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July 2014 Newsletter – In the Press – Financial Frustration – Guide to Protection

July 3rd, 2014 | No Comments | Posted in Monthly Newsletters

TMS

In the Press: Cable Questions Lending Levels

It is fair to say Business Secretary, Vince Cable, caused a bit of a stir last month as he questioned current lending levels and suggested that parts of the UK housing market were getting “out of control.” As the debate continues as to whether we are in, or approaching a housing bubble, it seems measures are being taken to ensure that previous mistakes are not repeated. Although the mortgage market review will undoubtedly hope to rectify some former errors, it seems the government may share some of Cables’ concerns and are taking further steps.

Only a couple of days after Cable declared his appall at some banks lending up to five times an applicant’s income The Chancellor, George Osborne, declared that he will give the Bank of England ‘all the weapons it needs to guard against risks in the housing market.’
One weapon that The Chancellor has provided the Bank of England with is the ability to enforce lending caps. A strategy that Head of the Bank of England, Mark Carney, is already familiar with having deployed similar enforcements during his time as head of the central bank. Whilst this may spark concern for those looking to purchase, don’t despair. As The Council of Mortgage Lenders highlighted there is a big difference in being given power and actually employing it. This move may simply be a knee jerk reaction from the Chancellor in response to The International Monetary Fund’s scrutiny of the UK housing market.

Financial Frustration for Graduates

For graduate’s it seems financial frustration could become a long standing burden. For many university and debt go hand in hand, but there are many misconceptions within the student body in regards to the consequences this lifestyle could have on their futures.

As if an increase in fees in 2009 wasn’t bad enough, with some students facing debts of up to £40,000, since the roll out of the mortgage market review student loan repayments will now be considered as a committed expenditure and will therefore be included as part of an affordability assessment.

However, this does not mean securing a future mortgage for graduates is an impossible dream. A spokesman for the Building Societies Association said “we would urge all borrowers with student loans to be responsible, realistic and reduce their debt elsewhere as much as possible if they are thinking for applying for a mortgage.”

A Quick Guide to Protection

For many protection is viewed as an expensive extra rather than essential. This is a worrying attitude as although people may not want to contemplate the worse, they should undoubtedly prepare for it.

Protection is available in a number of different forms and will vary in price depending on personal circumstance.

Protection is definitely something that is personal to each individual and although cost is always important, consider those monthly payments that already leave your account. Could you live without those sports channels or faster broadband? The answer is probably yes. However, would you be able to cover those essential monthly repayments if you are unable to work, by the figures above the answer for many would probably be no.

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