In “Mortgages, Money and Magic” I relay a plan where anyone on an average wage can pay off their mortgage within 10 years. As a mortgage (or rent for those who let) is one of life’s biggest costs it makes sense to shake off the debt as soon as possible. Once the mortgage has gone it could create the freedom in your life to:
Spend quality time with your family and friends.
Be more full of life as opposed to living Groundhog Day.
Follow opportunities that you wouldn’t have time for before.
Make a contribution to the world.
Take on a job which reflected your values or interests as opposed to being a wage slave.
For me, being Mortgage free would mean the end of the 9-5 routine. I could get up when I wanted, read the books I wanted to read, participate in hobbies, and most importantly spend time with my loved ones. Live would be for living!
However, there are still bills to pay when your mortgage is finished. There is still council tax and utility bills. Insurances and food. I have dealt separately with building residual income streams, but in this article I wanted to show that ending your job can actually free up cash. Look at it this way:
Commuting – by not working we no longer have to indulge in the tedious daily pursuit of commuting. The average distance traveled by UK workers is 8.5 miles to work making a round trip of 17 miles. At 15p a mile that makes the weekly petrol cost up to £12.75 or £55.25 per month. We should also take into account wear and tear, road tax, car insurance and parking. Therefore by giving up work you could save roughly £100 per month on traveling.
Work clothes – if you no longer work, or work from home there is nothing stopping you staying in your pyjama’s for the whole day. There’s no need to get a new suit every six months, makeup, fancy shoes, briefcases or even shaving foam! In total, another saving of at least £25 per month.
Meals – it’s hard to get away from shelling out at least a couple of quid on meals everyday but if your no longer in the rat race you’ll have had such a healthy breakfast you’ll no longer need the midday sugar rush.
Childcare – if you are no longer in full time work you’re going to make a saving in Child Care cost. Remember the Golden Rule with Kids – Presence is more important than presents. A day spent having fun with your kids is worth a million nights of coming home knackered and slumping in front of the TV, irritated by the children’s noise. £140 per month saved for those with kids.
Escape Costs – if you day is spent doing worthwhile and rewarding activities they’ll be less need to “treat yourself” with escapist activities such as boozing, meals out, cinema trips, ten pin bowling etc. We shall quantify this as a saving of £50 per month.
No more daily grind – we refer to work as the daily grind because that is exactly what it is. By avoiding it our health will naturally improve. When others are in their 1m x 1m cubicle you could be in the park with the kids, down at the sauna or hiking round your local hills. Which do you think is healthier? It’s hard to put a monetary value on your health but it’s obvious that savings are there to be made. Prescriptions and medicine are the obvious ones. Let’s average it out at £10 per month.
In “Mortgages, Money and Magic” I recommend avoiding Foreign Holidays as a means to making overpayments on your mortgage. This sacrifice is easier to make if you no longer have a 9-5 job – every day is a holiday! Save yourself £100 per month easy.
There are numerous over little savings that can be made too: reduced mobile phone bills, less mileage to Conferences etc, trade magazines no longer required, less need to buy raffle tickets/ sponsor workmates. The list goes on.
In summary if you need £1000 to live on when you are a worker; this could easily be reduced to about £750 when “work-related” costs are removed. Think about these when planning your future after your mortgage is paid off.
Wednesday 30 July 2008
Monday 28 July 2008
www.uncommonadvice.co.uk is proved right yet again!
A report released today by the National Housing Federation has put forward the view that the average house price in the UK will rise over the next 5 years by 25%. before you say it, this report was not drafted by council lefties but rather Oxford economists. They predict that house prices will fall by 2.1% in 2009 and then increase by 1.3% in 2010, 5.2% in 2011, 9.2% in 2012 and 9.3% in 2013.
The Chief Executive of the federation stated that, "..... despite concerns about the current market downturn, house prices will resume upwards". All markets abide by the rules of supply and demand, so lets look at the basics:
The Chief Executive of the federation stated that, "..... despite concerns about the current market downturn, house prices will resume upwards". All markets abide by the rules of supply and demand, so lets look at the basics:
- the total number of new homes expected to be completed in 2008 is likely to be 120,000 against a government target of 200,000.
- one in every 4 local authority areas has seen its housing list double but the slowdown in newbuilds means that there is less public housing coming on stream.
- 1.5million people in the UK live in an overcrowded house.
- 73,360 households are officially homeless.
Mark my words 2008 is going to be remembered as a blip in an otherwise upwards house price trajectory. Therefore, it is of vital importance for First Time Buyers to act now - especially in the areas where it is still possible to get a 3 bedroom property with parking for less than £125,000; namely, the North East, the North West, the East Midlands and the West Midlands.
The fundamentals are still in place. It is simply the case that a herd mentality has spread across the country. Don't wait to buy property - buy property then wait! Mark my words
Pay off your Mortgage in 10 years - avoid the 7 Deadly Sins!
It’s amazing how many of the new ideas and theory’s that come out are simply a rehash of previous doctrines. Look at the Law of Attraction – and then compare it to ideas set out in the bible 2000 years ago, “ask and it shall be given unto you, seek and ye shall find”. In “Mortgages, Money and Magic” I set out a plan as to how any average couple can buy a property without requiring a deposit and then go on to own that property outright within 10 years. Obviously you can’t make an omelette without breaking some eggs. Sacrifices have to be made. Here I will look at the 7 main sacrifices as they relate to the 7 deadly sins.
Envy – When someone buys themselves a new car or a new holiday you are going to be jealous. You have to realise though that you don’t need material things to make yourself feel better. The person with the new car has probably dug themselves deeper into debt to get the short lived buzz of having something new. Think of the car, the holiday or anything else that will be available to you when the millstone of a mortgage is taken off your neck. Sacrifice getting a new car – stick to secondhand.
Pride – It’s good to support your team, but with the average in the Premiership season ticket at £615 it’s not cheap. Try to achieve value for money in everything you do. Learn to do without. I can guarantee you that going to football matches is something that can quite easily be substituted for other less expensive pastimes. Sacrifice going to the Football.
Sloth – You get nothing for nothing. In order to pay off your mortgage within a decade it is necessary to get off your bottom and actually earn some cash. The beauty of my plan however is that I can show you how to do it without being a city whiz kind. An “average” job paying £22,000 to £26,000 would be sufficient. If necessary sacrifice evenings and weekends now so that your mortgage is paid off by the time you reach middle age. You’ll have more time than ever when your mortgage is paid off whilst your contemporaries are still struggling.
Greed – it’s never good to have too much of something so make your money compartmentalized. You should have a fund for repairs, a fund for food, a fund for clothes etc. By separating your cash out it makes it much harder to get greedy. All greed is ultimately self-destructive but make sure you sacrifice the worst source of greed – alcohol.
Wrath – Don’t get angry when someone lights up next to you, think of the money they are burning away when they buy that packet of ciggies – and feel safe in the knowledge that you will be mortgage free whilst they are literally burning cash daily. Sacrifice the fags.
Gluttony – there is no need to be a glutton with takeaway after takeaway when it is possible to eat like a king for 50p a night. Get creative in the kitchen and your wallet AND waistline will benefit.
Lust – having a sex drive can be the impetus for a lot of good change in your life, but draw the line when the lust inside you means you are throwing money down the pan. Make sure you embark on this plan with the person you intend to be with for the duration. Sacrifice the casual relationships.
In summary, without winning the lottery or having a massive life insurance payout, paying off your mortgage within 10 years is going to take many sacrifices. Deep down we know that these sacrifices are for the best because the Seven Deadly sins are all instinctive. They are innate. To achieve the goal you must: sacrifice the new car; sacrifice the foreign holiday; bring in at least an average wage; sacrifice cigarettes and alcohol; sacrifice the takeaways and sacrifice the casual sex.
If you have the strength of character to achieve this then you are well on the way to being able to pay your mortgage off in a decade.
Envy – When someone buys themselves a new car or a new holiday you are going to be jealous. You have to realise though that you don’t need material things to make yourself feel better. The person with the new car has probably dug themselves deeper into debt to get the short lived buzz of having something new. Think of the car, the holiday or anything else that will be available to you when the millstone of a mortgage is taken off your neck. Sacrifice getting a new car – stick to secondhand.
Pride – It’s good to support your team, but with the average in the Premiership season ticket at £615 it’s not cheap. Try to achieve value for money in everything you do. Learn to do without. I can guarantee you that going to football matches is something that can quite easily be substituted for other less expensive pastimes. Sacrifice going to the Football.
Sloth – You get nothing for nothing. In order to pay off your mortgage within a decade it is necessary to get off your bottom and actually earn some cash. The beauty of my plan however is that I can show you how to do it without being a city whiz kind. An “average” job paying £22,000 to £26,000 would be sufficient. If necessary sacrifice evenings and weekends now so that your mortgage is paid off by the time you reach middle age. You’ll have more time than ever when your mortgage is paid off whilst your contemporaries are still struggling.
Greed – it’s never good to have too much of something so make your money compartmentalized. You should have a fund for repairs, a fund for food, a fund for clothes etc. By separating your cash out it makes it much harder to get greedy. All greed is ultimately self-destructive but make sure you sacrifice the worst source of greed – alcohol.
Wrath – Don’t get angry when someone lights up next to you, think of the money they are burning away when they buy that packet of ciggies – and feel safe in the knowledge that you will be mortgage free whilst they are literally burning cash daily. Sacrifice the fags.
Gluttony – there is no need to be a glutton with takeaway after takeaway when it is possible to eat like a king for 50p a night. Get creative in the kitchen and your wallet AND waistline will benefit.
Lust – having a sex drive can be the impetus for a lot of good change in your life, but draw the line when the lust inside you means you are throwing money down the pan. Make sure you embark on this plan with the person you intend to be with for the duration. Sacrifice the casual relationships.
In summary, without winning the lottery or having a massive life insurance payout, paying off your mortgage within 10 years is going to take many sacrifices. Deep down we know that these sacrifices are for the best because the Seven Deadly sins are all instinctive. They are innate. To achieve the goal you must: sacrifice the new car; sacrifice the foreign holiday; bring in at least an average wage; sacrifice cigarettes and alcohol; sacrifice the takeaways and sacrifice the casual sex.
If you have the strength of character to achieve this then you are well on the way to being able to pay your mortgage off in a decade.
Sunday 27 July 2008
Never rent! There are easy rules to follow to find your perfect house!
You can’t get rich renting. You can’t get rich renting. You can’t get rich renting.
If you rent for a lifetime then you will spend hundreds of thousands of pounds and end up exactly where you started – owning nothing. If you buy a house and pay down your mortgage you will eventually own a tangible asset. Unfortunately for us, Houses aren’t available for £99 down at your local IKEA. Most of us are going to need to take on debt in the form of a mortgage in order to make a house purchase. At the moment, due to the Credit Crunch, many people are seeing renting as a better alternative to taking on a mortgage, and who could blame them? Mortgage rates are the highest they have been for decades, large deposits are required – and what for? The house you buy is likely to be worth a lot less this time next year. Remember though that you can’t get rich renting! So how do you work your way through the maze and decide how much of a house is enough? Here are the easy rules I would follow:
· Visit www.rightmove.co.uk
· Search for properties for sale in your town.
· In the search filters only look at resale houses with 3 bedrooms and display with lowest prices first.
· Ignore properties in the worst two areas of town.
· Write down the first 3 properties you come across which are available with Off Road Parking.
· View all 3. Offer the same amount of money on all 3 (at least 10% less than list price). Work upwards until the first acceptance.
I recommend offering the same on all three houses because this is not a beauty contest. From the outset I would make my intentions clear to the Estate Agent. I would say something like, “I am interested not only in this property you have to offer Mr Estate Agent, but also another two with your competitors. I have no particular favourite – I just want one of them at the cheapest price possible”. I guarantee you that as soon as the Estate Agent knows that you are also looking elsewhere they will redouble their negotiation efforts with the vendor. If two agents come back at the same price then pick the one you prefer – thinking long term.
I guarantee you that in three quarters of the UK you will find a property available that fits within the above criteria at under £125,000.
Have a look at www.uncommonadvice.co.uk to find out how you can then go on to purchase that property and pay the mortgage off within 10 years.
If you rent for a lifetime then you will spend hundreds of thousands of pounds and end up exactly where you started – owning nothing. If you buy a house and pay down your mortgage you will eventually own a tangible asset. Unfortunately for us, Houses aren’t available for £99 down at your local IKEA. Most of us are going to need to take on debt in the form of a mortgage in order to make a house purchase. At the moment, due to the Credit Crunch, many people are seeing renting as a better alternative to taking on a mortgage, and who could blame them? Mortgage rates are the highest they have been for decades, large deposits are required – and what for? The house you buy is likely to be worth a lot less this time next year. Remember though that you can’t get rich renting! So how do you work your way through the maze and decide how much of a house is enough? Here are the easy rules I would follow:
· Visit www.rightmove.co.uk
· Search for properties for sale in your town.
· In the search filters only look at resale houses with 3 bedrooms and display with lowest prices first.
· Ignore properties in the worst two areas of town.
· Write down the first 3 properties you come across which are available with Off Road Parking.
· View all 3. Offer the same amount of money on all 3 (at least 10% less than list price). Work upwards until the first acceptance.
I recommend offering the same on all three houses because this is not a beauty contest. From the outset I would make my intentions clear to the Estate Agent. I would say something like, “I am interested not only in this property you have to offer Mr Estate Agent, but also another two with your competitors. I have no particular favourite – I just want one of them at the cheapest price possible”. I guarantee you that as soon as the Estate Agent knows that you are also looking elsewhere they will redouble their negotiation efforts with the vendor. If two agents come back at the same price then pick the one you prefer – thinking long term.
I guarantee you that in three quarters of the UK you will find a property available that fits within the above criteria at under £125,000.
Have a look at www.uncommonadvice.co.uk to find out how you can then go on to purchase that property and pay the mortgage off within 10 years.
Friday 25 July 2008
4 Reasons why real Property Investors need to wake up NOW!
Throughout history it is amazing to note that many, many millionaires have made their fortunes whilst others are mumping around complaing about their misfortunes and generally whining baout the economy. The best example I can think of is Joe kennedy (the father of John F. Kennedy) who was one of the only men to come out of the Stock Market Crash of 1929 smelling of roses. These men of steel show repetitive traits - they have a plan and they stick to it. They stay calm whilst all around them people are losing their heads. We should adapt these traits to the current UK housing situation. If you are an investor then now is actually the best time to be in the game for a long time. Look at the current opportunities and fomulate a strategy around them:
1. Repossession rates are going through the roof! All over the UK people are facing rate shock as they come off their fixed rates. The increased monthly payments lead to arrears. Elsewhere, increased costs at the fuel pumps, and higher expenses at the checkout are pushing more and more pressure onto the family purse. For some, this undoubtably leads to breaking point. Repo's are now running at almost the highest rate since records began. Although unfortunate for those concerned, the flood of cheap properties onto the market makes it Christmas Day for the Professional Investor.
2. Less competiton. Two summers ago a competitively priced house coming onto the market in a readily lettable area would have created a furore. Investors would be heading down to the Estate Agents like a flock of geese. Now the same property would hardly raise an eyebrow even with a For Sale board up, an editorial in the local rag, a highlighted position on Rightmove, 500 mailings and 50 call outs. No-one is buying! Therefore, as an Investor you will have your pick of th bunch. I am not overexaggerating here. At this moment in time I can reliably reveal that there are probably 3 or 4 investors still actively buying in Corby, Northants, perhaps 1 in Wellingborough and roughly the same in Rushden. If we assume that this picture is replicated across the country then we can extrapolate and predict that there is (very roughly) about 6000 investors buying at the moment in the UK. 6000 people have their choice of thousands upon thousands upon thousands of bargains. Choice breeds bargains. It is a buyers market.
3. Estate Agents are getting desperate. Imagine if you went back in time to a year ago and called your local Estate Agent to offer £85000 on a property which was on the market for £100000. I can guarantee you that that offer would be immediately placed in "the round file" (dustbin). the agent wouldn't even bother passing the offer on to the vendor. Today it is a completely different story. The agent may be wondering where there next wage cheque is coming from and will therefore do everything they can to make the deal happen. You;d be amazed how much influence an agent has on local house prices at a micro-level. Throw in the offer and then let the agent do their stuff. If the agent poo poos you then move on and find a more pro active firm to deal with.
5. Rents are creeping up. Ok, please imagine two situations. In the first instance you are a FTB couple who would have possibly bought a house together last year but now can't due to the Credit Crunch restrictions. In the second instance you are a family who are beginning to struggle due to rate shock and are looking to get off the ladder. Now, there are two sides to every story. What goes up must come down. If there are losers like the two examples then there must consequently be winners too. The winners are landlords because all the people who are in the situations referred to above will end up in rental sector. With the reduced supply of rental houses (due to the near disappearance of BTL mortgages) properties that means that a sellers (or Landlords more correctly) market is being created. Rents will naturally rise as market condtions prevail.
Read this article and understand - now is the time to buy.
1. Repossession rates are going through the roof! All over the UK people are facing rate shock as they come off their fixed rates. The increased monthly payments lead to arrears. Elsewhere, increased costs at the fuel pumps, and higher expenses at the checkout are pushing more and more pressure onto the family purse. For some, this undoubtably leads to breaking point. Repo's are now running at almost the highest rate since records began. Although unfortunate for those concerned, the flood of cheap properties onto the market makes it Christmas Day for the Professional Investor.
2. Less competiton. Two summers ago a competitively priced house coming onto the market in a readily lettable area would have created a furore. Investors would be heading down to the Estate Agents like a flock of geese. Now the same property would hardly raise an eyebrow even with a For Sale board up, an editorial in the local rag, a highlighted position on Rightmove, 500 mailings and 50 call outs. No-one is buying! Therefore, as an Investor you will have your pick of th bunch. I am not overexaggerating here. At this moment in time I can reliably reveal that there are probably 3 or 4 investors still actively buying in Corby, Northants, perhaps 1 in Wellingborough and roughly the same in Rushden. If we assume that this picture is replicated across the country then we can extrapolate and predict that there is (very roughly) about 6000 investors buying at the moment in the UK. 6000 people have their choice of thousands upon thousands upon thousands of bargains. Choice breeds bargains. It is a buyers market.
3. Estate Agents are getting desperate. Imagine if you went back in time to a year ago and called your local Estate Agent to offer £85000 on a property which was on the market for £100000. I can guarantee you that that offer would be immediately placed in "the round file" (dustbin). the agent wouldn't even bother passing the offer on to the vendor. Today it is a completely different story. The agent may be wondering where there next wage cheque is coming from and will therefore do everything they can to make the deal happen. You;d be amazed how much influence an agent has on local house prices at a micro-level. Throw in the offer and then let the agent do their stuff. If the agent poo poos you then move on and find a more pro active firm to deal with.
5. Rents are creeping up. Ok, please imagine two situations. In the first instance you are a FTB couple who would have possibly bought a house together last year but now can't due to the Credit Crunch restrictions. In the second instance you are a family who are beginning to struggle due to rate shock and are looking to get off the ladder. Now, there are two sides to every story. What goes up must come down. If there are losers like the two examples then there must consequently be winners too. The winners are landlords because all the people who are in the situations referred to above will end up in rental sector. With the reduced supply of rental houses (due to the near disappearance of BTL mortgages) properties that means that a sellers (or Landlords more correctly) market is being created. Rents will naturally rise as market condtions prevail.
Read this article and understand - now is the time to buy.
The stupidest thing people say about property
The stupidest thing I hear people say at the moment is "I'm waiting until the property market bottom outs until I buy!". Who do you think you are - Donald Trump. The reason this is such a crazy thing to come out with is because:1. There is no such thing as a UK property market. Even within a single street house prices move as amazingly different paces. Take the example of a street I know well. On this street I've seen 3 bed terraces sell for £100,000 then £90,000 then £80,000 over the last 6 months - but try telling this to Mr. Hard Nosed Vendor at no.42 who is sticking to his guns with an asking price of £129,950! If we can't get a single message across within the space of 200 yards, what chance across the whole nation?2. Who knows when the market has hit rock bottom? I jokingly said at the start that you'd have to have the business acumen of Donald Trump to time the market but perhaps this analogy is not too far from the truth. How many people do you know who purposefully timed the 80s property boom correctly? How many got in and got out of the Dot Com boom in the black? How many made a killing when gold tripled between 2006 and 2008? How many bought Vodafone stock the week before they got a 3G licence? I'm going to guess that the answer to all these questions is none or not many. So why, oh why, do we listen to the pub know it alls when it comes to property? 3. Just because you wait for the market to bottom out doesn't mean that everyone else will. There is an old saying that the deal of a lifetime comes along every week - and this is as true in property as it is in other investments realms. Whilst you are waiting for the perfect deal others will have bought crackers? Don't get paralysis by analysis. By all means do your research and due dilligence but make sure that when a deal fits you don't let it pass by - just in case the market hasn't quite reached rock bottom.
In summary realise that there is no such thing as the UK housing market no matter what the Daily Hate may like to tell you. If you find a property that is a good deal then don;t rest on your laurels. Buy when the sale is on!
In summary realise that there is no such thing as the UK housing market no matter what the Daily Hate may like to tell you. If you find a property that is a good deal then don;t rest on your laurels. Buy when the sale is on!
Mortgage Misery - The 3 hurdles faced by First Time Buyers
The "Credit Crunch" refers to the fact that it is now more difficult for a First Time buyer to get a mortgage than at any time since the 1970s - but why is it harder? What have the banks actually done to make it harder. There are 3 main hurdles that First Time Buyers have had put in front of them.
1. Higher Lending rates. In 2006 it was possible to get a 2year fixed 125% mortgage from Northern Rock at 5.79%. Now even a 90% 2 year fixed rate is going to cost upwards of 7%. However - there is a way to get round this. By negotiating with the vendor to achieve a "vendor gifted deposit" of 10%, it is possible to get a rate of 6.44%. On this rate a mortgage of £92000 is going to cost less than £500 - still cheaper than renting. It is important to remember that although 6.44% may seem high, rates are still historically low. If you can own a property (even on interest only) for around about the same monthly cost than renting then it always makes sense to make the purchase - particularly when your deposit is being paid for you.
2. Larger deposit required. "LTV" is the key acronym of the Credit Crunch. It stands for Loan to Value and refers to the size of your deposit as compared to the value of your house. 10% LTV good/ 99% LTV bad. Firstly, the "Together" mortgage, where a FTB was given enough money to purchase the property and surplus cash up to the lesser of 25% of the property value or £30k. Very soon afterwards 100% mortgages went. 95% mortgages are still in existence but are as rare as the rocking horse proverbial. In reality though a FTB can get a 90% mortgage by once again negotiating a 10% Vendor Gifted Deposit,
3. Banks have added more rules. This is ture. In terms of properties, FTB's shouldn't go out looking to max themselves out with 5x joint income mortgages - banks just wont stretch that far at the moment. Banks have also taken a distinct dislike to New Build Flats but who can blame them? Thousands of these are lying empty across England. Obviously the Credit Crunch has also meant that those with Bad credit will now struggle to get a mortgage. Is this surprising though? If you have bad credit the get used to renting. For the frest of the First Time Buyers ot there though, if you are 18 and earning, have ID and a Credit Report then you are likely to be eligible for a mortgage.
In conclusion, don't believe the hype in the newspaper. It is true that the Credit Crunch has meant that rates have went up, LTV's have came down and criteria has tightened but all this must be weighed up against the fact that house prices have fallen and many, many vendors have became more realistic on prices as opposed to shoving it on the market at a ridiculous price and waiting for the market to catch up.
1. Higher Lending rates. In 2006 it was possible to get a 2year fixed 125% mortgage from Northern Rock at 5.79%. Now even a 90% 2 year fixed rate is going to cost upwards of 7%. However - there is a way to get round this. By negotiating with the vendor to achieve a "vendor gifted deposit" of 10%, it is possible to get a rate of 6.44%. On this rate a mortgage of £92000 is going to cost less than £500 - still cheaper than renting. It is important to remember that although 6.44% may seem high, rates are still historically low. If you can own a property (even on interest only) for around about the same monthly cost than renting then it always makes sense to make the purchase - particularly when your deposit is being paid for you.
2. Larger deposit required. "LTV" is the key acronym of the Credit Crunch. It stands for Loan to Value and refers to the size of your deposit as compared to the value of your house. 10% LTV good/ 99% LTV bad. Firstly, the "Together" mortgage, where a FTB was given enough money to purchase the property and surplus cash up to the lesser of 25% of the property value or £30k. Very soon afterwards 100% mortgages went. 95% mortgages are still in existence but are as rare as the rocking horse proverbial. In reality though a FTB can get a 90% mortgage by once again negotiating a 10% Vendor Gifted Deposit,
3. Banks have added more rules. This is ture. In terms of properties, FTB's shouldn't go out looking to max themselves out with 5x joint income mortgages - banks just wont stretch that far at the moment. Banks have also taken a distinct dislike to New Build Flats but who can blame them? Thousands of these are lying empty across England. Obviously the Credit Crunch has also meant that those with Bad credit will now struggle to get a mortgage. Is this surprising though? If you have bad credit the get used to renting. For the frest of the First Time Buyers ot there though, if you are 18 and earning, have ID and a Credit Report then you are likely to be eligible for a mortgage.
In conclusion, don't believe the hype in the newspaper. It is true that the Credit Crunch has meant that rates have went up, LTV's have came down and criteria has tightened but all this must be weighed up against the fact that house prices have fallen and many, many vendors have became more realistic on prices as opposed to shoving it on the market at a ridiculous price and waiting for the market to catch up.
Thursday 24 July 2008
How the little things add up
You may have heard of the "Latte Factor", and although this term is aimed at an American audience, it is only the brand names that change in the UK. Here is how small costs you may have at the moment would exponentially grow if you invested the cash as opposed to wasting it. In all circumstances, I'll assume you save the cash for 32 years (from the average First Time Buyer age until retirement) and that the money gets saved into an account paying 6.25% interest (tax free):
Daily Newspaper - £10,534 Sausage roll and can of pop - £39,505 20 fags a day - £221,233 Packet of chewing gum - £18,346
Total - £289,618
As you can see, these small costs add to up to a fortune overtime. It is necessary to think about this carefully and make a decision. Would you rather have the instant gratification of the above, or would you rather have £289,618? It seems an obvious answer but why then are so little of us making the right choice.
If you want the cash then look at ways you can replace, substitute and amend. Learn how to break habits. Discover new ways of doing things. For those that want to break from the norm and do things differently there is a massive support network on the internet.
If you want to live life differently then think about how you can use your new wealth to good effect. Doesn't it rock your world to think that changing your life in so small a way can eventually lead to you becoming a millionaire and beyond. This is the Butterfly effect in real life!
http://www.uncommonadvice.co.uk
Article Source: http://EzineArticles.com/?expert=Ross_Taylor
Daily Newspaper - £10,534 Sausage roll and can of pop - £39,505 20 fags a day - £221,233 Packet of chewing gum - £18,346
Total - £289,618
As you can see, these small costs add to up to a fortune overtime. It is necessary to think about this carefully and make a decision. Would you rather have the instant gratification of the above, or would you rather have £289,618? It seems an obvious answer but why then are so little of us making the right choice.
If you want the cash then look at ways you can replace, substitute and amend. Learn how to break habits. Discover new ways of doing things. For those that want to break from the norm and do things differently there is a massive support network on the internet.
If you want to live life differently then think about how you can use your new wealth to good effect. Doesn't it rock your world to think that changing your life in so small a way can eventually lead to you becoming a millionaire and beyond. This is the Butterfly effect in real life!
http://www.uncommonadvice.co.uk
Article Source: http://EzineArticles.com/?expert=Ross_Taylor
Why house prices will go UP over the next 5 years
Many uninformed people may feel that the fall in UK house prices will make it easier to get on the housing ladder but in reality it is more difficult now than ever before. The reason is simple: banks do not want to secure their assets against property at the moment and therefore, in a nutshell, do not want to lend mortgages. Today, even if you had a big deposit, perfect credit and no debt you'd still pay more for your mortgage than someone with no deposit whatsoever would've done 9 months ago. Now that is absolutely scandalous!
The real killer though is the fact that no-one whatsoever is mentioning amidst all the credit crunch hype. This fact turns everything you may read in the papers on its head. This fact is that in July 2007, the government announced that 5 million new homes were required in the UK in order to meet housing demand. The drivers behind this demand were: more immigrants, more adults, more pensioners and more single-person households. Fact: housing demand is there. The other side of the coin is that since the Credit Crunch has kicked in most builders have slowed down production meaning that targets, which were already being missed, are now miles off.
Fact: housing supply is not there. Now correct me if I'm wrong, but the Credit Crunch hasn't stopped immigration. It hasn't stopped pensioners wanting to maintain their own independence in their old age. It certainly hasn't stopped divorces - if anything, it has contributed to a few. Therefore demand has continued to steam ahead whilst supply has been stopped at source. This situation will build and build like a boiling pot until such time as mortgage criteria is eased - which must inevitably happen. At this point I strongly predict that house prices will rise faster than ever before. The winners will be the investors who can move quickly, not the pub "know-it-alls" who pass comment after reading out of date hyped-up newspaper nonsense. The money-men who will have amassed huge portfolios when property was under priced will triumph. Should this occur, it is likely that the owner occupation rate in the UK will drop from 70% to nearer 60% as is the case in mainland Europe. A lot of people will make a lot of money but as a First Time Buyer with the dream of owning your own home it will be more difficult than ever to get on the ladder. It is sad to think that home ownership, the vehicle behind the economic boom of the last 15years, will now be out of reach for millions.
However, it doesn't have to be this way. Although the numbers have changed, the principles remain the same. Prospective First Time Buyers must take this chance now as the window of opportunity is going to reduce year after year as we creep towards the continental model.
Look at the current UK property market as if it was a big clothes shop. Would you buy the fashions when they were priced at their peak, or would you wait until the sale was on? Well the sale is well and truly on at the moment. Find yourself a bargain and wait for the day when house prices go up and beyond anyone's wildest expectations. That day may be a lot closer than you think.
http://www.uncommonadvice.co.uk
Article Source: http://EzineArticles.com/?expert=Ross_Taylor
The real killer though is the fact that no-one whatsoever is mentioning amidst all the credit crunch hype. This fact turns everything you may read in the papers on its head. This fact is that in July 2007, the government announced that 5 million new homes were required in the UK in order to meet housing demand. The drivers behind this demand were: more immigrants, more adults, more pensioners and more single-person households. Fact: housing demand is there. The other side of the coin is that since the Credit Crunch has kicked in most builders have slowed down production meaning that targets, which were already being missed, are now miles off.
Fact: housing supply is not there. Now correct me if I'm wrong, but the Credit Crunch hasn't stopped immigration. It hasn't stopped pensioners wanting to maintain their own independence in their old age. It certainly hasn't stopped divorces - if anything, it has contributed to a few. Therefore demand has continued to steam ahead whilst supply has been stopped at source. This situation will build and build like a boiling pot until such time as mortgage criteria is eased - which must inevitably happen. At this point I strongly predict that house prices will rise faster than ever before. The winners will be the investors who can move quickly, not the pub "know-it-alls" who pass comment after reading out of date hyped-up newspaper nonsense. The money-men who will have amassed huge portfolios when property was under priced will triumph. Should this occur, it is likely that the owner occupation rate in the UK will drop from 70% to nearer 60% as is the case in mainland Europe. A lot of people will make a lot of money but as a First Time Buyer with the dream of owning your own home it will be more difficult than ever to get on the ladder. It is sad to think that home ownership, the vehicle behind the economic boom of the last 15years, will now be out of reach for millions.
However, it doesn't have to be this way. Although the numbers have changed, the principles remain the same. Prospective First Time Buyers must take this chance now as the window of opportunity is going to reduce year after year as we creep towards the continental model.
Look at the current UK property market as if it was a big clothes shop. Would you buy the fashions when they were priced at their peak, or would you wait until the sale was on? Well the sale is well and truly on at the moment. Find yourself a bargain and wait for the day when house prices go up and beyond anyone's wildest expectations. That day may be a lot closer than you think.
http://www.uncommonadvice.co.uk
Article Source: http://EzineArticles.com/?expert=Ross_Taylor
Think Like a Bank - The ID you need to get a Mortgage
In order to get a mortgage it is necessary to have correct ID. These days it is impossible to get a phone contract without proper ID so it is amazing to think how may people believe that it is not necessary to get a mortgage. The classic pieces of ID are passport and drivers license. Be aware that the passport must be in date and the drivers license must show the correct address. If these simple rules cannot be met then we are off to a bad start. Photographic ID is always required - this is the golden rule! If the bank don't ask for it, then it is invariably required by the FSA, the government's financial watchdog. For people without photographic ID my advice is always the same: go out and get some. Passports can be applied for at www.ips.gov.uk and you can start the process of applying for a drivers license at www.direct.gov.uk. In most cases a provisional license will suffice.
If you are not British but hail from an EEA member country then the same rules apply. Some banks will also wish to see your Workers Registration Scheme documents (commonly referred to as the Home Office documents). The most important thing to note with these is that they must show your current address and current employer. If they don't then they are worthless and should be changed as soon as possible.
If you are not British and not from an EEA country then the bank will also want to see you Visa or residence card. People with permanent right to reside have no issues however those wigth limited rights to reside face big problems as the number of lenders who will help them has contracted to only a small handful.
Once photographic ID requirements are passed, the bank will then require proof of your address. For some banks this process is satisfied from something so simple as noting your presence on the electoral roll. The norm however is that you will have to produce documentary evidence of your address from some time in the last three months. Generally this proof will be either a bank statement, utility bill, drivers license or council tax bill. The most obvious thing to state is that it must show a correct address! The other issues which pops up continuously is that if a bank statement is to be used as proof of address then it must be a proper, bonafide, appear in the letter box every month bank statement. Over the counter printouts are not any good, even if they have been stamped and verified by the cashier. Every bank is able to give you a reprint of your statement no matter what they might say. Persistence pays.
If a utility bill is to be used then please make sure it is an actual utility bill as opposed to a welcome letter reminder etc. The banks aren't going to give you a mortgage if you can't pay the gas! Note that mobile phone bills cannot be used with any bank
If you wish to use you council tax bill or drivers license as proof of address then the need for the document to be from the last 3 months is lessened.
It is important to note that since the credit crunch has started the banks are much more likely to look at statements which are used as proof of address as opposed to simply filing them away. They will want to see good conduct, for example, they'll want to see that you have remained within your overdraft limit and they'll want to see direct debits for utility payments. If they don't see this then they will start to probe, and withhold the mortgage offer until their curiosity is satisfied.
In conclusion then, providing ID to support a mortgage application is an absolute minefield. In order to make the process as simple as possible. Make sure you have the proper ID now, and if not take immediate action.
http://www.uncommonadvice.co.uk
Article Source: http://EzineArticles.com
If you are not British but hail from an EEA member country then the same rules apply. Some banks will also wish to see your Workers Registration Scheme documents (commonly referred to as the Home Office documents). The most important thing to note with these is that they must show your current address and current employer. If they don't then they are worthless and should be changed as soon as possible.
If you are not British and not from an EEA country then the bank will also want to see you Visa or residence card. People with permanent right to reside have no issues however those wigth limited rights to reside face big problems as the number of lenders who will help them has contracted to only a small handful.
Once photographic ID requirements are passed, the bank will then require proof of your address. For some banks this process is satisfied from something so simple as noting your presence on the electoral roll. The norm however is that you will have to produce documentary evidence of your address from some time in the last three months. Generally this proof will be either a bank statement, utility bill, drivers license or council tax bill. The most obvious thing to state is that it must show a correct address! The other issues which pops up continuously is that if a bank statement is to be used as proof of address then it must be a proper, bonafide, appear in the letter box every month bank statement. Over the counter printouts are not any good, even if they have been stamped and verified by the cashier. Every bank is able to give you a reprint of your statement no matter what they might say. Persistence pays.
If a utility bill is to be used then please make sure it is an actual utility bill as opposed to a welcome letter reminder etc. The banks aren't going to give you a mortgage if you can't pay the gas! Note that mobile phone bills cannot be used with any bank
If you wish to use you council tax bill or drivers license as proof of address then the need for the document to be from the last 3 months is lessened.
It is important to note that since the credit crunch has started the banks are much more likely to look at statements which are used as proof of address as opposed to simply filing them away. They will want to see good conduct, for example, they'll want to see that you have remained within your overdraft limit and they'll want to see direct debits for utility payments. If they don't see this then they will start to probe, and withhold the mortgage offer until their curiosity is satisfied.
In conclusion then, providing ID to support a mortgage application is an absolute minefield. In order to make the process as simple as possible. Make sure you have the proper ID now, and if not take immediate action.
http://www.uncommonadvice.co.uk
Article Source: http://EzineArticles.com
What to do if you are in Negative Equity
Negative Equity basically means that the size of your mortgage AND any secured loans you may have is greater than the value of your house. The scourge of the 1990s is back in a big way and is set to engulf a whole new generation of home-owners. International investment bank Morgan Stanley has said that 1.2 million British homes could be in negative equity before the end of next year. Contrary to speculation and rumours, being in Negative Equity does not mean that you will automatically be threatened with repossession by your lender.
However, you are going to have issues ahead of you which could cause a lot of sleepless nights. When your current mortgage deal ends it will be impossible to switch to a competitive new product unless you have a large windfall of cash in order to reduce your outstanding debt. Consequently you will be stuck on your bank's Standard Variable Rate (SVR) which will be somewhere between 6.5% to 10% and above. For most people this will lead to much larger monthly payments. Also, because the rate is variable it could rise in the future as the government puts pressure on the Bank of England to control inflation.
This jump in monthly payments is referred to as "rate shock" and this is what you should be really worried about. If your mortgage was to go up by £500 a month, would that cause you problems? Don't take it lightly, higher mortgage payments lead to arrears and arrears lead to repossession. Already, there have been more repossession procedures started in 2008 than in any other year since 1992. It doesn't matter if you live in a slum or in the best neighbourhood in town - the bank don't care. Families are being moved out of their homes under force because they can't come to terms with the rate shock.
Can you imagine the shame? Can you imagine the embarassment of having to phone an estate agent to go back into a property which was once your family home? How would it feel to look your children in the eye when you are in the waiting room at the council emergency housing office?
Repossession is not the end of the matter however. What most people don't realise is that you still have responsibility for the property until it is sold. When the locks get changed - you are charged. Also, with today's market it is not guaranteed that the property will sell quickly. As the market shrinks the debt piles up and the likelihood of a repossessed owner getting on the ladder again shrinks and shrinks.
So what should you do as a homeowner with negative equity? Well the answer to that is really based on your own circumstances and independent advice should be sought. It is universally the case, however, that you can create equity more easily than you first realise. By channelling cash into the right funds, taking a long term view and paying yourself first, Negative Equity can quickly become a thing of the past.
My name is Ross Taylor and I am committed to helping you feel freedom by paying off your mortgage in the quickest possible time. I have devised a fool proof plan which anyone can use to be mortgage free in 10years! Please visit http://www.uncommonadvice.co.uk to learn more.
Article Source: http://EzineArticles.com/?expert=Ross_Taylor
However, you are going to have issues ahead of you which could cause a lot of sleepless nights. When your current mortgage deal ends it will be impossible to switch to a competitive new product unless you have a large windfall of cash in order to reduce your outstanding debt. Consequently you will be stuck on your bank's Standard Variable Rate (SVR) which will be somewhere between 6.5% to 10% and above. For most people this will lead to much larger monthly payments. Also, because the rate is variable it could rise in the future as the government puts pressure on the Bank of England to control inflation.
This jump in monthly payments is referred to as "rate shock" and this is what you should be really worried about. If your mortgage was to go up by £500 a month, would that cause you problems? Don't take it lightly, higher mortgage payments lead to arrears and arrears lead to repossession. Already, there have been more repossession procedures started in 2008 than in any other year since 1992. It doesn't matter if you live in a slum or in the best neighbourhood in town - the bank don't care. Families are being moved out of their homes under force because they can't come to terms with the rate shock.
Can you imagine the shame? Can you imagine the embarassment of having to phone an estate agent to go back into a property which was once your family home? How would it feel to look your children in the eye when you are in the waiting room at the council emergency housing office?
Repossession is not the end of the matter however. What most people don't realise is that you still have responsibility for the property until it is sold. When the locks get changed - you are charged. Also, with today's market it is not guaranteed that the property will sell quickly. As the market shrinks the debt piles up and the likelihood of a repossessed owner getting on the ladder again shrinks and shrinks.
So what should you do as a homeowner with negative equity? Well the answer to that is really based on your own circumstances and independent advice should be sought. It is universally the case, however, that you can create equity more easily than you first realise. By channelling cash into the right funds, taking a long term view and paying yourself first, Negative Equity can quickly become a thing of the past.
My name is Ross Taylor and I am committed to helping you feel freedom by paying off your mortgage in the quickest possible time. I have devised a fool proof plan which anyone can use to be mortgage free in 10years! Please visit http://www.uncommonadvice.co.uk to learn more.
Article Source: http://EzineArticles.com/?expert=Ross_Taylor
Show me the Money! Think about the residual income streams that could be flowing into your purse
Everyone will have a hobby that they look forward to after work. It might be playing darts at your local, supporting your football team or even something as mundane as watching Coronation Street. It is amazing to think that people often put ten times as much effort into these hobbies as they do their 9 to 5 work. In Mortgages, Money and Magic I show how anyone can pay off their mortgage in 10years or less simply through the channeling of the cash that comes from an average paying job. I espouse free (or at least very cheap) hobbies for anyone attempting the plan. However, it could be possible to put the plan into fast forward by replacing a "cheap" hobby with an attempt at creating a residual income. In a nutshell, a residual income stream, is an income which will come into your purse on a steady basis irrelevant of any efforts you put in after the initial set-up. Here are 20 ways you could bring in residual income:
Interest - in Mortgages, Money and Magic I discuss ISA saving at length. Recent changes to the rules have made these plans even more attractive.
Write a song - if you have any musical talent at all then pick this as a a hobby. Look at the example of people like Tim Rice, Guy Chambers and Bernie Taupin. People who have all made fortunes from song writing without stepping fully into the spotlight. Think about how much Noddy Holder loves Christmas coming around each year.
Write a book - even the most simple ebook listed on EBay can pay dividends for years to come. A few months back I bought an ebook which was completely irrelevant and completely out of date in terms of the figures stated within BUT it was still selling 5 to 10 copies a week on EBay. Residual income at its best!
Insurance and Securities - in the world of Insurance you are paid a monthly commision after the client has held the policiy for a certain amount of time. For example, I recently sold a client £1million worth of life insurance. Once the client has held that policy for 4years, I will be paid c. £1.50 a month until the policy expires. Not huge sums but when you consider that I write about 30 policies a month you can easily see that it soon mounts up.
Network marketing - I'm sure that any MLM agent will tell you that the real fortunes don't come from delivering and collecting catalogues but rather by recruiting new agents. Every time the new agents makes a sale you will receive a commission. When your agents recruit you will get a commission from the downline sales ad infinitum.
Actors - if Am Dram is your thing then persevere and go for a biggy! I recall that Paul Hogan earned one of the biggest paychecks ever from his role in Crocodile Dundee; not from his main payment, but rather from a residual commission he took.
Entrepreneurs - If you can set up a business then you'll be on the fast track to getting your mortgage finished early. Once you have the fundamentals in place, look for ways to automate the cash so you can sick back and look forward to making bank deposits at the end of each month.
Franchise - I'm not a fan of buying a franchise - but how about earning residual income by franchising out your own business idea. Think of the cash Mr. Domino makes every time he sets up a pizza franchise!
Investors - high yielding shares can give a tremendous residual income. Look for IPOs - one man I know lives from the dividends he receives from shares in the UK utilities privatised in the 80s.
Paint a picture - if you can draw then there are numerous ways to paint some cash into your bank account. Think about drawing a comic strip, contributing artwork to a magazine or even painting people you know.
Write some software - for those more technically minded than myself just one computer script could see the cash flowing in for years to come.
Create a game - whether it be online or a good old fashioned board game, thinking like a child good lead to small payments for a long time to come. Think about Charles Darrow, the inventor of Monopoly.
Invent something - The classic example of a residual income through invention is Percy Shaw the inventor of Cats Eyes. He anecdotally received only 1p for every mile that Cats Eyes were used - however this small residue was enough to ensure that he made millions!
Help a mate - if you're not business minded but your friend or brother is, then consider becoming a partner with them. It's really irrelevant where the money comes from - if you can leverage someone else's hard work then all the better.
Rent out your goods - get a copy of the yellow pages and take a note every firm that rents out something or other. You'll find everything from cement mixers to bouncy castles. Think about what you own that could bve rented out rather than gathering dust in your attic or garage.
Become a landlord - this is the one I love the most. Get a property and find a tenant. Sit back for the next decade and watch as someone else pays the mortgage for you.
Pensions - if you are a senior then your pension is something of a residual income.
Endorse a product - if you are an expert on a subject then ensure you get a commission per sale. Think about Gary Lineker getting paid for crisp sales, or David Beckham getting paid for every LA Galaxy top that is shifted.
Marketing - introduce products to clients on a commission basis
As you can see, there are plenty of different ways of ensuring that small but steady amounts of income enter your bank account each month outside the normal 9to5 routine. Utilising these methods in addition to the practices discussed in Money, Mortgages and Magic mean that paying your mortgage off in 5years or less is nowhere near as difficult as it may first sound.
My name is Ross Taylor and I am committed to helping you feel freedom by paying off your mortgage in the quickest possible time. I have devised a fool proof plan which anyone can use to be mortgage free in 10years! Please visit http://www.uncommonadvice.co.uk to learn more.
Article Source: http://EzineArticles.com/?expert=Ross_Taylor
Interest - in Mortgages, Money and Magic I discuss ISA saving at length. Recent changes to the rules have made these plans even more attractive.
Write a song - if you have any musical talent at all then pick this as a a hobby. Look at the example of people like Tim Rice, Guy Chambers and Bernie Taupin. People who have all made fortunes from song writing without stepping fully into the spotlight. Think about how much Noddy Holder loves Christmas coming around each year.
Write a book - even the most simple ebook listed on EBay can pay dividends for years to come. A few months back I bought an ebook which was completely irrelevant and completely out of date in terms of the figures stated within BUT it was still selling 5 to 10 copies a week on EBay. Residual income at its best!
Insurance and Securities - in the world of Insurance you are paid a monthly commision after the client has held the policiy for a certain amount of time. For example, I recently sold a client £1million worth of life insurance. Once the client has held that policy for 4years, I will be paid c. £1.50 a month until the policy expires. Not huge sums but when you consider that I write about 30 policies a month you can easily see that it soon mounts up.
Network marketing - I'm sure that any MLM agent will tell you that the real fortunes don't come from delivering and collecting catalogues but rather by recruiting new agents. Every time the new agents makes a sale you will receive a commission. When your agents recruit you will get a commission from the downline sales ad infinitum.
Actors - if Am Dram is your thing then persevere and go for a biggy! I recall that Paul Hogan earned one of the biggest paychecks ever from his role in Crocodile Dundee; not from his main payment, but rather from a residual commission he took.
Entrepreneurs - If you can set up a business then you'll be on the fast track to getting your mortgage finished early. Once you have the fundamentals in place, look for ways to automate the cash so you can sick back and look forward to making bank deposits at the end of each month.
Franchise - I'm not a fan of buying a franchise - but how about earning residual income by franchising out your own business idea. Think of the cash Mr. Domino makes every time he sets up a pizza franchise!
Investors - high yielding shares can give a tremendous residual income. Look for IPOs - one man I know lives from the dividends he receives from shares in the UK utilities privatised in the 80s.
Paint a picture - if you can draw then there are numerous ways to paint some cash into your bank account. Think about drawing a comic strip, contributing artwork to a magazine or even painting people you know.
Write some software - for those more technically minded than myself just one computer script could see the cash flowing in for years to come.
Create a game - whether it be online or a good old fashioned board game, thinking like a child good lead to small payments for a long time to come. Think about Charles Darrow, the inventor of Monopoly.
Invent something - The classic example of a residual income through invention is Percy Shaw the inventor of Cats Eyes. He anecdotally received only 1p for every mile that Cats Eyes were used - however this small residue was enough to ensure that he made millions!
Help a mate - if you're not business minded but your friend or brother is, then consider becoming a partner with them. It's really irrelevant where the money comes from - if you can leverage someone else's hard work then all the better.
Rent out your goods - get a copy of the yellow pages and take a note every firm that rents out something or other. You'll find everything from cement mixers to bouncy castles. Think about what you own that could bve rented out rather than gathering dust in your attic or garage.
Become a landlord - this is the one I love the most. Get a property and find a tenant. Sit back for the next decade and watch as someone else pays the mortgage for you.
Pensions - if you are a senior then your pension is something of a residual income.
Endorse a product - if you are an expert on a subject then ensure you get a commission per sale. Think about Gary Lineker getting paid for crisp sales, or David Beckham getting paid for every LA Galaxy top that is shifted.
Marketing - introduce products to clients on a commission basis
As you can see, there are plenty of different ways of ensuring that small but steady amounts of income enter your bank account each month outside the normal 9to5 routine. Utilising these methods in addition to the practices discussed in Money, Mortgages and Magic mean that paying your mortgage off in 5years or less is nowhere near as difficult as it may first sound.
My name is Ross Taylor and I am committed to helping you feel freedom by paying off your mortgage in the quickest possible time. I have devised a fool proof plan which anyone can use to be mortgage free in 10years! Please visit http://www.uncommonadvice.co.uk to learn more.
Article Source: http://EzineArticles.com/?expert=Ross_Taylor
10% Return? Read the small print - the best place to save your cash during the Credit Crunch
With stock markets on red alert, inflation at almost 5% and petrol and food prices going through the roof, now is a worrying time to be around. It isn't a great time to be shouldering a hefty mortgage either, with rates still high and the market effectively frozen. It may be the case that although you have thousands of pounds of equity in your home, you are still struggling because your "LTV" is too high.
At the moment, the banks are tripping over themselves to attract savers so that they don't have to borrow from each other. Inter bank borrowing has frozen up since the Credit Crunch started as they worry about who has loaned how much to this risky borrower or that dodgy finance house.
It is important to be aware though that the Headline offers being advertised in the banks at the moment may not turn out to be as good as you imagine. You must look at what you are actually going to have once inflation has been taken off - and Gordon Brown has taken his cut.
A market-leading 6.5% instant access savings account, like Bradford & Bingley's, is actually only worth 1.9% after you've subtracted the Retail Price Index, which has risen to an 11-year high of 4.6%. Then of course there is 20% tax on the interest, or 40% if you're a high-rate taxpayer. At basic rate, the B&B real net return on cash saved for a year is an uninspiring 0.6%, and actually minus 0.7% for top-rate taxpayers.
Now imagine that instead of saving the money in that account, you had instead used it as a mortgage overpayment. With most peoples mortgage rate at around the 7% market (if it isn't now it will be when your fixed rate ends!), a saving of £10,000 equates to £700 less interest due. By continuing with your normal monthly mortgage payment even after paying in the lump sum, your equity will snowball - resulting in your mortgage ending much more quickly.
Not only does this mean that you are getting more bang for your buck, but it also means that your money is safe (remember Barings?) and also that you will be reducing your LTV - the key ratio in today's mortgage market. By bringing down your LTV you will be in prime position to capitalise on new mortgage deals when everything gets back to normal.
My name is Ross Taylor and I am committed to helping you feel real Freedom by paying off your mortgage in the quickest possible time. I have devised an easily followed plan which anyone can use to be mortgage free in 10 years! Please visit http://www.uncommonadvice.co.uk to learn more.
Article Source: http://EzineArticles.com/?expert=Ross_Taylor
At the moment, the banks are tripping over themselves to attract savers so that they don't have to borrow from each other. Inter bank borrowing has frozen up since the Credit Crunch started as they worry about who has loaned how much to this risky borrower or that dodgy finance house.
It is important to be aware though that the Headline offers being advertised in the banks at the moment may not turn out to be as good as you imagine. You must look at what you are actually going to have once inflation has been taken off - and Gordon Brown has taken his cut.
A market-leading 6.5% instant access savings account, like Bradford & Bingley's, is actually only worth 1.9% after you've subtracted the Retail Price Index, which has risen to an 11-year high of 4.6%. Then of course there is 20% tax on the interest, or 40% if you're a high-rate taxpayer. At basic rate, the B&B real net return on cash saved for a year is an uninspiring 0.6%, and actually minus 0.7% for top-rate taxpayers.
Now imagine that instead of saving the money in that account, you had instead used it as a mortgage overpayment. With most peoples mortgage rate at around the 7% market (if it isn't now it will be when your fixed rate ends!), a saving of £10,000 equates to £700 less interest due. By continuing with your normal monthly mortgage payment even after paying in the lump sum, your equity will snowball - resulting in your mortgage ending much more quickly.
Not only does this mean that you are getting more bang for your buck, but it also means that your money is safe (remember Barings?) and also that you will be reducing your LTV - the key ratio in today's mortgage market. By bringing down your LTV you will be in prime position to capitalise on new mortgage deals when everything gets back to normal.
My name is Ross Taylor and I am committed to helping you feel real Freedom by paying off your mortgage in the quickest possible time. I have devised an easily followed plan which anyone can use to be mortgage free in 10 years! Please visit http://www.uncommonadvice.co.uk to learn more.
Article Source: http://EzineArticles.com/?expert=Ross_Taylor
The No BS Credit Crunch Ready Guide to BTL 2008
Whilst the weak are running around like headless chickens panicking over the Credit Crunch, a very small minority are taking a long term view and looking at today's market in a very different light. If you were to go to Harrod's in London, would you rather buy something at full retail, or wait until the sale is on? Assuming you have half a brain then I'm sure you'd rather bag yourself a bargain. This is the situation in the UK housing market today. Anyone looking to take advantage of the situation needs to make sure they are aware of the fundamentals and then take action quickly in order to capitalise. If an alien came into my office today, this is the information I'd make sure they knew:
* The hidden costs of BTL. You need to be aware of all the costs. For 5years unscrupulous firms have been hiding the facts.
* How to make sure a deal stacks. Don't throw good money after bad. Make sure the deal is properly costed before parting with any cash.
* How the bank make sure YOU stack. The Credit Crunch means that the banks are more picky in who they lend money to. Fortunately for us, the bank only care about 4 things.
* What taxes need to be taken into consideration. No-one wants to make bucket loads only for the taxman to take it all away.
* What is the best way to pay back a BTL mortgage? It all boils down to a choice of two things - repayment or interest only.
* What is the best strategy to follow during a recession. I have identified 5 main BTL investment methods, but one of these stands out as the most "Credit Crunch Proof".
* What potential problems could arise during the Credit Crunch - and how to fix them. The recession raises extra problems that weren't a concern when the market was good.
In summary, every cloud has a silver lining. Whilst the Daily Mail readers are shuttering their doors and windows, canny investors are cashing in. In a decades time, don't look back and say "I wish I had bought when the prices dropped", take action now!
http://www.uncommonadvice.co.uk
Article Source: http://EzineArticles.com/?expert=Ross_Taylor
* The hidden costs of BTL. You need to be aware of all the costs. For 5years unscrupulous firms have been hiding the facts.
* How to make sure a deal stacks. Don't throw good money after bad. Make sure the deal is properly costed before parting with any cash.
* How the bank make sure YOU stack. The Credit Crunch means that the banks are more picky in who they lend money to. Fortunately for us, the bank only care about 4 things.
* What taxes need to be taken into consideration. No-one wants to make bucket loads only for the taxman to take it all away.
* What is the best way to pay back a BTL mortgage? It all boils down to a choice of two things - repayment or interest only.
* What is the best strategy to follow during a recession. I have identified 5 main BTL investment methods, but one of these stands out as the most "Credit Crunch Proof".
* What potential problems could arise during the Credit Crunch - and how to fix them. The recession raises extra problems that weren't a concern when the market was good.
In summary, every cloud has a silver lining. Whilst the Daily Mail readers are shuttering their doors and windows, canny investors are cashing in. In a decades time, don't look back and say "I wish I had bought when the prices dropped", take action now!
http://www.uncommonadvice.co.uk
Article Source: http://EzineArticles.com/?expert=Ross_Taylor
Why you should never pay for a franchise
One of the most ridiculous things I often come across on the internet is "Oven Cleaning Franchises". A Google search reveals a grand total of 10,900 websites! The basic jist is this:
* established business format * easily replicable route to business success * the licensed rights to trade under some generic "Oven-Kleene" type brand * an exclusive territory * training and support * specialised equipment and enough cleaning supplies to get you started. * corporate uniform and stickers to put on your van * a spreadsheet to do accounts on * rule book and some headed paper * a big dog to make sure you don't step out of line
Now, all these materials will cost you anywhere between £5000 and £30000. What have you actually got for the money? All you really have is a nice uniform! Not to be cruel to the Oven Cleaning Fraternity but there is nothing above that you couldn't source for free on the internet if you looked hard enough. The Franchisers on the other hand have pocketed a nice windfall and now have another chump who is relying on them for supplies. Imagine if you had used your own initiative and set up on your own without the help of the franchise company - how would things be different? Well you'd be a few grand better off to start with!
In real life there isn't any need to ever go down the franchise route - cross it off your "I wonder..." list today. It is superfluous to your needs. It is something best left to the unimaginative.
In Mortgages, Money and Magic I explain how even someone earning an average income can do amazing things by channeling cash in the proper directions. I show how it is possible to pay off your mortgage within a decade without having to dish out £30k to the guys at the Franchise!
My name is Ross Taylor and I am committed to helping you feel freedom by paying off your mortgage in the quickest possible time. I have devised a fool proof plan which anyone can use to be mortgage free in 10 years! Please visit http://www.uncommonadvice.co.uk to learn more.
http://www.uncommonadvice.co.uk
Article Source: http://EzineArticles.com/?expert=Ross_Taylor
* established business format * easily replicable route to business success * the licensed rights to trade under some generic "Oven-Kleene" type brand * an exclusive territory * training and support * specialised equipment and enough cleaning supplies to get you started. * corporate uniform and stickers to put on your van * a spreadsheet to do accounts on * rule book and some headed paper * a big dog to make sure you don't step out of line
Now, all these materials will cost you anywhere between £5000 and £30000. What have you actually got for the money? All you really have is a nice uniform! Not to be cruel to the Oven Cleaning Fraternity but there is nothing above that you couldn't source for free on the internet if you looked hard enough. The Franchisers on the other hand have pocketed a nice windfall and now have another chump who is relying on them for supplies. Imagine if you had used your own initiative and set up on your own without the help of the franchise company - how would things be different? Well you'd be a few grand better off to start with!
In real life there isn't any need to ever go down the franchise route - cross it off your "I wonder..." list today. It is superfluous to your needs. It is something best left to the unimaginative.
In Mortgages, Money and Magic I explain how even someone earning an average income can do amazing things by channeling cash in the proper directions. I show how it is possible to pay off your mortgage within a decade without having to dish out £30k to the guys at the Franchise!
My name is Ross Taylor and I am committed to helping you feel freedom by paying off your mortgage in the quickest possible time. I have devised a fool proof plan which anyone can use to be mortgage free in 10 years! Please visit http://www.uncommonadvice.co.uk to learn more.
http://www.uncommonadvice.co.uk
Article Source: http://EzineArticles.com/?expert=Ross_Taylor
How to choose Life Insurance like an expert
At some point in everyone's life there will be a time when you will consider purchasing a life insurance policy to ensure that your loved ones are catered for in the event of your death. It can be an extremely confusing transaction because of the amount of jargon that is involved. Cheapest isn't always best though. In reality it could often be the case that a life insurance policy is cheap because there is small print that the provider hopes you don't notice. Instead please use these rules to identify value. Here I will show you the key points you should consider when setting up a policy:
Set the sum assured at the same level as your mortgage. If your mortgage is for £100000 then get £100000 worth of cover; if your mortgage is for £80000, then get £80000 worth of cover. There is no need to get any more than this.
Set the length of term until the age of 65 no matter how quickly you plan to plan to pay off your mortgage. The reason you should do this is that you may still require life insurance in later life. Having to go for a new life insurance policy after the age of 40 can be extremely expensive. The main factor in the cost of life insurance is age so a £100,000 policy at 25 is going to be a lot cheaper than the same policy at age 45.
Don't take the waiver. An insurance waiver is a clause that allows you to miss payments without the policy defaulting, should you ever be out of work. We already have emergency funds factored into our plan that mean this extra is unnecessary.
Always select level term. With level term the sum assured remains constant throughout the term (although obviously affected by inflation). The opposite of level term is decreasing term. Decreasing term life insurance goes down every year leading to the ridiculous situation where you are paying the same amount year on year for less and less return. Level term assurance will only be pennies more than decreasing term so don't scrimp on this one!
Couples should have separate policies. Insurance companies will never tell you this but it is possible to get double the amount of life insurance for only a small increase in price. Having a joint policy would mean that there would only be one payout should any of the two of you die but the slightly more expensive separate policy option would lead to twice the payout. No wonder insurance companies don't tell you this - it would double their liabilities.
Write your policy in trust. Writing the policy in trust means that the beneficiaries of your life insurance policy will not have to pay inheritance tax on the gain. Writing a policy in trust is a relatively simple process. A real expert will be able to set up a policy in trust free of charge.
If we take the example of an average young couple (and assume they are non-smokers) this is how much their policy will cost:
Mortgage Chantelle Preston
£80,000 £5.58 £6.92
£90,000 £6.07 £7.51
£100,000 £6.32 £8.10
£110,000 £6.80 £8.71
£120,000 £7.29 £9.32
I'm sure you'll agree with me that this is very cheap indeed - but more importantly, it serves the needs of the people involved.
In summary, use these rules to make sure that you get the best value for money life insurance available.
http://www.uncommonadvice.co.uk
Article Source: http://EzineArticles.com/?expert=Ross_Taylor
Set the sum assured at the same level as your mortgage. If your mortgage is for £100000 then get £100000 worth of cover; if your mortgage is for £80000, then get £80000 worth of cover. There is no need to get any more than this.
Set the length of term until the age of 65 no matter how quickly you plan to plan to pay off your mortgage. The reason you should do this is that you may still require life insurance in later life. Having to go for a new life insurance policy after the age of 40 can be extremely expensive. The main factor in the cost of life insurance is age so a £100,000 policy at 25 is going to be a lot cheaper than the same policy at age 45.
Don't take the waiver. An insurance waiver is a clause that allows you to miss payments without the policy defaulting, should you ever be out of work. We already have emergency funds factored into our plan that mean this extra is unnecessary.
Always select level term. With level term the sum assured remains constant throughout the term (although obviously affected by inflation). The opposite of level term is decreasing term. Decreasing term life insurance goes down every year leading to the ridiculous situation where you are paying the same amount year on year for less and less return. Level term assurance will only be pennies more than decreasing term so don't scrimp on this one!
Couples should have separate policies. Insurance companies will never tell you this but it is possible to get double the amount of life insurance for only a small increase in price. Having a joint policy would mean that there would only be one payout should any of the two of you die but the slightly more expensive separate policy option would lead to twice the payout. No wonder insurance companies don't tell you this - it would double their liabilities.
Write your policy in trust. Writing the policy in trust means that the beneficiaries of your life insurance policy will not have to pay inheritance tax on the gain. Writing a policy in trust is a relatively simple process. A real expert will be able to set up a policy in trust free of charge.
If we take the example of an average young couple (and assume they are non-smokers) this is how much their policy will cost:
Mortgage Chantelle Preston
£80,000 £5.58 £6.92
£90,000 £6.07 £7.51
£100,000 £6.32 £8.10
£110,000 £6.80 £8.71
£120,000 £7.29 £9.32
I'm sure you'll agree with me that this is very cheap indeed - but more importantly, it serves the needs of the people involved.
In summary, use these rules to make sure that you get the best value for money life insurance available.
http://www.uncommonadvice.co.uk
Article Source: http://EzineArticles.com/?expert=Ross_Taylor
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