Conditional selling occurs when an estate agent strongly encourages a home buyer to use their in-house services. This could be a recommended mortgage broker, solicitor or financial advisor, for example.

Estate agents may claim that choosing to use their in-house providers will speed up the process of buying a home, make it more cost effective or both. But this is not necessarily true.

Why is Conditional Selling a Problem?

Conditional selling can limit your options. Most estate agents offering in-house mortgage options tend to work with a small number of brokers. This can limit the number of options available, which can lead to them paying more for their mortgage.

Conditional selling is dishonest. Estate agents who work in this way will often disguise the fact that they stand to benefit from a buyer choosing their in-house services in the form of commission or bonuses paid either to the estate agency or to the agent themselves. This can encourage estate agents to recommend products or services which are best for them, not you.

How Can You Protect Yourself from Conditional Selling?

1. Educate yourself. Find out about the local market conditions and estate agency practices.
2. Ask questions. When discussing a property with an estate agent ask whether the property is subject to a sale clause. Once your offer has been accepted ask whether it has been truly accepted by the seller, or whether there’s a risk of being outbid at a later date.
3. Be ready to buy. Having a mortgage agreed in principle can put you in a better position as a buyer and reduces you the likelihood of you accepting financial services recommended by an estate agent.
4. Act cautiously but with confidence. If you find a property you want act quickly to secure it, but don’t be pressured into accepting services offered by the estate agent. Prioritise getting the best deal.
5. Get independent advice. Working with a conveyancer or solicitor who is not connected with the estate agent can help protect you from underhand tactics.
6. Use an independent mortgage broker. You don’t need to use the broker recommended by the estate agent. Choosing to work with an independent broker your trust can ensure you get better advice, access to a wider range of lenders and ultimately a better deal.

How Choice Mortgages Can Help

As an independent broker, Choice Mortgages has access to a wide range of mortgage lenders. We work hard to get you the best deal.

Our team has decades of experience helping first time buyers and home movers. We’re here to help make your property dreams come true, and will always offer our clients the best advice for their particular circumstances.

The post Beware of Conditional Selling appeared first on ChoiceMortgages UK Ltd.

The UK insurance sector is the fourth largest across the globe, with investments in the region of £1.8 trillion and employing 300,000 people. Additionally, over 40 million UK adults have some form of general insurance, from buildings, contents, and combined home insurance policies to life insurance.

Why you should consider shopping around

Knowledge is power, and armed with the right information, you’re already one step ahead. It’s so easy to feel overwhelmed by the many products available, and with all things technology, the online space can add to the confusion. 

Having said that, it’s so important that you wholly understand your options and that your choices are right for your budget and circumstances. 

We’ve broken the general types of insurance down into bite-size chunks that are easy to digest. Remember, a great reason to switch policies is that you could be underinsured in your current policy. For example, your personal circumstances may have changed. Things like your health status, your employment, or if you now have children. It’s also worth knowing that newer policies could come with better coverage and support services, due to products and consumer demands changing over time.

Life insurance, also known as life assurance

Life insurance is a financial safety net for your loved ones in the event of your death. It can provide a lump sum or regular payments to your dependents, offering reassurance that they will be cared for if you are no longer able to provide support.

The payout amount is determined by your chosen coverage level, allowing you to specify the required sum and coverage duration. You can opt for a lump sum or guaranteed/reduced payments. Alternatively, you may choose monthly payments to cover specific expenses like mortgage, rent, bills, or credit commitments.

It’s important to consider how a life insurance payout may impact means-tested benefits for your dependents. Having life insurance provides peace of mind, especially if you have a young family, your partner relies on your income, a family member resides in a mortgaged property you support, you wish to cover funeral expenses, or you have substantial personal debt.

Critical illness

Critical illness cover is a type of insurance that pays out if you are diagnosed with specific medical conditions or injuries outlined in the policy, such as stroke, heart attack, cancer, multiple sclerosis, or total and permanent disability. It’s essential to note that critical illness cover is distinct from life insurance, although they are sometimes combined together.

This coverage provides a benefit upon diagnosis, and once the claim is settled, the policy ceases. The received benefit is flexible, allowing you to use it as needed – whether to ease financial pressures during treatment, settle debts, take time off work to be with a loved one, pursue innovative treatment, or create a memorable experience.

Some policies may offer smaller or partial payments for less severe conditions and, if chosen, provide a lump sum if one of your children is diagnosed with a specified condition.

Why consider critical illness insurance? Critical illnesses can strike unexpectedly; for instance, in the UK, someone is diagnosed with cancer every two minutes, and every five minutes, someone experiences a heart attack or stroke. Critical illness cover helps financially safeguard you and your family, providing relief during challenging times.

Consider exploring if:

• You lack sufficient savings to rely on
• State benefits are insufficient to replace your income in case of long-term sickness or disability
• Your employer does not offer enhanced sick pay
• There is a family history of serious illness
• You want the ability to take time off to care for children diagnosed with a specified illness.

Income protection

Income protection cover, also called permanent health insurance, is a policy designed to provide financial support if you cannot work due to injury or illness. Typically lasting until retirement, death, or your return to work, it offers flexibility with short-term options available for one, two, or five years at a lower cost.

The coverage is linked to your gross earnings, usually ranging from 50-75% of your income, and the tax-free monthly benefit is paid upon a valid claim due to illness or injury.

When setting up the policy, you’ll determine a deferred period (4, 8, 13, 26, or 52 weeks) and specify the required benefit amount and duration, whether full-term or short-term.

Why consider income protection insurance? Having this coverage ensures peace of mind for you and your loved ones, offering financial security in the face of accidents or sickness. Income protection helps:

• Provide a regular income during illness or injury
• Meet financial obligations
• Enhance overall financial security
• Offer peace of mind and protection for your family
• Access specialised support services
• Focus on recovery without added financial stress

Redundancy cover

Redundancy cover is here to provide reassurance in case you face job loss. If you experience redundancy, managing mortgage payments and household expenses can be challenging. This coverage typically offers a monthly income, starting after four weeks, and extends up to a maximum of 12 months.

Home insurance

There are three main policies: buildings insurance (this protects the structure, fixtures, and fittings), contents insurance (this covers all your belongings, clothing, furniture, white goods, jewellery, electronics, etc.) or combined buildings and contents insurance. It is important to note that if you have a mortgage, buildings insurance is mandatory and will be a legal requirement by the lender.

You should also consider additional features, such as accidental damage to buildings, damage to contents, individual high-risk items, personal possessions away from the home, legal cover, and home emergencies.

There are a range of options and excesses that you can choose from. Need a quote?

Landlord’s insurance

Landlord’s insurance is a special type of coverage that’s crucial for those renting out their property. It gives peace of mind by safeguarding your home and belongings from potential loss or damage. Tailored for buy-to-let investors, this insurance offers coverage based on the number of bedrooms. You can also opt for additional protections like legal cover and rent arrears protection.

Find insurance with ChoiceMortgages UK Ltd

At ChoiceMortgages UK Ltd, our advisors have access to all insurance providers and provide unbiased, free advice. We will help you find the best insurance and help you safeguard the people you care most about. Call us at 01780 480600 for professional advice that won’t cost you a penny.  

The post Should I Change My Insurance? appeared first on ChoiceMortgages UK Ltd.

With up to 77% of buy-to-let property owners choosing to house their properties under such limited companies rather than their personal investments, it is beneficial to know the differences between the two options. In this blog, we will look at how your property investments can affect your profit margins by considering these specific points: 

• Tax differences between limited company-owned properties and personally-owned properties 

• Personally-owned properties 
• Company-owned properties
• Benefits of incorporating a mortgage broker

Tax differences between limited company-owned properties and personally-owned properties

Investing in property is trickier than it used to be with the increased regulation, decreasing tax relief and stamp duty changes, many property investors are noticing massive reductions in their rental revenues. 

This is where the option of owning a property investment company becomes attractive, as with the right business structure, your tax payments can be reduced by up to 26% – putting more of your profit into your pocket. Let’s break this down further.

Personally-owned properties

While the tax on personally-owned properties is fairly simple as you would deduct your allowable expenses from your rental income to obtain your profit, it is the profit on which you pay that income tax at your regular rate. Unfortunately, you can’t claim your mortgage interest as an expense on such properties. 

If you are a basic rate taxpayer, income tax is at the basic rate. Of course, this is a very different conversation for higher ratepayers with personal income taxed at a higher rate, who will, in turn, be liable to pay even more tax on their profits. This brings us to option 2, company-owned properties.

Company-owned properties

There is much more flexibility on property tax owned by limited companies. Much like the personally-owned properties, you must deduct the allowable expenses from the rental income to obtain the company profit. However, in this case, mortgage interest payments are able to be offset and will reduce the profit, thus decreasing the amount. In addition to this, you pay corporation tax rather than income tax, and by keeping the profit within the company for company growth, new purchases, and the like, you won’t have any more tax to pay. But how do you access this profit for personal use? 

There are three options here: 

• Salary 
• Dividends 
• Pensions 

Each option comes with its own tax requirements and can be beneficial in the long run. 

So, which of the two options is right for you? This is where you incorporate a mortgage broker.

Benefits of incorporating a mortgage broker

Suppose you are within a lower tax bracket; you will likely be suited to opt for personal property investment. However, suppose that you will exceed the minimum threshold of the lower tax bracket within a year, it will be advisable to consider the limited company option as your tax liability can jump from a basic rate to a higher rate quickly. 

Through detailed analysis and understanding of your personal circumstances, a mortgage broker can advise on the best path for you to take. It may begin on the personal property investment path that grows into a limited company or the other way around. 

Be sure to consult with your trusted broker sooner, as you may find that the right option can increase your rate of returns. Consulting an accountant for clarity on the exact tax liability may also be worthwhile.

You should know that with us, your individually-selected mortgage broker is more than just a salesperson, but someone you can turn to for help and clarity, all with personal confidentiality. 

So ask us all you wish to know about your policies, mortgages, and insurance. This is what we do. We provide independent mortgage and insurance advice and take pride in high-quality customer service and satisfaction. 
We’re here to help you, and you can contact us here for a non-obligatory consult.

The post Property Investments: Limited company versus Personal Name appeared first on ChoiceMortgages UK Ltd.

What do I need to place a policy in trust?

You need to consider who to nominate as beneficiary and who will act as the trustees.

Nomination of beneficiary

The life assured will be able to nominate beneficiaries to benefit from the proceeds and the percentage of the money that each will receive. This ensures that the proceeds of a death claim go directly to the people the client wants to benefit. It is important to check with the provider whether there is a limit to the number of beneficiaries.

If the policy incorporates critical illness cover, it is important to ensure that by placing life insurance into trust, the proceeds of any claim relating to either terminal illness or critical illness will still go directly to the life assured.

Nomination of trustees

Once you have chosen the beneficiaries you need to nominate one or more trustees to manage the trust until the beneficiary is ready to inherit. The trustees, ideally a solicitor, family member, or close friend, is responsible for ensuring the money set aside goes to the correct people after you have passed away. Trust deeds are agreed upon and signed by all parties, setting out the terms of the trust.

Can trusts be changed?

Life policies are often long-term contracts and the clients’ circumstances may change. Not all trusts are flexible so you need to make sure that the trust you have can be altered in the future. Where something changes and the client wishes to either change the beneficiaries or amounts allocated to them, this can then be done by contacting the provider. Any changes are usually required in writing, as opposed to being allowed online. You will also need the signature of any trustees. However, it is best to check with the insurance provider about the process involved. 

Making trust easier

Much work has been done by insurers and a small number of providers now allow online and sometimes signatureless trusts. However, not all offer this facility, and therefore a paper trust document will be required.

We’re here to help

If you are unsure whether to write your life insurance in trust, talk to us. It is important you understand the options and any tax implications if you move a life insurance policy into trust.  We can discuss your circumstances and give you the appropriate advice.

Please contact us on 01780 480600.

The post Should I put my life insurance in trust? appeared first on ChoiceMortgages UK Ltd.

Covid-19, rising oil prices, unease in the Middle East, and being on the brink of another World War have created vast amounts of financial stress, worry over job status and overall health. Life can change drastically overnight, and considering the current situation now, it has become crucial to keep existing policies more than ever. Insurance offers stability for yourself and your loved ones in a time of the unknown. 

What is insurance?

Whether it be life cover, critical illness cover or income protection, all insurance policies were taken for a reason.

Life insurance, also referred to as life assurance, allows you to make sure your family is protected in the event of your death during the policy term. Most life insurance policies are designed to pay a cash lump sum to your nominated members. This can help with funeral costs, mortgage repayments and additional financial security for a family. 

Critical illness cover ensures that you and your family remain protected if you are diagnosed with a critical illness during the policy term. This policy is designed to provide a lump sum that can be used to alleviate the financial pressures whilst coping with the emotional decisions of treatment, care, transport, and travel arrangements. Whether you choose to repay your mortgage, use funds to replenish the loss of income, or seek pioneering treatment, knowing that there are options helps your family at a very stressful time.

Income protection is designed to provide replacement income if you cannot work due to an accident or sickness. A monthly benefit is paid after a ‘deferred’ or waiting period. Then, depending on the terms, the benefit would continue for a specific time.

I can’t afford my insurance anymore; should I cancel it?

You are not alone if you have considered cancelling your policy or if you think your premiums are too much. However, we strongly recommend that you keep any existing insurance as you will immediately lose all benefits on cancellation. 

Insurance commonly has the flexibility to stick with you for life while accommodating to the changes that occur throughout. Check whether there is a ‘waiver of premium’ on your policy, whereby the provider maintains premiums if you cannot work due to an accident or sickness. There might be an option to reduce the sum assured or make adjustments to the cover, thereby temporarily reducing the premium.

Consider the importance of the insurance and what protection it gives to you and your family. What happens if you cancel? There would be no pay-out should anything happen. You might also have other features within the policy, such as a 24-hour GP helpline, counselling services, medical professionals, or lifestyle and nutritional advice. These are invaluable and will help you and your family in ways outside of financial support. 

Can I cancel my policy and reapply later?

Yes, you can, but it is essential to understand that a new application will be fully underwritten. Many factors dictate an insurance premium: age, smoker status, medical history, and general industry changes.

When you apply for a new policy, you will be older, and sometimes this can be a considerable number of years. Premiums increase with age. You may have changed your smoker status. Your medical history may have changed. As life goes on, maintaining our health can sometimes be out of control. For example, suppose you have recently been diagnosed with a health condition you previously didn’t have. In that case, this could affect the issued terms, whether exclusions are put on the policy or premiums are rated and increased due to the associated risk. 

Changes within the industry may also affect the products available and how the type of insurance is costed. 

Guaranteed insurability 

Guaranteed Insurability Option enables your policy cover to be increased without further medical underwriting, regardless of whether the circumstances in life have changed – such as a sudden illness that was not originally on the policy. 

Having a guaranteed insurability option makes it easier to adjust your cover when you need it. For example, an increase in mortgage, the birth of a child, or a house move are just some reasons that clients have needed to use the guaranteed insurability option. Therefore, it is vital to understand whether this feature is available on your policy. 

Each provider will have its own terms regarding guaranteed insurability, but typically it is an amount or percentage relating to the original sum assured. Again, this would be permitted without further medical information or disclosure.  

We are here to help

If you are affected financially due to the ongoing circumstances or are just unhappy with the premium you currently pay, please contact us before cancelling.

We want to make sure we can help you understand all the options available to you, ensuring you are financially resilient should an event occur.

We are independent brokers and advisors, and have access to all insurance providers. We will not charge you any fees for advising or arranging insurance for you. It is important to us that we take the time to understand your requirements to help provide a recommendation that is right for you.
We’re here to help you, and you can contact us here for a non-obligatory consult.

The post The importance of keeping existing insurance policies in place appeared first on ChoiceMortgages UK Ltd.

Business owners are quite often focused on the day to day running of the business and don’t always have the time to think about the what if’s.

Who should consider this?

Whether you are a sole trader or a director of a limited company, there is always an event that can happen. You should consider all types of insurance for your business. 

Areas of business protection

Key person protection

A key-person is an individual in your business whose skill, knowledge experience, or leadership contributes to the financial success of a business whether that be directly or indirectly. If their death would lead to a loss in profits, loss of important contacts, customers losing confidence in your business, or even the time it takes to recruit and train a replacement, it might be worth thinking about protecting your business against this.

Business loan protection:

In a recent survey carried out by Legal and General, it highlighted that 65% of business owners have some form of business debt. A large proportion of businesses do not have cover in place for this.

Share Protection

Would the loss of a business owner in your company destabilise your business? Ultimately leading to financial difficulties.

With no cover in place, what would happen to the deceased owner’s share? The family may become involved in the day to day running of the company or even sell their share to a competitor.

Share protection allows the remaining partners or directors to remain in control of the business following the death of a business owner. It is designed to provide funds to the surviving owners to be in a position to purchase the deceased owner’s share of the business. This ensures that the surviving owners keep complete control of the business.

Relevant Life

A relevant life plan is a term assurance policy taken out by an employer to provide an employee with a lump sum if they die or are diagnosed with a terminal illness. It can be treated as an allowable business expense so the business would qualify for corporation tax relief. There is also no additional tax or National insurance to pay. Like all insurance plans, exclusions and limitations apply so always speak to us to see whether it’s the right path for you.

We’re here to help

If you are unsure whether business protection is right for you or are uncertain whether it will benefit your business, please call us to discuss the options.

Source: Legal and General state of the nation’s SME’s report.

The post What is business protection? appeared first on ChoiceMortgages UK Ltd.

With recent events and considering how the world is changing rapidly, it would be no surprise if your personal and financial circumstances have changed.

Therefore if you haven’t already, it is vital that you review all aspects of your finances and that includes reviewing your protection insurance, to make sure your policy provides adequate cover for your changing needs.

Underinsured

If you don’t review your provisions and make the necessary changes, any pay-out you do receive from a claim may not be sufficient to cover you and your family’s needs if you were to die or if you are unable to work due to illness.

For example, if you took out life insurance covering you for a certain amount, you may now have children, you may have moved to a larger house or you may even have additional debts. Therefore, the lump sum paid out to your family upon your death would no longer be sufficient to sustain their lifestyle, leaving them facing financial hardship and emotional suffering.

New policies offer better protection

Like any industry, the insurance and protection market has evolved over time. Modern policies can offer you better protection and more extensive cover.

When comparing a critical illness policy sold in 2007 with one sold in 2017, the more modern policy may have better claims wording, provision for part-payment, and other advantages.

If you have simply been paying your premiums on the same policy for years, it is likely that as well as facing the risk of being underinsured, you also won’t be benefiting from the kind of comprehensive cover offered by today’s policies. 

You may be losing out on value-added services and in certain circumstances, you may have exclusions that if medical details have changed, may be able to be removed or you could benefit from non-smoker rates.

We’re here to help

With so many different types of protection insurance on the market, it’s not surprising that many people just stick with the cover they have.

Here at Choicemortgages, we have a team of experienced advisors who can help ascertain what cover you need, what protection you have, and whether there is a benefit to changing your insurance.

Contact us on 01780 480600 to discuss the options available.  

The post Should I change my insurance? appeared first on ChoiceMortgages UK Ltd.