Further to the Chancellor’s announcement regarding the mortgage industry’s support for homeowners who are experiencing financial issues due to COVID-19, lenders representing banks, building societies and other specialist lenders have come together to announce additional support for homeowners and residential landlords.

These include extending the option of a payment holiday of up to three months to residential buy-to-let landlords who have tenants who are experiencing issues with their finances, as either a direct or indirect result of Coronavirus, as well a three month moratorium on residential and buy-to-let possession action to start from 19 March 2020 helping provide customers with reassurance that they will not have their homes repossessed at this difficult time.

Commenting on the package of measures, Stephen Jones, UK Finance CEO, said:

“Monthly mortgage payments tend to be the largest outgoing for the vast majority of households and lenders want to reassure both homeowners and landlords who have tenants who may be affected financially that the industry is working hard to put measures in place to support them during these uncertain times.

“In addition to the industry’s support for residential homeowners, mortgage lenders are extending the same support to buy-to-let landlords who have tenants experiencing issues with their finances as a result of COVID-19 and the options include a payment holiday of up to three months.

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“For those customers already experiencing financial difficulty, lenders have also agreed a three-month moratorium on residential and buy-to-let possession action. The industry wants to reassure customers that they will not have their homes repossessed at this difficult time and therefore, these measures will start from tomorrow (19 March 2020).

“All customers who are concerned about their current financial situation should get in touch with their lender at the earliest possible opportunity to discuss if this is a suitable option for them.”

Robin Fieth, Chief Executive of the Building Societies Association (BSA) said:

"Building societies are acutely aware that this is a worrying time for those with a mortgage or who pay rent as both typically account for a significant proportion of household expenditure.  Now is a time for lenders to be flexible. The steps being taken by the industry today will offer some breathing space for those affected by the Covid-19 situation whether directly or indirectly.  The best first step advice remains to get in touch with your lender or landlord."

With ten-year fixed-rate deals now at their lowest ever levels, it may be a good time to consider remortgaging.  According to Moneyfacts, rates for decade-long fixed-rate mortgages have dropped to a 2.76% average in the past year.

With these recent drops, long-term fixed-rate mortgages may be growing in popularity. With this growing popularity in a period of great uncertainty, people are wondering whether to remortgage or whether to seek alternative financial solutions.

Also, reassuringly in recent times, with the Financial Conduct Authority (FCA) placing strong emphasis on compliance for mortgage and financial advisors with the likes of the Senior Managers and Compliance Regime as a customer, you can be more assured that the advice you receive is more trusted. In previous times, where ‘sales tactics’ may have been deployed more often than not as a primary strategy, rather than explaining the product, things were often confusing for many customers.

What is Remortgaging?

In its most basic term, remortgaging is the process by which borrowers switch from their current mortgage deal onto a new one. This is typically done to reduce monthly repayments, or to borrow more money against the property. Typically, mortgage providers will offer attractive initial rates to draw borrowers in. However, these rates will often only last for a few years before the provider puts them onto a Standard Variable Rate (SVR).

By remortgaging, homeowners can borrow more money against the equity of the property. This money is typically used to make home improvements, which can subsequently increase the value of the property. Whilst remortgaging can be a great way to access finance, it does mean paying more back in the long run. Therefore, it’s important that when considering remortgaging you are fully aware of any and all costs that will come along with this.

Should I Remortgage Now?

If your current deal is coming to its end, it may be good to consider a remortgage. There are a whole host of reasons why people decide to remortgage, some of the main ones being those as follows:

• To reduce monthly repayments
• To borrow a larger sum of money
• To be able to make overpayments

People may also be considering to remortgage due to the great deals that are currently on offer throughout the UK, with 10-year fixed-rate mortgages now being an average of 2.76%, with the lowest in the UK being a mere 2.2%. Whilst the long-term, fixed-rate mortgage deals do often some with higher rates than the standard fixed rate deals of two years, these have been discovered to have an average difference of only 0.36%.

With such low rates for long term mortgage deals, now may be a better time than ever for borrowers to remortgage. However, before going through with a remortgage, it’s important to understand all charges that may apply to the switch, such as exit fees and early repayment charges.

With such low rates for long term mortgage deals, now may be a better time than ever for borrowers to remortgage.

When Not to Remortgage

Remortgaging can be a great way for people to borrow more money against their property, however it isn’t always the best option for this. For those who are already happy with their current deal, or perhaps have a long while left on their current plan, remortgaging may not be the best move.

Thankfully, there are some alternatives to remortgaging where borrowers can still access finance secured against their homes, one of which being a second charge mortgage.

What is a Second Charge Mortgage?

A second charge mortgage, commonly referred to simply as a second mortgage, is a type of loan homeowners can take out. This loan is secured against the equity people have in their property. Essentially, as the name suggests, it is a second mortgage attached to your property.

These loans typically range from £10,000 to £2.5 million for a period of 3 to 25 years. They can also usually lend higher amounts of money than remortgage providers. Due to their diverse nature in size and length of term, second mortgages can be a great means of finance for numerous different things.

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What is a Second Charge Mortgage Used For?

Second mortgages are usually taken out for a variety of different reasons. People use them to make improvements to their homes, pay for their child’s school fees and more. Another very popular reason for taking out a second mortgage is to help grow a business or commercial venture.

For example, you may have a retail business whose premises need updating. Although a retail design agency will cost the business owner more money, updating the shop may provide a very strong return on investment (ROI) through a better retail experience and better presence at trade shows and exhibitions and so a lender may look positively upon this and be willing to lend against a property.

Second charge mortgages can also be used for debt consolidation. However, this may mean paying more back overall in interest. It can also make losses more severe by converting unsecured loans into secured loans and using your home as collateral. If repayments cannot be made, borrowers could face having their home repossessed.

You picture going to a bank and filling out a pile of forms, then waiting on the bank to approve or decline your loan. Your imaginary self is probably getting a loan to finance a car or home, or to start a business. Maybe it’s a last resort to get through a tough time.

However, while many banks have retained that very same process, this is no longer how loans have to look. On the contrary, there are a number of different kinds of loans today and they are far easier to get.

The reason for this is that banks are no longer the best place to get a loan. Rather, there are many loan companies that have sprung up around America. Some of these companies are predatory and should be avoided at all costs. But others have really good options that won’t get you into a perpetual cycle of debt.

Aside from providing different kinds of loans on different terms, these companies have better embraced the internet than banks have. You can get some loans immediately with just an online application.

Aside from providing different kinds of loans on different terms, these companies have better embraced the internet than banks have. You can get some loans immediately with just an online application.

If you're interested in getting a loan for whatever reason, you’ll want to know what kind of loans are available.

Most Common Loans

While you can get a loan for just about anything, there are particular categories that cover most needs and are most popular.

Student Loans

Those who are entering college or have children doing so will know all about the struggle of student loans. There are complicated hoops to jump through to get the best possible option, as well as the specter of long-term debt. It’s certainly not ideal to be starting your career off at a deficit.

However, unless the political reality changes drastically in the near future, student loans are here to stay. Only those who have disposable wealth can afford to pay for college directly. The rest of us have no option but to apply for a student loan.

Student loans do provide better rates and repayment terms than other types of loans, as the lenders understand the position from which the loanees are starting. The best loans are generally federal options. You might qualify for a subsidized loan, which helps put you in the best possible position from the start.

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Small Business Loans

Today it is easier to start a business than ever before. For some, starting their dream business requires nothing more than a computer and internet connection. By creating a simple website, you could start getting contracts as an independent entrepreneur. However, many businesses still require capital to get off the ground. For this, there are many different kinds of small business loans.

Going the traditional route with a bank is less than ideal, as the paperwork mounts up and you are offered rigid terms. Consider going with a loan company that offers good loans with reasonable rates. These companies don’t necessarily ask too many questions, as they recognize the idea of a fixed business plan is antiquated in a time in which businesses survive only by adapting.

One of the best options is taking out a business loan with a specialist business loans provider like OnDeck. With OnDeck, you can get through the process in just ten minutes and have the money in your account a day later.

Personal Loans

Personal loans cover just about everything not included in traditional business, student, or asset loans. You can use a personal loan for whatever you need, including medical needs, plastic surgery, once-off events, and to get you through a tough period. Personal loans are generally unsecured, so you do not need any assets in order to apply.

One of the advantages of personal loans is that you can apply even if you don’t know exactly how much you'll end up using. Costs can build up, and the last thing you want is to get a loan that ends up covering only part of the expenses.

You can even get personal loans if you have bad credit, although you can expect to pay high insurance rates on these loans as you are considered high risk. Nonetheless, if you have a credit history that won’t go away, you can use personal loans to rebuild your score.

A good option for personal loans is SoFi, who have been around for a while and have a very good reputation.

Final Tips

Getting a loan today should look nothing like getting a loan decades ago. While the banks haven’t yet caught up to the twenty-first century, there are many companies out there who will provide the sort of loan you need. Stay away from predatory options, such as payday loans, which put you in a position from which you have a high chance of falling.

According to Alan Donnelly, Head of Financial Services at Salesforce, this year financial services will continue to move towards a different way of doing business; one that harnesses digital services for the good of the customer, and that will increasingly lead to partnerships between new challengers and traditional banks.

Below, Alan explains for Finance Monthly that as banking customers increasingly expect highly convenient and personalised experiences, they are in return willing to commit to wider and longer relationships.

In 2020 we can expect to see the emergence of new ecosystems that will blur the old and the new, as well as examples of financial services organisations of all shapes and sizes working together.

Challenger vs traditional bank

The current financial services market has seen challenger banks pitted against traditional banks. The wider FinTech world cannot be ignored either. Challengers are growing due to the agility, flexibility, ease-of-use and convenience of their platforms. They are digitally native, and designed from the bottom-up for a customer base which is becoming increasingly reliant on mobile.

But these young organisations do not necessarily have the wealth of data that traditional banks do. Incumbents possess information from individual accounts, gathered over many years, and have insights into how entire households spend and save – including substantial financial decisions such as taking out a mortgage.

These young organisations do not necessarily have the wealth of data that traditional banks do. Incumbents possess information from individual accounts, gathered over many years, and have insights into how entire households spend and save – including substantial financial decisions such as taking out a mortgage.

Traditional banks are becoming more agile and incorporating mobile more. Some, such as Barclays, Santander, RBS and HSBC, are evolving towards banking apps in a bid to compete with the challengers.

Customer journey mapping

This backlog of data that the traditional banks have on both the individual and the household allows them to create a comprehensive picture of the customer. This customer journey map is a visual representation of every interaction a customer has with their finance services provider throughout their lifetime. It tells the story of the customer’s experience as they progress through all touch-points between customer and financial institution, from initial contact and purchasing, to the ultimate goal of long-term brand loyalty. Here banks can demonstrate how they are learning from customer relationships and engagement throughout their entire organisation thus bringing it to bear in a meaningful context for their customers.

Many banks now realise the need to harness customer lifecycles through data and agility. By identifying those “magical moments” that make up their customers’ life, such as setting up a pension, buying a home or planning for a family, they can offer seamless and personalised services for all stages of the customer journey.

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Once these moments have been identified, banks can move from product to lifestyle services and so take the customer on long term financial journeys. Banks need to create a holistic view of the customer to pinpoint when a person may want to take out a specific loan, and so develop a personalised package before the customer starts to shop around, resulting in better services for customers, more pervasive interactions, and ultimately greater loyalty. Banks cannot afford to let conversations with customers lead to a dead end and so innovations in agile technology will capture, maintain and progress this dialogue.

Creating a future of partnerships

If financial services want to truly cater to the needs of the customer, we need to end this discourse of challenger vs traditional, and instead design services that are centred around the customer.

Ecosystems offer a marketplace of financial services that consumers can dip in and out of according to their needs, whether that be a mortgage or a student loan, to access the best products out of a large portfolio. This gives traditional banks the ability to be more agile through the need to stay relevant by enabling them to bring the best of these digitally-native apps and services to their customers, while in turn challengers get access to the data required to understand customer needs and habits. It also creates compelling new business partnerships as, for example, big financial moments like buying a home involve many complexities beyond financing.

We are already starting to see movement towards ecosystems with concepts such as Facebook Pay, which is consolidating payments across all of its apps. The focus now needs to be on providing platforms that consumers will go to for every aspect of their financial lives. Competition in financial services will shift from offering individual banking products to shared marketplaces with great services.

The next year will be a crucial time for the financial services sector. As banks begin to evolve their ecosystems, launch marketplaces and create new partnerships, it is the consumer who will ultimately see the benefit of agility and personalisation of financial services. The future is all about partnerships between old and new.

This is according to research carried out by YouGov on behalf of specialist lender, Pepper Money. The research identified and questioned 600 people who have experienced credit problems, including missed payments, CCJs, defaults, unsecured arrears and secured arrears, in the last three years.

It found that 44% of adults who have experienced adverse credit said they would select a broker based on existing relationships while just over a third (36%) said they would ask for recommendations from family and friends.

Paul Adams, Sales Director at Pepper Money, says: “Our programme of research has shown that there is considerable demand for mortgages from people who have experienced credit blips in the last three years, and many of those people have concerns about having an application declined.

“This presents opportunity for brokers to promote the services they offer to potential clients and, with half of customers in these circumstances saying that they would use online research to find a broker, it’s clear that brokers can benefit from working on their online presence.”

Danny Belton, Head of Lender Relationships at Legal & General Mortgage Club says: “It is no surprise that in today’s world, potential customers start their search online to find an adviser. However, the fact that these customers are seeking advice from an adviser is very encouraging. This demonstrates the need for advisers to make themselves more visible online, and to stay close enough to existing customers so that they can be recommended to friends and family that may need their help.”

Nine out of ten young people want to buy a house, but recent analysis revealed just one in four will achieve it by 2026. From partnering up to selling prized possessions, people are resorting to to secure their place on the property ladder.

If you’re one of the lucky ones and you’ve finally managed to rustle up a deposit, you might be wondering: what’s next? After all, it’s easy for tunnel vision to set in when your eyes are on the prize for so long.

There are lots of other practical things to consider when you buy your first home. Here are eight of the most essential:

1. Mortgage options

All mortgages are not created equal, so the deal you find can make a big difference to what you can afford. Always seek mortgage advice – it’s important not just to find the best interest rates, but also because you’ll get a more accurate picture of what you can afford.

Factors like your income, whether or not you have a partner and both of your credit scores will affect the amount you can borrow. Online loan-to-income calculator tools can help, but it is always better to seek professional advice.

Make sure yours is independent, so they won’t try to sway you towards a particular product.

2. Solicitor fees

If you thought saving thousands of pounds for a deposit was enough to secure the keys to your very first home, you may be in for a shock. There are lots of other costs to cover – including solicitor’s fees.

The average cost of solicitor fees for buying a house is between £500 and £1,800 in the UK but this depends on how complicated the sale is. If your solicitor comes up against complex ownership structures, the charge may be higher, so always set a budget aside for this.

The average cost of solicitor fees for buying a house is between £500 and £1,800 in the UK but this depends on how complicated the sale is.

3. Life insurance

Buying your first home is an exciting time; death isn’t part of the plan. But, taking on a big financial responsibility means you need to plan ahead. This is especially true if you are buying with a partner: if they died, would you be able to foot the bill?

Purchasing life insurance is an important part of taking on a mortgage. Compare all types of life insurance to make sure you understand the best options for new homeowners – like decreasing-term insurance.

4. House insurance

Some mortgages require you to take out a house insurance policy as part of the deal, so this is also part and parcel of becoming a homeowner. Buildings insurance protects both you and your mortgage provider against the risk of damage to the structure of your home from things like subsidence, fire and extreme weather.

Always take out a buildings insurance policy to cover the potential cost of rebuilding your house after severe damage.

5. Protecting your deposit

Many couples buy their first homes together because it is so much more viable than going it alone. Your combined income is much higher, you pose less risk to lenders and you’ll be able to save for a deposit worth twice as much. This reality is attracting more friends and acquaintances than ever to buy a house together – a decision that can come back to bite unless the right preparations are made.

Instead, consider setting up a Declaration of Trust so that you will become ‘tenants in common’ and hold specific shares of the property. Speak to your solicitor about the options.

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6. Booking a surveyor

Homebuyer surveys help you to avoid unexpected costs. When you consider that the average cost of a boiler is now as much as £2,500, this is not a step worth skipping.

To find a reputable surveyor, enquire at an association like RPSA or RICS.

7. Stamp duty

They say two things are certain in life – taxes and death. Stamp duty is the tax you pay when buying a new house and it’s an important consideration for first-time buyers.

There is no stamp duty for properties worth less than £300,000, but if you’re a first-time buyer in London or the south-east, you might need to factor in a significant tax bill. Rates can be as high as 5% – which is a significant sum of money.

8. Negotiation

Finally, don’t forget negotiation. When you have had your eyes set on a goal for so long, you may be tempted to offer the full asking price – but this could be a mistake.

Keep an eye on the market and don’t be afraid to renegotiate after your surveyor creates their report. This way, your new house can be a great asset as well as a cosy new home.

In October, Orange Bank launched the financing of mobile devices and other purchases in Orange stores. Orange Bank has also just signed a partnership with the real estate services platform Nexity, to propose a home loans offer. Lastly, Google Pay will soon be available for customers with Android phones.

Over 20,000 new customers per month

With over 500,000 customers coming from Orange stores, Groupama branches and digital channels, Orange Bank is acquiring new customers at a respectable rate of over 20,000 per month. Apart from the volumes, the success is down to added value: ¼ of customers are acquired through loans, a major difference with other online banks, and ¾ through bank accounts which enjoy a high level of activity as 54% of these customers carry out an average of more than one transaction per week. An average of 10% of accounts are now being opened with the Visa Premium card.

A major advantage for Orange Bank is  the link with the Orange and Groupama store and branch networks which is proving very effective. The Orange stores now propose over the counter loans representing nearly 5,000 sales since its launch, and the holders of a Visa Premium card benefit from a 5% discount on their purchases in Orange stores. At Groupama, car insurance is also available with a car loan for customers who wish to benefit from it.

Partnership with Nexity

The development of the bank's distribution network has been enriched by a partnership with Nexity, the real estate services platform, intended to finance real estate projects. Through this partnership, seen as being of strategic importance, Nexity intends to become a source of new business for Orange Bank, with a shared vision: to be a player in the digital transformation of lifestyles. The first applications are expected to be processed by the end of 2019.

In response to the growth of its customer base and the diversification of its range of offers, Orange Bank is investing in resources; unlike many online banks, its 878 employees are based in France, Montreuil and Amiens, and benefit from an average per capita training budget that is 40% higher than other French banks. This justifies the attractiveness of Orange Bank which receives 20,000 job applications per year. This investment in human resources, as well as the gradual digitisation of the bank, has helped to increase the productivity of the customer relations centres and back offices by 30% to 40% depending on the activities.

Unfortunately, a poor credit score can make renting in Edinburgh or other areas difficult. You can’t borrow your favorite property with bad credit.

The average Fico score varies between 300 and 850. A fair credit score is between 580 to 669, however even a score of 675 may not help you to get the best rates on traditional mortgages.

There is no need to worry because you can in fact qualify for a mortgage with a weak or average credit score. Some government programs offer VA and FHA loans. Furthermore, each state has special lenders providing home loans for poor credit.

Here are some tips to get a mortgage with a bad credit score

• Work on your credit score by strictly following credit rules to raise your score.
• Check eligibility for VA and FHA loans. The government guarantees allow you to get the advantage of relaxed eligibility.
• Get ready for a sizeable down payment. Lenders will appreciate your efforts and offer reasonable rates. For this purpose, you can sell some items to increase your down payment.
• Feel free to shop community banks and credit unions because big banks may offer different lending criteria. Credit unions can be a good option because they offer favourable terms.

Repair Bad Credit

Fortunately, you can work on your credit score over time. Before researching a house, you have to check your credit reports. In order to repair bad credit, you have to pay your utility bills before their due date and make sure to repay your loans as soon as possible.

Try to increase your credit score to almost 660. It will help you to drop a significant percentage of mortgage interest. Take necessary actions: pay your bills, decrease your balance, and avoid taking more credit. Before applying for a mortgage, you should examine credit reports further to find any discrepancies. Make sure you fix these as soon as possible.

Avoid Late Payments

In numerous cases, your poor payment habits can affect your bill payment. Remember, your payment history can affect your score. Try to improve on your bad habit of making late payments. By making timely payments, you will quickly improve your credit score.

Decrease Credit Utilization

Your debt will make up almost 30% of your FICO score. If you owe less than your capacity, you can improve your score. It is known as the rate of total credit utilization. Experts suggest managing your utilization on all cards under 30 percent. This figure is essential for credit reporting agencies.

Try to pay off your balance as soon as possible to improve your credit card statement. If you are unable to pay the whole balance before the closing date of the credit statement, try to decrease this amount as per your capacity.

If you are planning for a mortgage, avoid new credit because it will affect your credit score, but the right credit mix could help you raise your credit score to an optimal figure.

Nearly half (43%) of homeowners aren’t aware of all the steps in their mortgage process.

Dilpreet Bhagrath answers some of the most-searched-for questions about mortgages, to help both current and potential homeowners prepare for any potential obstacles in the mortgage process.

1. What happens if your mortgage lender goes bust?

Don’t panic. There will be a process in place to protect you.

Contact your lender as soon as possible to ask for their advice on the next steps with your mortgage. In some instances, they’ll continue to honour the product until the end of your mortgage term, with the help of another lender who might purchase their portfolio of mortgage loans. In most cases, the terms of your mortgage agreement won’t change.

In the case of the recent acquisition of Tesco’s mortgage book by Lloyds Banking Group, once the accounts have been transferred over, customers’ mortgage terms will remain as they were with Tesco. This should give customers peace of mind that their mortgage is being proactively looked after whether they’re partway through their mortgage or coming to the end of the term.

2. What happens to your mortgage when you move house? 

If you’re moving to a new home, you might be able to take your mortgage deal with you. Simply ask your lender about the process of ‘porting’ your mortgage arrangement.

During this process, the lender will need to value the new property to see if they’re happy to lend on it. If the new property is larger, it's likely you’ll have to borrow more (known as a 'top-up'), and you’ll have to prove to your lender that you can afford the higher repayments using your income, outgoings and other payments. It’s important to remember that the ‘top-up’ will be based on the mortgage deals available from the lender at the time, not on the same interest rate as your current deal.

Should they decline your request to borrow extra money, you’ll need to pay the early repayment charge on your current mortgage and find a new lender to finance your new home. It’s worth speaking to a mortgage broker to find the most suitable outcome for your personal circumstances.

3. Can you get a mortgage if you’re self-employed? 

There are 4.85 million self-employed workers in the UK. It’s estimated this number will rise to 5.5 million by 2022.

While it can seem like a trickier process, self-employed people can still successfully apply for a mortgage.

Make sure you’re prepared with at least two to three years’ of financial documents as this is the amount some lenders will require. Keep your personal and professional bank accounts separate, and registering for the electoral roll can help lenders to confirm your identity.

As always, it’s to consider any personal and future circumstances when securing a mortgage and seek professional advice to ensure you're aware of the options.

4. Can you get a mortgage if you have bad credit? 

All lenders will conduct a credit check when you apply for a mortgage with them. Many people will assume that if they have a poor credit rating, they won’t be able to get a mortgage. But that’s not always the case.

There may be options out there. It’s important to remember that some credit issues carry less weight than others. Factors including how much bad credit you have and how long it’s been since the incident occurred will all contribute to whether the lender approves your application.

Some high street lenders will consider offering you a mortgage deal if they consider your credit issues as small.

It’s worth being aware that the mortgage deals available to those with bad credit will often have higher rates and fees, and they may require a larger deposit.

Speak to a mortgage broker to discuss the options available to you based on your situation.

5. Can you get a mortgage if you have an overdraft? 

It’s possible to get a mortgage with an overdraft, but your debt-to-income ratio will be taken into account. This includes the portion of your monthly income that goes towards paying credit card bills, loans and student finance. This is assessed to ensure that you’re not financially overstretched and can afford your monthly mortgage repayments.

If you’re actively using your bank’s overdraft or paying one-off, this will also be taken into account during the mortgage application. When lenders assess your monthly income and outgoings, any money used to pay off the overdraft will be accounted for.

Taking out a personal loan in the run-up to applying for a mortgage will impact your affordability assessment as these repayment costs will also have to be considered by the lender. It’s also advisable to cancel any unused credit cards before you apply for a mortgage, as lenders look at the amount of credit available to you, not the amount you actually owe.

Buying a home is one of the biggest financial and emotional commitments someone will make in their lifetime. Speak to a mortgage broker to discuss what options are available to you and lead you through the process. 

For more information on mortgage complications or costs, head over to https://trussle.com/blog/ for advice and tips.

A default is incurred following multiple consecutive missed payments on a credit agreement that you have entered into. Once you get to between 4 and 6 payments behind the lender may register your account as `defaulted`.  This can occur on most kinds of finance including: credit cards, personal loans, store cards, car finance agreements, home owner loans and mortgage agreements. It basically means that you have not kept to the terms of the credit agreement you entered into with your lender.  One thing you can do to shed a more positive light on your credit profile if you have already incurred the default is to settle it as soon as possible. At least then any lender can see that you managed to pay the debt off - as it will show as `status satisfied` on your credit report.

Negative Impact Of Receiving A Defaults

In most cases you will receive a penalty charge for missing a payment on any credit agreement. If your account goes into` Default Status` it can also have a big impact on your credit rating - limiting any future finance options.  Continuing to miss payments can also result in a county court judgement on unsecured debt and continuing to miss payments on a mortgage or car finance loan could result in repossession of the home or vehicle respectively.  These are the short term impacts, unfortunately the trouble does not stop there because credit reference agencies will leave the default showing on your credit record for 6 years before it can be removed.

“There are still plenty of loan and mortgage providers who will consider lending to people who have missed payments or even defaults."

Paul Carley MD of First Choice Finance

What To Do If You Get A Default?

If you miss a payment you need to ensure you get caught up on your debt and not miss any other payments in the future. People have missed or late payments for all sorts of reasons. It may have been an administrative mistake on your or the lenders part part, if this is the case consider setting up an automated payment such as a direct debit.

If you have incurred a default because of a problem with affordability then you need to consider your finance in more detail, if it is a short term cash flow problem, call your creditors and discuss the problem with them, if it is a bigger affordability problem you may consider restructuring your finances with the use of a debt consolidation remortgage or a larger loan to refinance your debts. Extending the debt term could reduce your monthly debt payments but you will normally end up paying more in interest overall.

Can I Get Additional Finance Or A Mortgager  If I Have A Defaults?

If you are having trouble meeting current payments additional debt should be considered very carefully, although you may consider restructuring your existing debts, with the use of a debt consolidation loan or mortgage.  Defaults will have an impact on your finance options - many high street lenders will not approve applications from borrowers with recent defaults.  However some specialist lenders are still offering competitive mortgages for people with recent defaults. Loan to values are restricted to about 80% maximum for clients with between 1 and 5 defaults in the last 24 months, these plans are also subject to credit scoring.

Paul Carley MD of First Choice Finance says; “There are still plenty of loan and mortgage providers who will consider lending to people who have missed payments or even defaults.  However the key is to gather all the facts and figures before you accept any offer of finance. The most important areas to consider are you being able to afford the loan and making sure that the new finance puts you in a better position overall.”

This guide will cover the basic and essential information about home insurance policies, so you know where you stand come the unexpected.

What does your home insurance cover?

Most standard home insurance policies cover structural damages, your belongings – as specified in the contract, and liabilities in case of accidents and injuries on your property.

As a homeowner, you have to make sure that you carry both structural and contents insurance, so you'll have lesser things to worry about should disasters like fire or water damage happen.

Typically, home insurance policies also include liability coverage that protects you from and helps you take care of lawsuits and medical responsibilities if someone gets hurts or injures themselves while in your home.

How much homeowner’s insurance do you need?

The amount of your home insurance coverage should depend on what you need and what you want to protect yourself against. That said, three factors usually determine your level of insurance.

1. Lender Requirements

If you're purchasing home insurance as part of your mortgage, your lender will require you to carry coverage of at least the same amount as your mortgage. The reason behind this is pretty much self-explanatory. Your lender will want assurance that if something catastrophic occurs and the property is a total loss, your home has enough insurance to cover the damage.

2. Asset Protection

There are limits to what and how much your premium will cover in case of a disaster or accident. That is why, you need to contemplate on extending it or purchasing riders if you have the money to spare.

Let's say you own plenty of valuable items like antiques, jewelry, or precious artworks. You may choose to have a higher level of contents insurance to protect those assets from loss or theft.

3. Policy Requirements

There are also instances when the insurance company asks clients to purchase specific types of coverage, as they deem necessary. Those who are living in flood-prone areas, for example, may be required to have flood insurance for them to carry a general homeowners insurance policy.

Types of Home Insurance Coverage

Homeowners insurance have four basic types, namely: property, additional living expenses, personal liability, and medical payment insurance. These four, however, are further broken down six different coverages. It is the level of coverage that you need - or want - for each of these six areas that determines your premium.

1. Property damage insurance covers damages to your home caused by fire, wind, or hail. Many policies do not include flood and land movement (earthquakes, landslides, etc.) insurance in their property damage coverage. You may want to consider purchasing separate insurance for those if you think you need them.

• Coverage A is the highest and most important of all as it involves the main structure of your home.
• Coverage B covers all “other structures” or the ones detached from the main building of your home.
• Coverage C covers personal property or the contents of your home in case of loss or theft.

2. Additional living expenses insurance or Coverage D.

• Coverage D covers expenses you may incur from being unable to live in your home due to damages that render it uninhabitable and the renovations that follow.

3. Personal liability insurance or Coverage E.

• Coverage E protects you and the members of your family against lawsuits that result from injury or property damage.

4. Medical Payment Insurance or Coverage F.

• Coverage F pays for the medical expenses of people who accidentally hurt or injure themselves on your property. Note that this coverage does not apply to you or your family.

No two homes and lifestyles are exactly the same; thus, there is no one-size-fits-all home insurance policy. If you really want your homeowners insurance policy to serve its purpose the time you need it the most, you must know what it covers and understand how it works.

Bunk looked at the cost of a rental deposit and the cost of renting for a decade. Bunk then compared this cost to the financial barrier of a mortgage deposit, and the cost of monthly mortgage payments over a 10-year fixed term at a rate of 2.58%.

Across the UK the average monthly rent is £676. With the newly introduced five-week cap, that means a rental deposit costs an average of £845 and renting at this average monthly rate over a 10-year period would cost a total £81,120 – a total cost of £81,965 when including the deposit.

The current average UK house price is £226,798 and so a 10% deposit would set you back £22,680. This leaves a loan amount of £204,118 and at a 10-year fixed rate of 2.58% would mean a total repayment of £231,798, a total of £254,478 including the deposit.

The current average UK house price is £226,798 and so a 10% deposit would set you back £22,680.

This means, that renting is £172,513 cheaper than owning a home over a 10-year period when it comes to the upfront and monthly costs, with the one big difference being the bricks and mortar investment secured at the end.

This saving is most notable in Cambridge with a difference of £341,090 over 10-years between renting and buying, with the saving in London also topping £316,247.

In Bournemouth, renting over 10-years is £183,376 cheaper than buying, with Bristol (£177,613), Edinburgh (£166,547), Cardiff (£143,984), Southampton (£138,617), Portsmouth (£137,240) and Plymouth (£128,480) all home to some of the biggest savings.

The lowest saving is in Glasgow where renting for 10-years is just £43,145 cheaper than buying in the city.

Co-founder of Bunk, Tom Woolard, commented: “Of course the big difference between renting and buying is that one leaves you with a sizable financial asset as a reward for your years of hard work making mortgage payments.

However, more and more of us are opting to rent long-term and what we wanted to highlight is that while the rental market is generally viewed in a negative light due to high rental costs, it is actually a considerably cheaper option when compared to homeownership, even with almost record low-interest rates. 

Not only this but those that feel resigned to renting due to the high financial barrier of buying actually have a much better opportunity to save compared to those paying a mortgage. Whether they choose to use this for a deposit further down the road or simply to enjoy a better quality of life is up to them.”