Amidst all the news chaos this week surrounding the general election (and local council elections in case anyone has forgotten!) and ongoing chaos from the volcanic ash cloud in Scotland at least, the financial world keeps on ticking away in the background and this post relates to the reasons why you should remortgage now – or live to regret it!

It has been a great year so far for variable rate borrowers, as the Bank of England Base Rate continues to stay at an all time low, and variable rates linked closely to that rate staying low as well.  However there are a number of key reasons why that strategy is about to come unravelled, and why you need to remortgage now!

Key Reason One – Rising SVRs!

As I have explained before, the variable rates lenders change when you come out of a fixed rate period is known as the Standard Variable Rate.  These can be changed at any time at the lenders discretion and are not necessarily only linked to the Bank rate (although you can be sure that when the bank rate does go up, so will this rate!)

SVRs on are on the increase across the board, with some lenders charging upwards of 10% already.  So time to look at a fixed rate now…

Key Reason Two – Fixed Rates Won’t Get Any Cheaper…

A simple one to figure out here – fixed rates for different levels of loans have been low for some time now, and with the prospect of rising interest rates later in 2010 and 2011 as the economy starts to recover in earnest, they won’t get any cheaper.  If you pass up a god rate now, you could well live to regret it later.

This is important as whichever party has won the election by the time you read this will be taking drastic action to combat the budget deficit, so rates will have to rise…

Key Reason Three – Switch and Overpay.

One of the biggest favours you can do yourself is to overpay to your mortgage to the extent that you can afford to.  It goes without saying that the faster you can pay off any loan, the better off you will be, and mortgages are no different.  If you can switch to an offset (if that is appropriate) or a fix that allows overpayment – many good deals allow overpayment of up to 10% without penalty – then you can finish your mortgage years early, and save thousands…

Key Reason Four – There Might Be less Choice in the Future…

The banks that were helped by the taxpayer have already conceded that they will struggle to repay loans from the taxpayer within the current timescales, i.e., by 2014 in most cases.  This means that lenders could struggle to offer decent loans as well a repay this debt, unless they get a lot of help from the next Government.  So 2010 might well be a great year (in relative terms) for re-mortgage deals.

Key Reason Five – Save Money!

This might seem an odd thing to say given the low SVRs, however with these rising and particularly with great deals out there for borrowers with either large deposits or equity in their properties, over the next couple of years, you could save a packet!

Drop on over to the main site at www.southendremortgage.com and see how you can help you save!

Last week I talked about the key types of insurance and what you need to be able to protect yourself and your possessions.

This week, I will expand on that a bit by letting you know what else is out there, what it covers and the best way to approach it.

Last week I covered basic life assurance, critical illness, and buildings and contents insurance.  You’ll remember that these were the categories of insurance that I mentioned were essential.

However that isn’t the end of it at all – there are other types of cover too that can be really useful and are great additions to your armoury.

Mortgage Payment Protection Insurance.

In simple terms, you can insure your mortgage payments (up to certain limits) against the risks of accident sickness and unemployment. 

This type of cover belongs to the payment protection family of insurance, and has had a really bad press in recent years.  There is one simple reason for this – mis-selling.

Any product, particularly a financial one, can be dangerous if mis-sold.  Payment protection was heavily sold by banks and retailers across the board along with loans, credit cards and store cards, in some cases it appears without regard as to whether it was ever suitable for those they were selling too.

A number of fines and censures followed, and some big household names were involved.

However, that doesn’t mean that this type of cover can’t be incredibly useful if correctly bought. 

Because it is important to get this right, my suggestion would be to talk to an independent broker. That way you shouldn’t get someone who has a bias towards one provider, and you’ll get a good look at the market.

Income Protection Insurance

This is a variation on a theme – here you can insure your income against accident sickness or unemployment (again subject to certain limits).  This can be an excellent product when correctly used.

Again it is really important to get this right, so you don’t waste your money on cover that won’t (or can’t) ever pay out.

I know I keep banging on about this, but talk to a good independent broker – it can be the difference between getting this right and getting it wrong with potentially disastrous consequences…

Next week I am going to indulge myself a bit and actually write an entire post about independent brokers and why you should have one on your side…

A slightly different topic this week…I am going to talk about insurance and how to protect yourself and your family.

Even though the economic signs are improving, in the real world, things are tough for many people and their families.  Jobs are still a little scare, availability of credit is weak, and I think we all realise it will be a little while before things start getting noticeably better.

However, there is something very important to remember here, and that is insurance.  Specifically, insurance for you and your property and your family.

The reality is that for many of us, household budgets are tight, and we’re all looking for ways of cutting back, of maybe eliminating what might be seen as unnecessary spending (or as a friend of mine called it, dead money).

Insurance premiums are often seen as “dead money”.  After all what do you actually get from your insurance?  Its not an investment, it doesn’t grow in value, or pay you anything each month or each year, so what’s the point…

After all, illness, accident, fire, a burglary – that’s stuff that happens to other people right…?

…Big mistake!!

These things do happen to people you know and they can happen to you, even with the best will in the World.

So what insurance should you have?

Well, the answer to that is as much as you can properly afford, but at least the following:

Basic Life Insurance

At least enough to pay your mortgage if you or your partner dies. This is cheap and basic cover and is essential. DO NOT rely in work related schemes such as the ones offered with company pensions – because if you leave (or lose) the job, you’ll lose the cover as well.

Buildings and Contents Insurance

Enough to protect your home and the goods in it.  This is a highly competitive market and there are many insurers competing for your business, as you will probably have seen on TV.  The best way to get a quote and have the market explained clearly is to use a good independent broker.

Critical Illness Insurance.

Although this is more expensive, this is really important cover to have. The best way to approach this is to see how much cover you need (usually enough to cover your mortgage) and get a quote for that.  If that is unaffordable for you, reduce the cover until you can afford it.

At least that way, you have something…you are better off having some cover than none at all.

This is especially important if you’re younger as you are much more likely to suffer a critical illness cover than you are to die (something like five times more likely in your twenties (but don’t quote me on that )

If you have a family, some policies even include cover for your children.  Again a broker can help you through this potential minefield.

Also you can protect your income and also protect yourself against accident, sickness and unemployment.

More to follow next week…in the meantime, get in touch and let me know what you think!

Following on from our last post, about the European Union’s crazy idea to prevent insurance companies from including an applicants sex in the premium rating process (which unsurprisingly was passed, and now comes into effect in December 2012), we wanted to talk some more about insurance, in particular life insurance.

In simple terms life insurance (also know as life assurance) is insurance which is taken out often in connection with a mortgage and guarantees to pay out a certain amount if you die during the policy term, assuming you have kept the premiums up to date.

There are two main types, level term assurance where the sum insured (and therefore the amount paid out if you claim) stays level, and decreasing term assurance, where is reduces during the term of the policy, usually in line with a decreasing debt, such as a repayment mortgage.

It is pretty much as simple and as basic as that.

The main misconception is that life assurance is very expensive, when in actual fact for a healthy, non smoking person, it can be under £10 when younger, and not much more for older people either.

With recent changes in rates, life insurance is cheaper than it has been for a number of years. In fact rates have been reduced just this last week, making a policy better value for money than for some considerable time.

According to research from Sainsbury’s Finance, life insurance premiums have fallen for three quarters of people in the last 12 months.

Sainsbury’s looked at the risk profile of 38 types of applicant, and analysed how premiums have changed since 2006.Interestingly, they ascertained that whilst the cheapest premiums are getting cheaper, the gap between cheapest and most expensive premiums is still substantial.

This just serves to highlight the need to shop around when you are looking at a new deal.As you know, a very effective way to shopping around is to use an independent broker (like ABC Mortgage Services/Southend Remortgage!)

The good news for you is that with the heavy competition in the market at the moment, the insurers will inevitably have to undercut each other to secure your business.

The cloud on the horizon, as per our last blogpost, is that life premiums for women (which are currently cheaper as they statistically live longer and are therefore a better risk) are set to go up at the end of next year.

Insurers are likely to spend the next few months re-working prices, which could make for some interesting quotes!

So on that basis, whilst prices are low, take advantage now and make sure you’ve got the cover you need.It will almost certainly be cheaper than you think…

So what on Earth is “Quantative Easing” and how does it affect you?

The Government announced today that they had identified the biggest barriers to economic recovery was the lack of lending to consumers and businesses. Clearly they are about a year behind everyone else in working that out, but at least they got there in the end!

As a result, the Government is effectively printing new money in order to buy up Government and corporate bonds, which in turn should release more money into the economy to allow banks to offer some sensible lending to the wider population (i.e., us!)

So far £125 billion has been released, and today a further £50 billion is being released, which is in addition to the Governments original figure of £125 billion.

As far as eding is concerned the lack of it is certainly holding things back for people wanting to re-mortgage or move house, so a move towards more sensible and sustainable lending is definitely welcome.

We’ll just have to wait and see!

Here at Southendremortgage.com, we’re big Michael Jackson fans, and have been saddened by his untimely death.

This was also hot on the heels of the death, also by cardiac arrest, of a friend of ours, at a very similar age.

It has really brought home to us how quickly your life can change in both good and bad ways. Whatever life throws at you, you have to be prepared.

That also means protecting your loved ones if something unexpected should happen to you. Don’t leave it to the fates, make sure your family are protected by suitable insurance. There can be few things worse than losing a loved one and then losing the roof over your head as well.

It may sound like an extreme example but trust me, it happens and more often than you’d think.

So the bottom line is – get insured, get a will – get peace of mind. You owe it to yourself and your family.