Self Building: The OTHER Way

by Magical Penny on July 27, 2017

 

stamp duty change 2016All over the UK, thousands of people are out there right now viewing properties and sighing with frustration at yet another property that just wasn’t right. It’s a frustration that anxious house-hunters face all over the country. In the face of a severe housing crisis, the UK has many (especially young people) convinced that homeownership will be forever out of reach unless they settle for a property that’s wrong for them. What those people may not realise, however, is that there is another way… self building.

While many may be put off by the huge and ostentatious self build projects featured on TV programs like Grand Designs, the simple truth is that self building is a perfectly viable option for many Brits who are frustrated by the stagnation of our property market. In fact, over 13,000 people decide to build their own house, every year. It’s a prospect that appeals to people from a variety of backgrounds. It’s as appealing to young couples keen to get a foot on the ladder to retirees looking to downsize, or even experienced builders looking for the perfect project. From steel-made Armstrong pole barn homes to tiny one-bedroom cottages, self build properties are a viable option for virtually any budget and taste.

Complete customisation

Everyone wants to make their home their own, but self building enables you to do this literally from the ground up. With developed homes, we pretty much have to get what we’re given, but a self build allows us to construct a home that’s uniquely suited to our sense of style, personal taste and family priorities. You’re liberated from the ‘one size fits all’ mentality that developers are, by necessity, have to adopt and can develop something that reflects you. You can also build to reflect impending changes in circumstances. If you’ve always wanted a walk-in wardrobe… You’ve got one, but if you have a baby on the way you can ensure that they spend their early years in a nursery that’s designed specifically for them.

mortgageCheaper than you may think!

If you’ve ever seen a property show then you’ll know the drama that occurs when a self build goes over budget, but don’t let this put you off. These often lavish designs face a very different set of circumstances and challenges to the average self build. Unlike a property developer, who has to account for a projected profit margin, you’ll be able to get significantly more for your money. It’s one of the few arenas in which bespoke offers better value than pre-fabricated.

What’s more, you’ll likely pay significantly less in Stamp Duty Land Tax as taxation will only be due on the plot of land and not the property itself. You’ll also make significant savings on VAT. New build homes are zero-rated for VAT meaning that you won’t have to pay a penny of the tax on your labour costs. Compare that to a standard renovation and you’ll see how much more you’d be getting for your money.

{ 0 comments }

Things To Consider So Buying A New Car Makes Financial Sense

by Magical Penny on July 26, 2017

The lure of buying a modern car can be all too great because the technology of most manufacturers has evolved so far.

There may be some that saying buying a brand spanking new car is insane, because a couple of models down the series line, is a car that can fulfil your every need. While there is some truth to that proposition, sometimes needs outweigh the slight hindrances. Indeed modern cars are going to demand a certain price, even for the entry models, but modern manufacturing trends have prolonged the life of each machine substantially. Looks, speed and tCarhe feeling a new car will give you aside, another important aspect of buying a new car is whether it makes financial sense or not.

 

Budgeting your purchase

Before you think of going for a test drive in a car you’re interested in, work out how much you’re willing to spend on a car. Do you personally have enough money to buy the vehicle, or are you going to seek financial assistance in the form of a loan to so? Although a budget may be a form of simple calculations, remember that it’s a blueprint for how much financial strength you have behind this purchase. Factor in unexpected bills and routine maintenance because although modern cars don’t break down like models from previous decades, the cost of repairs may be high.

Keep safety in mind

Think carefully before you make a short list of the vehicles you may potentially buy. It’s important to physically interact with the car before even setting off on a test drive. Consult your family because if you have drive a lot with your children present, the child seats may not be compatible and up to industry standards. Defective design can lead you to need Houston Law Firm for a car accident that hurts your children. Safety should be the bar, placed above all else because if the seat belt is positioned an unorthodox position, children in child-seats can be injured under heavy braking. Manufacturers have often had to recall cars because they didn’t design a child-safe environment, so be prepared and choose wisely when it comes to rear seat safety.

You need to make sure you've covered with breakdown coverageReliability gives longevity of life

The lifetime cost of owning a car stacks up due to the challenges you throw at it, in everyday use. Reliability should be high on your checklist of things to ensure before signing the dotted line. A cool, sleek design and fast accelerating engine, doesn’t mean you the manufacturing standard has been high; the same with slow, blocky family cars. The key things to notice in the latest models is the miles per gallon the car offers.

A car with a balance of adequate power and high MPG means the engine has been extensively tested, and geared toward working for long periods of time without fault. Equally, the materials that have been used in the production such as high-quality steel or refined iron is noteworthy. You should check the customer reviews on website that sell used cars to figure out what kind of pattern leaps out, regarding malfunctions. There are also car magazines and websites that review the latest models, giving you a better picture of the hiccups and flaws of the car.

 

{ 0 comments }

What To Consider First Before Choosing A Health Care Insurance Plan

by Magical Penny on July 25, 2017

three-fingersChoosing the right health care insurance involves a lot of analysing of your health, the lifestyle you lead and what your future plans are. It’s never been an easy process and can at times be a bit morbid, but contemplating a serious injury is something you must do to make the best choice. Laws and legal obligations always change, which makes things more complicated but, besides from the national health care statute that are the parameters of all else, an insurance plan is purely for an individual. Sorting through the many health insurance companies is quite frankly, too large of a task. You must boil it down to what type of coverage you want, which washes away the irrelevant extras and streamlines a plan to your lifestyle and current medical condition. The specifics of an insurance plan may need to be bartered, so before you contact a potential insurance company, come prepared with the right questions and queries.

Here are 3 considerations to get your started.

1. Act inside budgetary constraints

Sizing up the cost is going to be the largest challenge ahead, but in truth, even this can be made simple. Ask yourself if health insurance is really for you because you can only act in the boundaries which are financially possible. The choices you have for an insurance plan are immediately narrowed and focused on a number of funds you have, available to pay for the care. Depending on how much money you have saved and are ready to depart with, you can either get the basic amount of options, or an intricate and entirely bespoke insurance plan. The bottom line is you must draw up a budget before you go to the marketplace to see what’s on offer.

 

2. The liabilities

A health insurance plan is subject to the company that provides it, so although companies may use the same terminology, you should check what the liabilities are. If you are involved in an accident through no fault of your own, the costs may be entirely picked up by your insurance plan. If you are the one who has caused the accident and the authorities have decided as such, some companies demand you pay an out-of-pocket surcharge. If you suffer medical malpractice by the hands of a hospital employee, often times you’re on your own, and insurance companies see no obligation to step in and cover the charges of corrective measures. In which case you will need the help of a private legal service to point out incorrect procedures or low standards that caused your additional pain. If you’re unable to afford the additional operations or prescriptions, going to court to recuperate money to pay for the bills is many times the only way.

 

3. Keeping your doctor

Over the years or months, many people build a relationship with their doctor. They slowly become a friendly and most importantly, a trusted face. If a doctor knows your medical history like the back of their hand, you’re mostly going to want to keep them as your doctor. However, some insurance plans don’t allow you to select your favourite doctor, physician or other specialists as part of your provider network. Either the costs may be too high, or the medical practitioner is not on their certified list. If this is important for you, as an emotional connection is to some, make sure your insurance plan can allow this before finalising anything.

 

{ 0 comments }

Learning About Trading – An Introduction

by Magical Penny on July 20, 2017

financial newsWhen it comes to investing in markets, there are long-term and short-term approaches.
Long term investing is typically defined as investing for 5 years or longer and investors (try to) ignore the ups and downs of the markets believing that over time the values of their investments will trend upwards.
Short term investing is much more fast paced and rather than ignoring the ups and downs, known as volatility, investors attempt to profit from the fluctations.
Both types of investors attempt to follow the adage ‘Buy low, sell high’, but the timelines are vastly different.
Investors hoping to profit from the rise and fall of markets often make a lot of frequent trades and therefore are called traders, and their activity is known as trading. A lot of money can be made trading if you do it right, and in a much shorter time frame than the long term investors who buy and hold investments over multiple years and decades. In contrast, traders tend of hold onto their investments for only a few days, hours, or even minutes and seconds! Holding an investment overnight is sometimes considered to be ‘long term’ for some traders!

investingSo should you get into trading?

Trading has become a lot more accessable in recent years with the rise of the internet, and more recently still, smartphones and trading platform apps such as Alvexo. No longer do traders need to be tied to their desks. Traders now can make money in the markets whereever they can get decent phone reception, including on the bus or even the beach.

But just because you can doesn’t mean you should.

Traders need to understand what shares and securities they are trading and become familiar with the markets before they start putting large sums in. With electronic trading through electronc communication networks (ECNs) its quicker than ever to make a trade, and speed can lead both quick profits and costly mistakes.
As well as trading with your own money, some trading platforms allow you to invest ‘on margin’ meaning they lend you money to invest. This can increase your profits but can also mean you could be forced to put more money into the trade to keep it open should the value go down. If you don’t have more money to put into the trade, the trade could be closed i.e. be forced to sell, crystalising the loss without the oportunity to let the investment grow back to the level you started with. But if the trade goes your way, it’s a powerful money-maker. Trading on margin ultimately magnifies your trading results, good or bad.

Contracts for Difference

A popular way to trade is through a service called Contract for Difference, known as CFD Trading.
Introduced first in the UK, these tradable instruments change in value in line with the underlying assets they represent. You don’t own the actual investments directly and it’s easier to get into leveraged trading this way. For example one provider, Alvexo, offers CFD trading with a leverage of 10 to 1. So £10 can get you £100 worth of underlying shares. If the price of the £100 worth of shares went up 5% over the day or even the hour or minute, and you then sold out of the trade, you would get £5 plus your intial £10 investment. That’s a 50% return on a 5% price movement. You can therefore see how quickly profits can build up.
If you do decide to start trading make sure you learn about trading, are diciplined with how much you are willing to put in, and follow the golden rules of trading . And whilst it can be fun and profitable, make sure you are also doing long-term investing and have a sufficient cash-based emergency fund for your own financial security.

{ 0 comments }

Venture Into The Wonderful World Of Contracting

by Magical Penny on July 18, 2017

Stepping into the world of contracting can be daunting, exciting and scary.

You have decided that you’ve had enough of being employed by somebody else only to see a huge chunk of your earnings making their way to the tax man. Your contracting colleagues are encouraging you to go for it, to relinquish the security of permanent reaching the summitemployment and to become your own boss. The financial rewards are plentiful, but there is always something niggling at the back of your mind preventing you from taking the plunge. The onus is now on you to sort out all of your financial affairs from PAYE to VAT and from corporation tax to indemnity insurance. The task to set yourself up ready to become a contractor can seem huge, but it can be done. In fact, thousands of people across the UK are enjoying the freedom of setting up their own limited companies and contracting. Could it be time that you did the same?

 

On Your Own

As a contractor, you are branching out on your own using your IT, business or technical knowledge to work with companies for a set length of time to complete a specific project. Once the project is completed, you then move on to the next company. The work is varied, and the financial gain can be phenomenal, earning up to £800 a day. But how do you manage this money on your own? It’s vital that you source an accountant that specialises in working with contractors. These people understand the intricacies of financial regulations and are always clued up on the latest legislation. These specialist accountants will help you to set up your limited company and sort out your taxes, VAT and set up your company bank account.

If you choose to go it alone and use Google as your only source of information when venturing down the path to contracting, you may be in for some nasty surprises. Put bluntly, you are risking too much professionally and personally. Even though it may be a novice mistake, if you don’t pay your VAT on time or don’t pay up enough for your corporation tax, this may be a red flag to the HMRC, and you may find yourself under a tax investigation. At this point, you will need the help of a specialist tax firm that can represent you and defend your position to resolve any tax disputes. An investigation into any part of your business is stressful, can affect your health and prevent you from working, so it’s vital to get the professionals on board.

The list of tasks that you need to do before you begin to contract can be bewildering. You’ll need insurances, a company bank account, a registered business address, and you need access to some intuitive and accurate accounting software. Many of these tasks can be fulfilled by an accountant for a monthly fee. Others do require some research on your part, and if you scout out the right deal, you can further enhance the financial benefits of contracting.

moneyYou may have heard the phrase IR35 bandied about when it comes to contracting. This is the UK government’s fine line between applying a tax status to a role that constitutes a full-time employee or a contractor. This is where your specialist accountant will earn his or her fees. They will ensure that you never fall into the trap of working with a company on a contracting basis only to find that your contract does not fulfil the IR35 criteria. You don’t want to find yourself being taxed as a full-time employee and not enjoying the financial benefits that contracting brings with it.

Contracting is a Mindset

Get it right and contracting can be relatively stress-free and can see you develop an exceptional CV. Contracting is a mindset. There will be times when you are out of work or ‘on the bench’ but this could be time that you spend gaining another qualification, doing some voluntary work or travelling. Many contractors find themselves falling into a routine of working nine months of the year, with three months spent doing other things such as hobbies or spending time with family. The world of contracting offers a great deal of flexibility and freedom. However, some people thrive on routine and stability. You’ll never know until you try. If you find that contracting isn’t for you and that you prefer the security of a permanent role, you can always slip back into the world of full-time employment. Do your research and look into the contracting job market where you are based in the UK. If it is currently buoyant, there may never be a better time to dip your toes into the wonderful world of contracting.

 

{ 0 comments }

How To Protect Your Property From A Crash

by Magical Penny on July 18, 2017

The property market is in a regular zig zag of ups and downs regarding value. Many home owners hold concerns over whether their home or investment property will devalue over time. There are many ways to ensure your property is safe guarded so it does not drop in value during the next property fall. However, many people are still not aware of these. Have a look at some of these tips to ensure your property is protected from being undervalued during a property crash in your area.

british pound notesDeposit

This may sound obvious, but to ensure you don’t lose money on your property, or not overpaying on your mortgage it is best to put a deposit larger than the standard 10%. Avoid opting in for a zero deposit plan, because in the long run, you may end up paying a lot more than you would for other properties in your area.

Buy for the Long-Term

If you don’t plan on keeping the house for more than five years, don’t buy it. It often takes anywhere between 5-10 years for your property’s worth to rise. If you sell within the first five years of purchase, you could be losing money rather than gaining capital. To get the most out of your investment, consider holding onto it for over five years. For further growth in the price, you may even want to consider renovations. This will see the value of your home rise further. If you are unsure about your investment options, you may want to consider booking an appointment with a property investment company to chat about your options.

house questionLocation

Consider where you’re buying and when you buy. If the area you are considering purchasing a property in has high crime rates, you may want to consider another location. The top things to look for when you buy a home is whether there is a lot of young families around, crime rates, distance and access to schools, shops and public transport. Being in an area with a lot of young families suggests growth in the area, while the lack of crime rates ensures more security in your home. The distance and access to facilities help with driving up your property’s value when you choose to sell.

Tenants

If renting your property out, ensure you choose the perfect tenants. Young families are always an excellent choice, as they respect the home and treat it as it were their own. Although university students can be good tenants, they may also be a risk if you are looking for someone to respect your neighbours. If you are looking for long term tenants, young families are the best option for yours and your property’s security.

Regardless of whether you are purchasing a home as an investment or as a place to live in, there are many factors to consider to ensure your property does not crash and you lose in the long term. Providing a higher deposit is paid, you are buying for the long term in a decent location and the selection of tenants if you decide to rent will all have an impact on your properties value. Hopefully, with these tips, you will be more knowledgeable, and the purchase of your home will be easier.

{ 0 comments }

Strategies For A Positive Buyer-Estate Agent Relationship

by Magical Penny on July 14, 2017

 

Estate agents have a nasty trick, one which is established as a technique to try and increase their commission.

If you tell them that you have £200,000 to spend, they will show you houses that are £250,000. It’s a trick that’s designed to make you fall in love with the more expensive houses and thus find extra wriggle room in your budget to allow you to afford them.

It’s one that we’re all liable to fall for, too. After all, we want to have the best home we can possibly buy – and if the price difference isn’t that great, it can be tempting to make an offer and see what happens. Of course, this is the quickstamp duty change 2016est route imaginable to overspending and over-committing your family finances – and the consequences could last for the next 30 years.

Rather than falling into this trap, you just need to develop a few ways of thinking smart when it comes to making your budget stretch. With the help of a skilled company like Joe Manausa Real Estate, you should be able to figure out a way to work together rather than against one another.

1) Be Firm On Your Price

If you have set a budget, then that budget needs to be absolute. Set a high ceiling limit and tell your estate agent your budget is around 10% beneath that, but keep your actual budget in your mind. If you’re offered properties that bust both levels of your budget, outright reject them and refuse to see them. The price should be the first thing you ask before you even look at the details of a house, never mind go and view it.

2) Be Friendly

If you want the inside track on new, great properties on the market, then you need to develop a good relationship with your estate agent. Be friendly and personable, though don’t let it cross the line to being too amiable and persuaded towards properties that are out of your budget. You can even express regret at your budget being as it is, saying you know it’ll impact their commission but you hope you can find something with them anyway.

3) Stay In Touch

If you sit at home with your house sold and just waiting for the perfect property to fall into your lap, it’s not going to happen. Keep in touch with your estate agent by way of phone or email, asking if there’s any new tips or just checking to see if any properties have had prices lowered recently. Taking a few cupcakes into their office won’t go amiss either – anything to keep you on their good siflexibility in savingsde and encourage them to go the extra mile for you will help!

4) Have Some Flexibility

Most estate agents need you to have some flexibility. If you’re going to be rigid on price (as you should be), then you need to give them alternate ways to look for alternative options. For example, you could be open to losing a bedroom or forgoing a particular area – anything that shows you’re not being picky for the sake of it, and you’re willing to compromise to find the right deal.

{ 0 comments }

Cryptocurrency 101: Why All Investors Should Give It Another Look

by Magical Penny on July 10, 2017

bitcoinCryptocurrency is a hot topic in the investment world these days for good reason. Some people have managed to make millions buying and selling the decentralized digital money all over the world. Today, we’re going to discuss just some of the reasons why all investors need to take another look at the marketplace. If you aren’t putting your money in cryptocurrency at the moment, you might be missing a trick. That is especially the case if you already invest in other currency markets. With a bit of luck, by the time to leave this page, you will have a better idea of all the benefits.

Cryptocurrency can increase in value fast

There is no getting away from the fact that some cryptocurrencies have grown in value by thousands of percent during only a few years. That means anyone who chooses to get Bitcoin with a credit card today could see a significant profit during the next couple of years. However, it’s important to note that there are many other cryptocurrencies available online these days. That means you shouldn’t always opt for the most popular or well-known. Other currencies like Litecoin or Ripple are doing well at the moment. The basic rule of thumb is that you just need to perform a lot of research before you spend any money – and be prepared for a lot of volatility!

Cryptocurrency is versatile

Compared to other available currencies, cryptocurrency is considerably more versatile. Indeed, you can spend it in hundreds of different ways online. There are also lots of websites where you can buy and sell. So, it’s easy to make investments and cash in when the time is right. Business owners around the world have also become interested in the currency during the last few years. That means more entrepreneurs than ever before have begun to use it within their operations. As the popularity grows, that trend will continue, and it will become even easier to make money.

Cryptocurrency trades can be anonymous

Anonymity can become important to some investors when trading in currencies. That is especially the case if the investment could be considered a conflict of interest. There are many ways in which anyone can buy or sell cryptocurrencies under the radar. Indeed, there are many websites on the deep web that offer that service. Using the Tor browser should assist in ensuring the trades aren’t tracked by any government or authority. We’re not saying you can get away without paying tax on your profits, but it is possible to hide your actions somewhat.

 

As you can see from the information on this page, making a killing with cryptocurrency is easier than most people imagine. So, why spend your time trying investment ideas that will never produce the same level of profit? Take another look at cryptocurrencies today and work out if you should take a risk with the market. Thousands of other investors are doing that already with excellent results. There is a lot of risk and volatility involved but the potential to gain is there too. Jump on the bandwagon today and see if you can follow in their footsteps.

{ 0 comments }

When Debt Spirals out of Control…

by Magical Penny on July 6, 2017

cautionDebt is something that no one wants to experience, yet the reality is that most of us will at some point. Not all debt is bad either: consider a student loan as a prime example. But, having full control of your debt and managing it effectively is important. This all begins with educating yourself, which is why we put this post together. Below, we will take a look at the key signs that your debt is spiraling out of control, as well as providing a number of reasons for this happening. Hopefully, it will give you the knowledge you need to avoid such a scenario occurring.

Warning signs that your debt is spiraling out of control:

  • You have become depressed or extremely stressed – Worrying about money from time-to-time is normal, but if you are always in fear of creditors hounding you, this is a clear sign that things have gone too far. If you are not able to function or eat properly, you keep arguing with your partner over finances, or you are ignoring collection phone calls, you need to face up to the fact that you have lost control over money matters.
  • You are spending more than you can afford – If you are not conscious of your debt-to-income ratio and you don’t budget, it is very easy to overextend yourself. Work out how much incomings and outgoings you have per month. If you are spending more than what you have, it is time for change.
  • Your debt is always on the increase – If the amount of money that you owe keeps increasing every month, not only due to added purchases, but also because of interest and late payment charges, you are definitely heading down the wrong path. You need to ensure your debts are only getting smaller and smaller every month to stabilize your expenses.
  • You use your credit card to pay for everything – Do you find yourself using your credit card to pay for everything from your bills, to fuel, to food? If so, this indicates you are living way beyond your means.
  • You are only meeting the minimum payment amount on money owed – Of course, if you can’t even pay the minimum, then you definitely have to face up to the issue of debt. Moreover, paying the lowest amount possible every month enables the creditor to charge penalties and interest fees. It can take years to pay off your debt when this starts to happen. Plus, you can end up paying double the amount of your initial debt due to the interest accrued becoming so high.
  • You don’t know how much you owe – This is one of the clear signs that debt is a problem that needs to be addressed. Financially savvy people always know how much money they owe, and they make certain that they budget their expenses so that they have enough money available. If you do not keep track of what you spend and you have no idea what your current balance is, you could be in for a nasty surprise.

What are the main causes of debt?

There are many reasons why people end up in debt, and in some circumstances it is unavoidable. However, there are many cases whereby debt could have been prevented. Let’s take a look in further detail:

Underemployment

Underemployment can feel like a relief to those that have been without a job for a while. Or, if your hours have been cut, it can feel like it is just a temporary situation. When it lasts longer than anticipated, it eats into the money you do have, as you aren’t bringing as much in.

Poor money management

There is no denying that one of the main reasons people end up in a cycle of debt is because they do not manage their money effectively. It is important to put together a monthly spending plan. Without one, you will not have any idea where your money is going. You could be spending hundreds of pounds each month unnecessarily. All you need to do is write down your income and your expenses and reconcile the two – it really is that simple. It will give you greater clarity over what you have, enabling you to make sensible decisions with your money.

Borrowing money irresponsibly

It is very risky to borrow money without conducting the necessary research or ensuring the terms are right for your situation. Most people will take advantage of a loan at some point in their life. This can be a great way to move up the property ladder or to help you get out of a sticky situation. However, you do need to ensure the loan is right for you and that you can make the repayments. Payday loans provided by the likes of Payday Loans Net are short-term loans of a small amount. They are designed to help you deal with those immediate tricky financial situations, for example, an unexpected car repair bill. There is no point in taking out a large bank loan for such a scenario. Don’t borrow more than you need and ensure the terms are favourable in regards to your situation.

divorce split moneyDivorce

Anyone with experience will know that divorce is one of the most expensive things you can go through. Unfortunately, in some cases, an expense divorce is unavoidable, especially if your ex-partner is being difficult.

Reduced income/same expenses

Many people end up with a debt gap once their income has been reduced. No matter whether you are on unpaid leave or you have had your hours reduced, it is important to bring your expenses in line with your earnings, no matter whether it is a temporary or permanent scenario.

Financial illiteracy

A lot of people do not understand how money works. They don’t know how to invest and save for a rainy day. They don’t know why it is important to balance their cheque book. Why should they? No one has ever told them before! Schools don’t often teach the ins and outs of managing your own money. One of the best ways to gain control of your finances is to get educated.

Spending tomorrow’s money today

Banking on a windfall is very, very risky. What if tomorrow’s money never comes? Then, what will you do? Don’t spend the money until it is cleared and in your bank.

british pound notesA lack of communication

If your finances are linked to someone else, i.e. a partner or the rest of your family, communication is imperative. Debt can easily arise when there are no lines of communication and people do not discuss spending styles and financial goals. In most marriages, there is one spender and one saver. If you are the latter, you need to map out a strategy for both of you to use so that you can get what you want.

Not saving enough

Having an emergency fund for a rainy day is of vital importance. One of the best ways to protect yourself from debt is to prepare for unexpected expenditures. You should try to save up between six and three months of living expenses. This will give you a good cushion should something go wrong.

Medical expenses

Last but not least, another reason for debt is medical expenses. Of course, we are lucky enough to have the NHS in the UK. However, a lot of people find themselves in debt when they fall ill abroad because they have not taken out the necessary insurance. Travel and/or medical insurance is so important, and you need to check the coverage to ensure it is right for you, offering the best degree of protection.

 

{ 0 comments }

Could You Pay Off Your Mortgage Early?

by Magical Penny on June 30, 2017

stamp duty change 2016The idea of living a mortgage-free life is part of the dream for many people, albeit one that might be far in the future. You imagine a sun-kissed retirement where you don’t have to worry about finding the money for rent or mortgage payments; where you have more disposable income as a result than you know what to do with. It’s a lovely idea to consider but, alas, for most people it’s one that will take many years of hard word to achieve.

However… maybe not. There is a school of thought among the financially savvy which suggests that everyone should aim to pay off their mortgage as quickly as possible. Not only will this save a fortune in interest payments, but it could give you a bedrock of financial security far earlier than you ever expected.

If you’re tempted to explore the idea further, then there’s a few things you’re going to need to know.

#1 – You Have To Be Certain Of Your Property

 

f you’re going to be taking big steps to try and pay off your mortgage early, then you need to be sure you’re getting a good deal.

Hopefully you conducted a survey prior to buying a house, but realistically, you probably didn’t: a shocking four-in-five buyers admitted to http://www.thisismoney.co.uk/ that they had bought their home without a survey.

Well, there’s no point crying over spilled milk – if you didn’t get a survey, you didn’t get one. If you’re going to take the steps required to pay off a mortgage early, however, then you need to get one now. You need to consult a construction expert and then the likes of http://www.argyllenvironmental.co.uk to ensure that the land your house sits on is in good condition.

Why do this? It’s simple: you don’t want to go to the effort of paying off your mortgage, only to discover it’s not worth as much as you paid for it. So get the surveys and the all clear before you proceed to the next step.

#2 – You Have To Be Committed

 

If you want to pay your mortgage off substantially early, then you have to be completely and absolutely ready to sacrifice a lot to do so. There’s very little point in paying your mortgage off a year or two early; it won’t make that much of a difference.

You should be aiming to shave at least five years off the repayment time; some people are even more ambitious, and aim for 10 years. It all depends on how your income relates to the size of the mortgage that you have and what you can realistically afford. For example, there’s no point trying to pay off a mortgage of £400,000 in 10 years if you only earn £20,000 per year – that’s just never going to work!

The commitment required to make a substantial difference is big. It means going without holidays, going without the most expensive luxuries in life – tightening belts and being careful with every penny you earn and how you spend it. Can you handle that?

Not only now, but can you handle that in a year’s time? How about five years? Scrimping and saving for a better financial future takes a lot of effort, so don’t begin until you’re sure you’re ready for all it’s going to take.

#3 – Is There A Penalty For Doing So?

 

If you want to pay off your mortgage to save yourself money on interest costs, then that will work out very well for you. It won’t work out particularly well for your bank, though – they’re going to miss out on years of expected interest payments on their loan to you.

That’s why many mortgages will have a penalty if you pay the mortgage off early. Now, paying this might still be worth it for you – you’ll just have to talk to your mortgage advisor and ensure the figures line up to make it worth your while. Most of the time it will still be cheaper to pay the fee than to continue paying interest for the entirety of your mortgage term, but make sure you have calculated this in so you don’t have any unpleasant surprises.

So, do you think you could handle it? There’s no doubt there’s plenty of benefits to paying off your mortgage early. Just ensure that you have taken the right precautions at every stage and know what you are getting into. If you do that, then a glorious mortgage-free future could be yours sooner than you ever expected.

{ 0 comments }

← Previous Entries

Next Entries →