the best deals.”

Tags: home insurance, case, economics, best deals, insurance policy, Financial services, home insurance markets, momentum

‘Danger thresholds’ show borrowers most at risk

An industry expert has highlighted the fact that many people falling outside “defined thresholds” could be adversely affected by credit crunch.

Fool.co.uk urges mortgage borrowers to recognise the risks they could face from the wider impact of global credit problems by taking guidance from the Bank of England’s Financial Stability report.

It states that those with repayments of over 55 per cent of their total household income are most at risk, standing outside the defined thresholds.

David Kuo, head of personal finance at Fool.co.uk, advised: “Consumers should draw up a Statement of Affairs immediately to get a useful snapshot of their finances. The snapshot will tell, at a glance, whether you fall into one of the ‘at risk’ categories.

“Failing to draw up a Statement of Affairs in the current difficult financial climate is tantamount to driving a car without shock absorbers.”

The Financial Stability report speaks of a “tightening” in the money markets, pointing to the need for more focus on liquidity management and better stress testing among other things.

Tags: income, report, Head of Personal Finance, loan, The

Brits hiding their cash around the house

A recent report has revealed that an alarming number of Brits like to hide money around their homes in order to have ready cash when they need it rather than having to go to a building society, bank, or cash machine in order to get their hands on the money. Read more

Tags: hiding cash, firm favourite, cornhill insurance, banks, Free Cash Flow

Insurance company to receive training from Samaritans

The leading insurance company Legal and General is to receive training from the Samaritans according to recent reports.

Samaritans is a group that is trained to deal with sensitive situations in a sympathetic and understanding way, and it is known that insurance company staff members often have to deal with such sensitive situations yet do not receive the actual training to do this properly. It is thought that training from the Samaritans could enable Legal and General employees to adopt a far more understanding attitude.

According to officials from the insurance company many of the people that make contact with regards to making a claim are in a situation that requires sensitive handling. Both consumers claiming for themselves and those claiming with regards to another party can be in extremely sensitive situations, such as those ringing the insurance company after a loved one has passed away.

The Samaritans will be aiming to teach Legal and General employees how to handle sensitive situations such as the ones faced by insurance companies everyday, yet remain professional and friendly throughout. Many of those contacting insurance companies are going through a very tough time, and it is thought that the sensitive handling and manner of the employees at the insurance company could help to ease the situation somewhat.

An insurance official stated that those contacting insurance companies to make a claim often had enough on their plates without having to be dealt with by people that were neither sympathetic nor understanding. He said that this training can help employees to be more sensitive and understating whilst still dealing with the claim in a speedy and efficient manner.

Tom Smith
29th October 2007

Tags: good, Insurance, employees, samartatins, sympathy, company

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