Dr David Carter FPFS

The type of arrangement you are considering is known as a 'home reversion' plan. With such a plan you sell a percentage of your home (ie 50%, in this case) to the home reversion provider, and have the right to remain in the property. When it is eventually sold (because you are in permanent residential care, or have died) then you or your estate will receive your share of the proceeds.

Reversion plans are not loans - they are partial sales. The alternative is an equity release mortgage, which is an interest-only mortgage at a fixed rate - but you don't have to pay anything, as the interest normally due is simply added to the loan. Because of this the amount you owe will increase each month. Finally, of course, if you have sufficient income, you could consider a normal interest-only mortgage, and just make those monthly payments.

Equity Release mortgages and home reversion plans are both very useful but can be very dangerous! They are really one-way paths, the funds released can affect any means tested benefits, and they must be fully understood.

Start off by looking at the SHIP website (http://www.ship-ltd.org/) where many answers and the code of conduct of SHIP members is explained. If you think you might want to take it further, have a good discussion with an independent adviser, take plenty of time and do discuss your plans with family members if you can.

Assets that typically make up an estate for inheriatance tax purposes are :

Assets are anything that has a value, such as:

•money in bank, building society or savings accounts
•houses and land, including farmland
•businesses, or business assets, owned by the deceased (or a business partnership of which they were a member)
•investments such as stocks and shares, including family shares
•personal belongings, including jewellery, antiques and other collectibles
•furniture, fixtures and fittings in a house
•motor vehicles
•pensions that include a lump sum payment on death (as opposed to an ongoing annuity to a surviving partner)
•assets in a trust from which the deceased benefited
•payouts from life insurance policies
•foreign assets held abroad including foreign bank accounts, property or shares

Yes, you will pay tax on the rental income received, the interest part of any mortgage and some other expenses can be offset however

Almost all mortgages are available as interest only. Some lenders charge a slight premium if you choose to pay interest only as opposed to capital and interest.

Although your payments will be lower, you will still have to pay back the capital part of the mortgage at some point which you have to bare in mind.

Mortgage protection is at the simplest an insurance policy designed to repay the outstanding mortgage balance upon the death of the policyholder. It is, in other words, nothing to do with the tenant, or whether they pay their rent. Landlord protection policies are available, and many rental agents offer this, often free during the first 6 months of the tenancy. In order to offer this insurance the tenants have to be properly vetted; the policies themselves are provided by insurance companies (do a Google search on 'Landlord Insurance.') and they can cover such things as loss of rent and legal costs.

Incidentally, do make sure that your buildings insurance is for the property to be rented out - otherwise you might not be able to make a claim if need be.

Check with your mortgage lender, if you have a mortgage, whether they permit this, and also confirm the position with the buildings insurance. Normally you can only have a single assured shorthold tenancy (covering everyone in the property) rather than one tenancy agreement for each individual, though there are some lenders who do accept multiple occupancy. If the property is regarded as an HMO (house with multiply occupancy) then regulations such as fire protection are more stringent than for single occupancy properties.

Firstly:

there's no need to pay for access to your file. go to www.creditexpert.co.uk this is run by experian and they will give all first time users 30 days free access to their credit file. You have to register a card with them as part of the sign-up process to pay the £6.99 monthly fee which only applies after 30 days.

you can check your file, save a copy to your pc, then ring them up before 30 days and ask them to cancel - but you must ring them an email is no good.

equally, dont bother paying to see your "score" as all lenders use different score cards and you could say to a prospective lender that "i scored 1000 which is good etc" they will answer (to paraphrase) "so what".

you need to look at the results of your file check, its all traffic lighted. all greens is good, any yellows are cause for concern more than 2-3 in the last 12 months and you will be stumped. and red will indicate a default and thats the worst possible.

this exercise might uncover errors on your file and credit expert will help to correct them if you can evidence what's wrong.

once you have done all this. if its "bad" as you say. consider taking out one of the expensive credit cards like capital one or vanquis and use this a couple of times per month for small items ie £10-£20 here and there and ensure you pay off in full. this will help you to build a positive history and you will probably find they will only offer a small credit limit anyway.

used carefully this method can help to set aside some negative aspects but prompt action with credit related matters is always essential.

hope this helps

'Always' is a long time, but it is likely that an individual with poor credit will always pay more than an individual with good credit at the point of application.

If you can keep yourself clear of problems for a while then credit worthiness does improve, but the question does arise, if you are someone who will 'always' have bad credit, is taking out a mortgage a good idea - lenders who offer mortgages to individuals with poor credit histories tend not to be the most patient when you run into problems.

If on the other hand it is an event that mucked you up (ill health and joblessness being the two classic examples) then show that it was a blip, even a big blip by keeping things straight now, and over time things will improve. Far quicker than you expect in some cases.

The question you are asking is "Do I have a need for life cover?" To get the answer, ask another question: what would happen to my dependents should I die? Would they have enough to live comfortably from other sources and, of course, how old are they now?

If they are still dependent on you financially, and if there are no other sources (such as wealthy parents, or plenty of your savings) then there is probably a need for some kind of life cover.

How much, and what type of cover, depends upon the duration of the need: for example, you might need maintenance funds until the youngest is, say, 21 and, with the current changes to university fees, you might also want then to be able to complete their studies without them having huge debts at the end.

If you are in an occupational pension scheme then that scheme might provide a high level of dependents' payments - so ask your scheme provider what they offer. Finally, do take into account the other major financial risk of your being unable to work due to a critical illness or long-term sickness - in such cases the family problems can be (financially) just a severe as if you had died. Cover is available for both of those potential problems, and, though rather pricey, suitable insurance is a real financial life-saver if you need to make a claim. This is an area where it is worth taking independent advice.

I think it's worth clarifying here - a renewable premium is one where you initially take out cover for 5 or 10 years (typically) but have guaranteed insurability until a set age, so you can renew the cover at the expiry of the initial term, but it will typically be far more expensive as you will be 5 or 10 years older.

Reviewable cover is where you have cover set and assumed at a given premium for the whole term, however if general claims experience is different than expected the insurer can change the premium at particular dates based on their overall claims experience, but not based on your personal circumstances.

Historically premiums vary up and down, and whilst reviewable life cover is not really available now, when it was customers quite often got a reduction in premium rather than an increase, because life expectancy has generally increased beyond expectations. Health insurances on the other hand have had mixed experience as improved medical diagnosis means conditions get found earlier (so more claims on critical illness), but improved treatment means that they are cured quicker (so income payment plans have improved claims experience).

So to answer the question you have asked, sometimes, but it will depend on future claims experience. To answer the question you may have meant; sometimes, it will depend on whether you 'may' need cover after the initial term, but initially only expect to need it for a shorter period.

For renewable cover, a 10 year renewable policy will typically cost more than a 10 year non renewable policy - generally I find you can get around 15 to 17 years of non renewable cover for the same price as 10 years of renewable cover.

One final point to confuse the issue, you can have guaranteed renewable cover, and reviewable non renewable cover, but generally renewable cover is guaranteed for the initial premium period, so reviewable renewable cover isn't available. Sorry, that probably didn't help...

It would vary from 12-24 months but the 24month option is quite rare and will naturally cost more to buy cover for that period. Many providers insist on you having a mortgage and will determine the amount of cover you can have by a % of your mortgage payment or % of your income.

its also worth noting that not all providers will allow you to take cover when not linked to a new mortgage or will make you wait up to 6 months before you can claim (ie 6 months before you are given warning that you might be at risk of loss) whereas when linked to a new mortgage this can be as little as 2 months.

This varies widely.

some lenders simply insist that you have an income of any amount and others will state £20000-£25000 as a minimum. Some will also impose a minimum age of 21 and wont lend to first time buyers / first time landlords.

what seems like a straightforward question, sadly doesnt have a simple answer.

you will also need a decent deposit to make the costs viable, at least 25% and most lenders will require the rent (assessed by their valuer) to be on average 125% of the mortgage ie if the mortgage is £500pcm the rent must be at least £625pcm

The percentage of your income that you pay away in tax depends upon your total income - there is no single 'rate' that covers everyone. The method of calculation is, though, reasonably straightforward. Income tax rates change each year, but for this year the calculation is as follows.

Think of your earnings as a tower of children's building blocks. The lowest block is where your earnings start, and is up to £6475 high - and you pay no income tax at all on that figure - if that is all you earn: no tax to pay. The figure of £6475 is this year's 'personal allowance'

The next block is up to £37,400 high. All of your income sitting in that block is taxed at the 'basic rate' of 20%. For example, if your total earnings are £16,475 then you pay no tax on the first £6475 (which sits in the lowest block: your personal allowance). This leaves another £10,000 which sits in the 20% block, leading to a tax charge of £2000.

The next block - the third one up - is the higher rate which goes right up to £150,000, and earnings which sit in that block are taxed at 40%. If any of your income sits in that block you are known as a 'higher rate taxpayer'. If you earn more than this you will pay 50% on the extra.

Your personal allowance is in practise spread throughout the year, and the pay as you earn system (PAYE) is designed to equalise your tax across your weekly or monthly paydays.

Careful! This simple example by no means covers all of the possible options. Your personal allowance may be different if you have a disability, or are over 65 years of age, and it gets more complicated if you have income from investments or savings, for instance. And do not disregard National Insurance contributions, which are really a tax on income.

Follow this link for more information: http://www.direct.gov.uk/en/Nl1/Newsroom/PreBudgetReport2009/DG_183037

And the 'Why?' To run the country: police, prisons, armed forces, education, health services, politicans' expenses....

Well...shares may not be the best investments for you, and nobody without accurate, careful understanding of your timescale, income, prospects, age and state of health can really give you an answer. Here are a few points, though.

Individual shares are very risky. A share is the ownership of a small part of one company, and if the company does very well, then so will you. But if the company goes bust you will lose it all. Stockbrokers are the best people to advise on individual shares, but they will expect you to have a substantial amount to invest - perhaps £100,000 or more.

'Funds' are generally also invested largely in shares, but in this case you are participating in the average performance of a large number of companies - maybe 100 or more. Different kinds of funds bear different risks, with 'riskier' funds tending to be more suitable for younger people and those with a resilient attitude, who will still sleep soundly if the value of their funds drops.

Other, lower risk investments include corporate bond funds and deposit accounts. These tend to be suited to people who want to reduce their risk, or need income, or perhaps (to make a generalisation) are rather older. If you are saving to buy a house within say the next year or two, there really is no sensible alternative to a straightforward savings or deposit account.

Then again, other investments such as rental property and so on can form part of a longer term investment strategy. It is more important than ever before to develop and maintain a robust, long-term savings strategy. It is really worthwhile to use the guidance of an independent financial adviser.

It appears so. Your code of 647L is the standard code most UK taxpayers are given as it refers directly to the (annual) Personal Allowance which is currently £6,475. This means that the HMRC will regard you as being allowed to have the full £6,475 (the code always drops the last digit for some reason) in the relevant tax year BEFORE income tax is applied to anything else.

The letter L shows that you are getting the Lower rate of tax allowance as this increases to £9,490 for anyone over age 65.

If you have already earned £31,979 by end of Novembers payslip (I assume you have not had your December payslip yet) then in the nine months of the tax year so far you will have earned the equivalent of £3,553 or so gross each month. Over a full tax year you will therefore earn £42,638 or so. As such you are very close to being a higher rate tax payer.

However your pay appears to be being pitched to just avoid this. This is because your annual earnings of £42,638 less the personal allowance of £6,475 means that 'only' £36,163 is liable to basic rate tax - the Higher rate threshold being applied from £37,400 of TAXABLE income. You only have £36,163 or so of TAXABLE income so your code is right and the HMRC can instruct your employer to apply the full 647L code and thus to take only basic rate tax from you.

£533 of tax is just about twenty per cent of your monthly pay so seems pretty reliable. Hope this helps

Effectively none - other than tax! A cash ISA is simply a savings account which is not taxed. The interest is paid to you in full, so they are slightly better for you if you are a taxpayer. If you are a non-taxpayer then there is no difference - you can arrange with the bank to have your interest paid free of tax anyway. The other main difference for you is that there is a maximum contribution you can make into an ISA each tax year, which runs from April 6 to April 5 the next year: £5100 this year, so you are well within that figure.

You will notice that I have talked about cash ISAs. The other kind is a stocks and shares ISA, which can hold investment funds (stocks and shares) - but investments such as those are not suitable for your short savings timescale. Just to complete the picture, though you can invest a maximum of £10,200 into a stocks and shares ISA, as long as your total investment into all kinds of ISAs this year (ie including what you have in a cash ISA) is no more than £10,200.

First of all, congratulations to you both. As far as life insurance is concerned, you should consider this straight away, particularly if you are the main wage earner. In the first instance, you need to make sure that she, and your new child, will have enough to live on should you die- and if you have a mortgage then consider insurance to repay that should you die. There are probably, therefore, two main insurance needs: to repay any debts, and to provide income. These needs will be best met by separate policies, tailored to your situation.

When your child is born then there may be an additional need for insurance to cover any childcare costs should your wife die, and perhaps to replace her income.

It is important to get any proposed insurance in place earlier rather than later, because it is always possible that health issues could crop up that might prevent you being insured, or might significantly increase the cost. There are many kinds of insurance, and your actual level of need will depend upon such things as any life cover provided by an employer, as well as your overall circumstances. Do make sure that you exactly understand your need so that you make correct decisions - otherwise you may pay for insurance that really is not necessary, or you might have insufficient cover.

Individual advice will be helpful to you. Having gone into your situation fully an adviser might recommend insuring both of you straight away - certainly don't just buy something 'off the shelf' at your local supermarket!

As soon as possible ! Some insurers will not offer terms until the baby is born just in case there are any problems with the pregnancy, but most will be fine. The questions should be How much do I need ? as this will be more debateable and important to calculate taking into account any existing cover, death in service etc and working out how much you would need in the unfortante events of one of you dying. You will need to ensure all debts are covered and have enough to bring up your new arrival until are no longer financially dependent. Good luck with the pregnancy

Couple of options, have you tried to downsize and reduce some of the mortgage or if things are really bad you could sell and move in to rented. Depending on your disposable income you should try and save or overpay the mortgage as most mortgages allow you to make overpayments of upto 10% each year without penalty and can start to reduce the mortgage and build up your equity. Hope this helps

Well, the short answer is that you may need all of these, or you may need none of these. The only way to know is to ask the 'what if' question - What if I died? - and to look at the financial consequences. The appropriate solution (or solutions) are those that meet the identified needs. Here are some pointers:

If I died, would I leave a mortgage? If the answer is yes, then you would need a decreasing term insurance to cover a repayment mortgage, or a level term insurance if you have an interest-only mortgage. The right term to choose would be the remaining duration of your mortgage loan.

If I died, would my wife/child need funds for their maintenance? If this answer is yes, then an increasing term insurance would be suitable. In this case the increase is to maintain the purchasing power against future inflation, and the term is for as long as the need is expected to last: I normally suggest up to the age of 21 for the youngest dependent, but you might wish to provide longer-term income for your wife.

Although a lump-sum might be useful, it is worth considering an inflation-linked family income benefit. This is technically a reducing term insurance, which will pay a monthly amount, tax-free under current rules, from the date of claim until the end of the policy term. It is a reducing policy because, as time passes, the total amount potentially payable by the insurance company will reduce (as it will be paid for a shorter time). It can be inflation linked, with benefits (as well as premiums) increasing each year until a claim is made.

The policy you are least likely to need is a whole of life policy, which is mainly used to meet an eventual inheritance tax liability. In that case you might select a joint policy with your life, payable when the second of you dies, equal to your anticipated inheritance tax liability.

This is a very brief run-down. It would be sensible to consider such things as critical illness insurance and long-term sick pay (permanent health insurance) as well, perhaps, as private medical insurance. Insurance is never really cheap, though with your state of health and age you should be able to obtain really competitive rates. As I have said on other answers, do take into account any employer benefits such as death in service payments, and widows/dependents pensions, and make use of independent advice.

In round figures, I would expect you to have to pay somewhere a little over £30 per month for every £100,000 of lump-sum cover, over a 21-year term. Each year, both the amount of cover and the premium would increase (but you could opt out of the increase, should you wish). For about the same premium you could obtain cover of £1000 a month, again with a 21-year term (payment would be made from the date of claim to the end of the original term).

I cannot be more specific without further details, and these figures should not be seen as a formal recommendation. Do send me an email, or contact one of the other highly respected expert independent advisors who contribute to this website to have a proper discussion.

Yes.

You can have as many buy to let mortgages as you want, as long as you have sufficient deposit for each, and as long as you meet lenders' other requirements.

You can also have more than one residential mortgage. Assuming you have one residential mortgage, you can obtain a second one as long as the new lender's 'affordability' calculation can be met. In other words, as long as you have enough income to pay your existing mortgage, any other loans and credit cards (and so on...) then a second residential mortgage may be available for you.

However, the lender is likely to ask some pretty probing questions. The last thing they will want is for anyone to obtain a residential loan for a property they intend letting out (it would also be seen as fraudulent to do so). Some people do try this, because residential mortgages are cheaper than buy to let mortgages - so don't go down that route.

Acceptable reasons might be that there is an unavoidable ownership overlap between two properties, and you will be selling your existing house reasonably soon, or you need a second property for midweek living because you are too far away from where you work for daily commuting.

There are two aspects to this question: the lender's point of view, and your point of view. Let's think about the lender first.

Lenders work out how much they are prepared to offer according to your income and fixed outgoings, including any loans or credit cards. This, and other information they will ask will give an idea of how much they are prepared to lend you, bearing in mind that they will need a good deposit, and the property must be within their lending criteria. Once you have a picture of the size of the loan you can work out how much it will cost on a repayment basis (where the loan will be paid off after a number of years) or on an interest-only basis (where you are only paying the interest, so the loan does not reduce as time passes).

You next need to work out your personal budget, and for that it would be a good idea to talk to parents or friends, particularly if they own or rent a property similar to the one you intend to buy. They will give you a good idea of the various expenses you will meet, such as heating, lighting, insurance, maintenance and so on. Once you have prepared your budget as fully as you can you should have a good idea about how to proceed.

Remember, though, that everything always costs more than you expect, so do build in a good safety margin as well as some ongoing savings to cushion you against unexpected costs.

Owning and running your own home is enjoyable and easy, as long as you are sensible and controlled, and don't over-extend yourself. For some calculators to help you with budgeting and for calculating mortgage costs, have a look at this useful website which is run by the Financial Services authority, and also check out some of the 'Helpful Stuff' on the SimplyFinance website:

http://www.moneymadeclear.org.uk/hubs/home_everyday.html

For most people, in the tax year 2010-2011, the personal allowance is £6475, unless you are between 65 and 74 in which case it is £9490 and if 75 and over it is £9640. If you have an income of more than this amount you will have to pay income tax.

There are some special rules for married couples where one spouse was born before 6th April 1935 or where you are registered blind.

To be honest the outlook would be bleak.

you will get letters from the lender asking why you havent paid, possibly phone calls too.

as each month passes your credit rating will deteriorate making it difficult to secure credit in the future - this can even knock on to car and home insurance as more insurers are credit referencing people now if you want to pay monthly.

eventually the lender will take court proceedings but it has been known in the past for unsecured lenders (such as a credit card company) to be able to enforce the sale of your home to recover debt.

really, your best advice is to speak to your lender to see if they can help you.

poor credit can follow you indefinitely and if bankruptcy were to occur, forever, as discharged bankrupts must always declare themselves to new prospective lenders.

Oh dear, I don't think there is a good answer for this. The only investments that a responsible adviser would say are low risk are deposit accounts, which are hardly suitable for long-term savings and and are certainly not alternative. Gilt funds and corporate bond funds are regarded as pretty low in risk, too, but they are also mainstream.

Other investments which might be thought of alternative could include direct purchase of artworks, or fine whisky, for example, but these are certainly not low risk. There is a market known as the Alternative Investment Market (or AIM) which a stockmarket for specialist funds. The link at the end will take you to some more information about this. However, with investment in such things as oil prospecting, or loans to third world economies, although large gains can be made by investing there, the potential for large losses makes AIM investments high risk, in my view.

I'll be interested to know if any other contributors have additional thoughts on this interesting question.

Look at this link: http://www.londonstockexchange.com/companies-and-advisors/aim/aim/aim.htm

Jackie, the last thing you should do is to get another loan, because that will only add to your financial woes. If you are thinking of a loan to 'consolidate' your debts then you just might get out of trouble, as long as you keep to the payments and don't do as almost everyone else does in that situation, which is to pay other debts off, take a new loan, then build up those debts again.

Do look at your incoming and outgoings carefully (make a budget, if you haven't already done so, and see whether you can adjust your spending here and there to keep within that budget), and seek the help of a specialist debt counsellor. The citizens' advice bureaux are the right places to start because, even if you are not in debt at the moment, it looks like you soon will be, and it would be wise to look at your personal spending patterns and take appropriate steps. The CAB wouldn't charge you, and they advise - you enter into no commitment by going to see them.

And make really big efforts to keep your bill payments up to date, because in this situation, whilst sorting yourself out, it is really worth your while to keep your credit history as strong as you can. Good luck.

You mortgage rate is 'too high' if it is possible to obtain a similar mortgage at a lower rate elsewhere.

But if you are locked in to a higher rate than elsewhere, because you are benefiting (or perhaps, in this case, suffering from) a special deal such as a discounted product or a fixed rate product, then there may be nothing you can realistically do about it because of redemption charges and penalties.

To get the full answer, first of all check with your current lender whether there are any redemption penalties, and also ask them whether they have any alternative products that you could transfer into. Note down the total cost of any redemption or remortgage with them, remembering that you will not only have any penalties to pay, but you will also have some form of final fee to meet as well.

Armed with that data go to an independent financial adviser or an independent mortgage broker, and ask if they can do any better for you, bearing in mind the fact that you will have to meet some or all of survey fees, mortgage fees and legal fees (which can mount up to some thousands of pounds) - some brokers also will charge a separate fee, so check this out.

Please let the broker know of the current situation and what your own lender could do for you - this will make the process more efficient for everybody. I should mention that in my own experience your existing lender is likely to give you the best deal, because the total fees due would be very much smaller - but you never know, and a good broker might suggest a strategy that could suit you better, such as perhaps a lifetime rate or an offset product.

Generally speaking any income earned in the UK must still be taxed in the UK but there are sometimes double taxation treaties in place. In this instance you would be best served to contact HMRC to establish your UK liability and then the US IRS as you might still have a further tax burden as the US system tends to look on a global basis.

ISAs are a good option as you can use them for short term savings in the form of cash up to £5100 per financial year or up to £10200 per financial year in stocks & shares but only if you are prepared to accept investment risk and to invest for a longer term ie at least 5 years. There are many who think ISAs are a waste of time but the thing to bear in mind is that many investment houses will offer charge deals through IFAs so an investment fund can often be cheaper to access through an ISA as opposed to outside the ISA wrapper.

Well now, a lot of people would like to know the answer to that question! There is still a view that what are known as the 'leading indicators' of inflation still point to a lessening in inflation but, as I am sure you know, the Bank of England has predicted this lessening for some time, and it hasn't happened yet.

I think that most people share the view that bank rates will remain low for some time to come. With unemployment increasing, house prices insecure and the 'recovery' at best uncertain, there are many factors other than inflation that will give those who want to raise base rate food for thought. If there are rises on the horizon, I believe that those rises are likely to be modest, and slow - but of course I could be very wrong.

It is wise not to defer savings for too long, because you never get back lost time. And it is also wise not to take too much heed of the short-term, nor to try to spot the 'right time' to make an investment decision. Rather, develop your plans with sufficient flexibility to meet changing conditions; if you think that conditions will change, avoid tying yourself into a product that will penalise you (by, for example, loss of interest) if you choose to go elsewhere.

Well, let's start by getting rid of the word 'should.' This suggests some rights and some wrongs, which of course is not a useful way to look at any financial matters!

Let me answer your answer obliquely. Financial management always involves balances and compromises, the playing off of one need against another. For example, should you (there we go again!) have life insurance, which protects you and your dependents, but costs money, or should you save the money you would otherwise have spent on premiums?

Many 30 year olds will have little or no savings, because they are devoting all their income to a partner or family, and are rightly ensuring their safety and everyone's quality of life. It actually doesn't matter if you don't have anything saved for retirement at that point; however, if you can, it will be wise to be moving forward on four fronts at same time:
1 Start, or continue with a long-term savings plan.
2 Start, or continue with regular pension contributions
3 Make sure that you have enough available funds for short-term needs, as a separate category from item 1 (which you don't touch!)
4 Make sure that insurance and protection issues are properly understood and addressed.

I hope this helps.

Some higher percentage loans have re-emerged on the marketplace, with up to 90% loan theoretically possible. In other words, you would be required to put down £10,000 on a £100,000 purchase. As with all mortgages, your creditworthiness and income will also play a part.

Bigger percentages are available if you go for a 'shared ownership' property, where you buy a percentage of the property from a housing association, and rent the remainder - when you move on, you are entitled to your percentage of the sale price. And guarantor mortgages, where another person guarantees to pay the loan if you fail to do so, will also give a higher percentage.

However, it is in my view sensible to try for a larger deposit, because you will normally get a better deal (lower rates) if you can put down more - the greater the deposit, the greater is your choice of product costs and features (because there is more competition) and if you can I would try to save 15% or even 20% or more. Furthermore (an important point, this) the greater your deposit, the greater will be your security if house prices tumble, and of course the lower will be your monthly payments.

Other major costs you will have to meet include legal fees and disbursements (money paid by the lawyer to do various searches on your behalf), property valuation or survey (a survey or homebuyer's report costs more than the simple valuation, which is what the lender requires, but the fuller report will cost you more). Stamp Duty - a tax on property purchases - is zero for properties costing up to £250,000 for first-time buyers, with this special rate applying to first time buyers until March 2012. If your new purchase is more than this then Stamp Duty will be payable on the whole amount at 3% or above on the entire price. A house costing £250,000 would give rise to zero Stamp Duty, a house costing just £1 more would give rise to a £7,500 Stamp Duty!

So how much do you need, on top of the deposit? Probably not very much on a modest first-time purchase, especially if you carry out the removal yourself and if the lender allows certain of their fees to be added to the loan (which they often do allow, even if these fees take the loan above the percentage deposit figure). I would suggest £3000 to £5000, to allow for unexpected costs and perhaps a few sticks of furniture and some paint.

The advice of pound-cost averaging is based on the long-term, not for short term one-off investments. It is also more about regular saving. For example, if you saved £10,200 over the next 20 years (assuming the ISA allowance is constant), the result is sometimes you will buy shares at a low cost and sometimes high. Ideally, we would all want the stock market to be low when we are buying and high when we need the money, for example at retirement. In the long run, regular savings is probaly going to give you better returns and a better nights sleep rather than the risk of timing the market. Its time in the market, not timing the market.

You need a level term insurance if your mortgage/remortgage are on interest-only bases. Why? Because the amount of the loan will remain at its start figure (unless you make overpayments), so, in order for your insurance to give you full cover, it needs to be level, for the full amount, and for the duration of your loan. If you increase your mortgage - for example you move - you can add extra cover by a suitable top-up or extra policy (subject to yourinsurability at that time).

If you change your loan to a repayment basis, simply reduce your existing cover to a reducing insurance for the remaining term of your loan - this can be done without further medical questions, because you will be reducing the risk to the insurance company.

You might choose to have a mortgage with is partly interest-only, and partly repayment (a 'part and part' mortgage). If so, you can have two separate policies, one matching the interest-only part, and the other matching the repayment part. However, it might be cheaper to take a single level policy for the full amount (and hence build up some over-insurance as time passes).

Ideally - and if not too expensive - try to cover your mortgage for critical illness cover as well, and if the mortgage is jointly held and depends upon a partner's income, then the policy should be on a 'joint life first death' basis.

As with all financial answers, this answer is a 'generalised' one which suits most people. However, your own situation may have some quirks that can influence the best solution for you; if you have any doubt, seek good advice.

Mortgage life insurance normally refers to a reducing term policy designed to follow the reducing capital of a repayment mortgage. Life insurance is a broad term covering all kinds of insurance which pay on death, and would include level term insurance, reducing term insurance, whole of life insurance, and others.

From a monetary point of view it is almost certainly much cheaper to buy a house than to rent. After all despite taking on a frightening amount of mortgage borrowing you should eventually pay it all off and be left with a real tangible property which you own outright. Historically it should also be worth (far) more than you paid to buy it. By contrast if you choose to rent you will never own your property and thus will have to rent until the day you die! A number of surveys have shown exactly how much more you will pay to rent over your lifetime than to have bought!

Even if your circumstances change and you end up not being able to pay all of your mortgage off you should still, hopefully, find that you have at least some equity built up over time to show for your mortgage payments.

There are of course other factors at play such as job mobility and maintenance costs which favour renting compared to the security of ownership and freedom to decorate as you like which favour buying. In my experience it is also often cheaper to buy via a mortgage than to rent the same property - in other words you may well find you are paying less every month to buy than to rent the same place - certainly as time ticks by this will be the case. Think about it. If you have reduced your mortgage to £50,000 on a £200,000 house the monthly repayments will be far less than renting a similar sized property. Indeed as a professional adviser I have often found that people pay less for their mortgages than they receive back in rent.

Finally not only will you be renting for life but those rents will rise (every) year - perhaps as your ability to meet ever rising rental costs reduces especially once you retire. Meanwhile those who have bought have typically paid off their mortgages by the time that they retire and so face reduced living costs compared to those who must still pay rent.

If this is an investment question then matters may be different. Renting avoids maintenance costs, estate agent and lender fees, letting fees and gas safety inspection costs etc and leaves capital free to invest elsewhere where it might perform better. Certainly, as we should all be very well aware after recent events, property can (and does) fall in value as well as rise. You should therefore not mix up buying as a home to live in with investment. However you may be lucky and enjoy both!

It is a really helpful thing to do for your children, because it gives them security and a good place to live, without being at the mercy of (sometimes) uncaring landlords. This kind of arrangement usually works out, although you need to consider what will happen to the property when the children move area. Will you, for example, continue to rent it out to students? This can be lucrative, but can also cause additional cost. You may be able to safeguard yourself by renting direct to the university housing department, in which case your rental income will be lower but secure, and the property will be maintained by them.

On the other hand, if you intend selling the property after, say, three years, then you would have to be prepared to take a loss if house prices have fallen.

So, the main reason for doing this is to help the children - and in my book that is an excellent justification; you may make some money, too, but if your main aim is housing investment, then renting to your children (or letting them live in it free) is not so good; after all you would be very unlikely to evict them if they did not pay the rent!

You might run up against some mortgage issues, here. If you buy the property on your savings, or by increasing your own residential mortgage, there will be no problem. However, if you go for a by-to-let mortgage do bear in mind that lenders usually do not permit relatives to occupy your rental property.

This is a huge question, so I can only note down a few pointers.

If asked, ''what is my house worth?" there is only one answer: "it is worth what someone is prepared to pay for it." In other words, like most investments, its worth depends upon sentiment seasoned with other influences.

If people are confident about the economy, house rises will rise (it is a feedback loop - conversely, if house prices rise, people become confident about the economy). With current economic insecurity, we have seen house prices fall, of course.

Affordability is another issue, with mortgages dependent upon income. The more money available to buy properties, and the lower the rates, the freer are people to obtain loans. A major effect of this is to increase the cost of the house they would have bought anyway, with a marginal possibility that they could buy a better (as opposed to more expensive) property.

An influence here is earnings. Earnings tend to rise a little faster than inflation, so progressively more money comes available to fund house purchases - hence house prices will also tend to rise.

Locally there will be other influences on house price movements, such as unemployment levels, the influx or otherwise of new industries, the catchment area of a school with a good reputation, regeneration plans or proposed new wind farms or recycling centres, for instance. The quality of the immediate neighbourhood is critically important.

Finally, consider that it is impossible, mathematically, for house prices to rise indefinitely, as it is also impossible for indefinite growth of any investment. If they could, then the value of those investments or house prices would tend towards infinity.

Life insurance is something that most of us will be all too happy not to claim! Most policies are purely for protection and, as Paul says, have no surrender or maturity value.

Endowment policies are combined life insurance/savings plans, and are not really very good at either. Whole of life policies are designed as insurance policies with an investment element as part of the insurance structure. These plans can build a (very modest) value. Of course, you cannot outlive such a plan, but you may be able to surrender it and put a small sum in your pocket.

offset deals have their place but are not right for everyone.

take the worst case scenario that your lender has financial difficulties like we saw with northern rock et al, your deposits have been offset or merged with your mortgage and therefore effectively extinguished by having reduced your mortgage debt - so not lost - just not savings anymore. this isnt the case with all lenders as some offset without the savings element being a part of the mortgage so when its a separate account the above wont always apply.

setting that issue to one side you need to consider why are you using an offset, do you have large cash on the side that you need/want to retain access to with very short notice perhaps its earmarked for a building project or some other reason and when you compare the rate on your mortgage to your savings you are better off with the offset - this makes sense to consider.

but many people have taken offset mortgages because they were trendy and never really used the offset or flexible features. given that most lenders will allow overpayments of 10% without incurring a penalty (although some only allow 5% and others 20% !) and if you have overpaid will allow you to borrow back, often you will get a better underlying rate with a normal tracker.

An offset would be the desired outcome if you plan to overpay the mortgage by more than the penalty free allowance EVERY year.

this is why it makes sense to spend time with an experienced and qualified IFA such as myself and other colleagues on this site. As we can explore all of your needs and then make a recommendation that will best suit your circumstances, then as each deal is due to expire you can repeat the exercise to ensure that you continue to get the best deal for your circumstances.

you cant get all of the above from a comparison website!

there are still many benefits to the human touch and a face to face meeting!

Paul is right in his assertion that you are a limited company director.

the reason for this is that the limited company rules mean that you and the company are separate legal entities (hence the limited liability status) and so when determining taxation, your gross profit after all allowable costs will then be liable to corporation tax.

you will then declare a dividend from your profits and the corporation tax paid will satisfy your personal income tax liablility at the basic rate. if your dividend income, when added to all other income, takes you into the higher or additional rates of income tax you will then pay the additional amount of tax due so that you have paid the correct amount of tax.

the notional higher rate when you have dividends is 32.5% and 42.5% for the additional rate which broadly equates to the 40% and 50% standard income tax rates.

you can of course reduce your liabilities across the board and still benefit by making an employers pension contribution to you as an employee as this is treated as a business expense and will therefore be exempt from corporation tax.

feel free to get in touch if you want to talk this through more.

if however, you are not a limited company but instead in a partnership or sole trader, you and the company are regarded as the same entity and therefore corporation tax isnt due only income tax and class II and IV national insurance.

there are many ways to legitimately reduce your tax burden without leaving you worse off, i have been able to successfully improve my clients' financial position after carefully analysing their needs and structuring their income to give them what they need for now and still plan for later.

it can be a complex matter and not easy to try and cover off in this type of forum but hopefully these initial answers will give you the incentive to look at your position in more detail.

The answer here is that anyone can get a tax rebate as a rebate simply infers that you have somehow overpaid.

if your income - salary, savings interest, share dividends, rental income (basically all forms of income) falls below your personal allowance of £6475 this year rising to £7475 from 6-4-11 you wont get a rebate as you shouldnt have tax deducted. if you fit into the above category you should be able to claim gross interest on your savings but share dividends are the anomaly as you cannot reclaim the tax on them as this was removed by Gordon Brown when he was chancellor in 1999.

i hope this has answered your question, if there are further points, feel free to post more or email me...

Sometimes.

It depends on the bad debt, a bankruptcy, county court judgement (CCJ), Individual Voluntary Arrangement (IVA), or serious default will all make life very tricky. Late payments or small defaults or CCJ are significant problems, but provided they are isolated incidents some lenders will still take a chance on you.

Generally if it is possible to get a mortgage, it will be more expensive, and require a larger deposit than would otherwise be the case.

The key with any investment is research and timing.

you need to understand the risks attached to all investments from cash to shares and also identify your time schedule and exit strategy.

no one can accurate predict in advance when to invest but you can look at historic trends. generally shares should be held for the long term, five years or more.

many people have made money day-trading but some of that success has been "accidental" rather than planned and controlled.

this is why when i recommend a portfolio of investments to a client is based on their risk profile, investment term, financial circumstances and a range of investments which have a good proven track record and not just simply jumping onto the bandwagon of the latest trendy or esoteric investment.

sadly many people have been caught out in the past with penny shares and boiler room scams because they have let greed overtake common sense. dont get me wrong, we are all driven by greed and greed can be good but if someone is promising you double digit returns in an investment you have never heard of, tread carefully.

one of the latest scams is encouraging people to buy plots of land on the basis that planning consent will be granted and a £10000 plot of grass will suddenly escalate in value overnight. on the whole its simply not true, sometimes it will be but thats a rarity, most of these scams have been in remote towns, far away from the investors home, where they have no local knowledge and worst of all in green belt conservation areas!

yes it can be but you have to consider why are you investing.

if it is in response to recent media coverage of an investment, the chances are that the profit in the short term has already been made and you are ready a report on yesterdays news.

with any investment you need to consider how long are you prepared to invest, what degree of risk are you willing to accept, what contingency do you have in place for emergencies (always good to keep some cash in the bank for a backup), are there other more pressing reasons to use the money for something else ie paying down a debt with a very high rate of interest?

i dont know if this has answered your question as it was a little vague but if you are willing to expand on the situation it will be simpler to give you a more relevant answer

Let me guide you to the website, http://www.hmrc.gov.uk/inheritancetax/pass-money-property/exempt-gifts.htm which will give you simple info on this area.

The main problem with answering this question is that are many more questions than answers. Such as "are you the person receiving the gift or giving it". "What is your tax status?" and what is the inheritance tax situation?", so sorry if it sounds like sitting on the fence.

Unfortunately not, but there have been initiatives available in the past from Business Link, there website is http://www.businesslink.gov.uk/bdotg/action/home . Unfortunately, the coalition governments cuts have ensured that there funds are not as generous as they have been in the past to help with this type of thing

Yes Natwest is offering 6.89% for 5 years but its not much to party about.

also remember as natwest is almost entirely state owned they have deep pockets but these type of rates are best avoided usually.

even by scraping a little more deposit and getting an 85% ltv loan will dramatically cut the above rate and would be far more attractive.

personally i think it highly unlikely that 100% will come back on standard schemes. there should always be a buyer contribution otherwise what financial incentive does the borrower have to make the mortgage work if they dont stand to lose anything?

one of the reasons the rate is so high is because 90% loans are still considered high risk

at 6.89% for 5 years its not much to party about.

also remember as natwest is almost entirely state owned they have deep pockets but these type of rates are best avoided usually.

even by scraping a little more deposit and getting an 85% ltv loan will dramatically cut the above rate and would be far more attractive

According to their website it's 5.99% unless you are a Halifax current account customer with £1,000 pm credit in which case it is the 5.79% you quote.

As it is available to 90%, and furthermore pays some of your fees (still have to find stamp duty, and moving costs, and possibly some legal fees) it is quite competitive if you are a first time buyer with a small deposit.

However 5.79% is expensive compared to rates available for only slightly higher deposits, so the answer to your question is 'yes and no', in that it's good if you are borrowing 90%, or I suppose if your loan is very small, and fees make up a disproportionate amount of the overall cost, but it's expensive if you have other options in terms of the amount of deposit you can raise.

I'd say the average has dropped below 70%, with many borrowers who have higher loan to value ratios effectively landlocked until their property increases in value.

For a new buyer around 80/85% is still vaguely commercial, but I really would avoid going to 90% if at all possible.

Paul is quite right about how other factors can affect your chances too.

Assuming that all else fits (such as affordability and the nature of the property itself, for example), the rates depend upon the percentage (LTV: loan to value) that you wish to borrow. As a very rough guide, at the moment you might expect to pay the following during the initial special rate period, whether fixed or variable:

At 90% LTV: around 5%
At 85% LTV: around 4%
At 80% LTV: around 3.25%
75% LTV or below: mainly around 2.5% to 3%, with one or two down to about 2.2%.

Without wishing to give too many figures at this point, as an example for each £100,000 borrowed at (say) 3% you would have to pay:
(a) interest only over any term: £250 per month
(b) repayment over 20 years: a fraction under £555 per month
(c) repayment over 25 years: a fraction over £474 per month

Very roughly, if the interest rate were 4%, you would add a bit more than £80 per month to the interest-only figure quoted above, and about £50 to each of the repayment figures quoted.

Market conditions and base rate changes would, of course, alter the situation, so what I say today may have altered considerably in a few months time. And these figures by no means tell you the full story, though, because these products may lack the options and flexibility of very slightly more expensive mortgages.

In particular, they tell you nothing of what will happen at the end of the special rate period - a loan with an initial very low rate will probably be a poor choice if, at the end of maybe 12 or 24 months it goes onto a high variable rate (at which time you are confronted with staying with it, or remortgaging with the the associated significant costs and inconvenience). The fees, too, need to be taken into account

In the selection of a suitable mortgage, certainly don't simply opt for the cheapest and try to save a few pounds each month. Rather, whilst looking for a competitive product, of course, make sure that the loan conditions and features suit you and that you go with a lender with a decent reputation for efficiency and consistency; this is where a good broker can provide invaluable advice tailored to your own situation and needs.

products marketed as over fifty usually dont need to be underwritten which means that if you are in poor health you can at least take out some cover.

But for people in reasonable health even aged over 50, an underwritten "standard" policy will still tend to work out cheaper and will often be more flexible in terms of how long the cover can run and being able to change the cover mid policy.

lots of the building societies promote these plans and often they give you M&S vouchers as an incentive - why? well they can afford to as they are a real money spinner as they are sold on a non-advised basis which means you take responsibility for whether the product is actually suitable.

having said that i have used these products for clients in the past but as a last resort as i have been able to place cover more appropriately using more traditional methods.

Assuming you've got a plan in place, then it is best to increase the existing plan, but only if the insurer allows it. With many you have to wait for a special event to occur such as a marriage, birth of a child or moving house. So, with this in mind, if your health is still good, it may be best just to cancel the existing plan and start a new plan with the correct sum assured. But take care not to cancel the existing plan until the new is in force.

However, if you have a term assurance plan, this will expire at some point, as they are designed for fixed terms. If you're looking for funeral expenses to be covered, you may want to consider a plan just to cover these costs. Dignity offer a plan where you pay for your funeral expenses over a 2 year period, if memory serves me right, by means of a monthly payment and the funeral expenses are covered, irrespective of inflation

A bit off-topic, but for any non financial advisers out there, I think that Paul is being somewhat modest about his approach to the work. All competent financial advisers have some knowledge of the law, particularly as it relates to financial matters - and I would be surprised if Paul, like me, has not from time to time outlined information for a Solicitor, whose knowledge is occasionally very basic on such issues. The three professionals who may have impact on an individual's financial affairs - Solicitor, Accountant, and Financial Adviser - have complementary, occasionally overlapping but essentially different specialisms.

I usually advise my clients to consider a unit trust and designate it for your child /children. Even though a unit trust is associated with risk as there is an element of stocks and shares, over the long term, they do generally outperform better than cash accounts.

The alternative's are savings accounts with your local building society or a National Savings account. At present, the interest rates are dire, and probably will be for awhile, but I would seek advice on this area through an adviser so that you can consider the best option based on the amount you want to save, the term and your attitude to risk.

Feel free to ask me anymore questions

This is certainly an area that is under fire. The Capital Gains Tax rate for higher rate taxpayers has already been raised to 28% (from 18%) and a large gain could of course bring the vendor into the higher rate bracket during the year of sale. Council Tax deductions for empty properties/second homes is, I suspect, also likely to go - and it may be that local authorities will be able to set increased taxes for empty properties - a doubling in council tax has been mooted. This is only likely to be delayed, in my view, if unforeseen problems arise, so it could well happen this year.

The points above are areas that do not need major legislation. Any new tax could be even more divisive than the current government is prepared to accept, so I think such a tax would take some time to be created, if at all. A particular concern would be not to disadvantage some second-home owners by accident, as it were, where there are (for instance) work-related reasons why a second home is necessary.

a holiday home could be a business venture - like a buy to let property but only let on "holiday" terms ie a fortnight at a time.

second home insurance will usually infer that you own a second home that you spend time in but its only occupied by you and your family (which poses a lower risk of a claim when compared to a let property).

it's a reason why insurers will always ask who will occupy and how often the property is left vacant as this will impact on the cover available.

Credit card debt is very expensive, and debt consolidation, where you roll these debts up into a single one at a lower interest rate, could well save you money in the end, as well as reducing your monthly outgoings. However, be careful where you get such a loan from, using a high street bank if possible, and check the details very clearly. Incidentally, the way many people run up high credit card debt is to use their cards for lots of little purchases, or to take cash out (perhaps in small amounts) as and when they want some. If this is you, maybe you could decide to take the week's money out on the same day, not using the card until the next week.

The danger is that, once you have consolidated your cards into a single loan, you will start running up your card debts again - so ending up in a worse state than you are at the moment. A way to reduce the likelihood is to cancel your card arrangement (don't just cut up your card).

Thinking about your spending patterns so far and designing a budget (contact me if you would like me to send you a budget planner that runs on Excel) will help you manage your finances. And do take a long-term view; managing your finances effectively is like overeating: losing weight slowly by changing your diet permanently is far better than going ON a diet. Your financial diet needs to be sensible and gradual and controlled, with enough slack and enough enjoyment money to make it acceptable for you.

a personal loan is really the only viable, and cheapest option.

it would be worth looking at slightly lower values though. sometimes the banks are crafty with rate changes and you might get a better loan rate by either looking at £9950 or £10050. having said that, the amount you are seeking is "average" so the most attractive rates will be in this price band.

do consider carefully before agreeing to loan protection, the banks have stopped offering this as widely as before, mainly due to mis-selling, but you might be able to take a broader income protection plan to safeguard more of your earnings rather than limiting you to the loan repayments.

choose your lender carefully and check their qualifying criteria before you apply. if you make too many applications in a short period you can be declined for making too many attempts as this will impact on your credit file - it makes you look desperate rather than resourcefully seeking the best deal.

There are three factors involved when comparing renting with purchasing: personal power, potential long-term advantage, and cost.

There is no doubt that a property owner has greater power over what he or she can do in a property than does someone who rents. Although there are are likely to be restrictions on what you can do in an owned flat (because of the management rules of the property) you don't, for example, have to ask permission to paint the walls or hang a picture, or to buy a better cooker; you don't have regular inspections or have paid a deposit that you may not get back.

The potential long-term advantage of owning a property is that you have an asset that we expect to increase in value, eventually owning it outright. It is therefore not only a place to live in now, but is an investment and a place that you will be able to live in 'rent free' in the (distant) future.

The final financial issue is the cost and affordability of purchasing, and here you will need to make your own calculations. But I suspect the overall costs will not differ very much unless, of course, you are living in very cheap rented accommodation.

The last part of your question relates to timing. Nobody can foresee the future and, although another housing crash is currently thought unlikely, in the short term property prices can move in either direction. It seems to be a good time to buy but, at any rate, with house ownership being a very long-term strategy whose main aim is to provide you with somewhere to live and whose secondary aim is as an investment, I see no reason to wait for things to 'improve.'

100% loans are not just difficult - they are impossible, I'm afraid. So you will need a deposit of at least 10% of the purchase price, though with a (relatively!) small deposit, you will not get the best (ie cheapest, with good features) products.

It really is not easy for the first-time buyer, nowadays. Some people take a gift from parents, who may have savings or who may be able to increase their own mortgage a little, or who (if elderly) can take an 'equity release' product to help you out. If such a gift is available and is readily offered then you should seriously consider it.

Other than this, you need to start a regular savings plan, making sure that you stick to it by regarding the money saved as 'not available' and the monthly savings as simply a reduction of your income. A final, really important, point is to maintain excellence in your credit history: pay all bills regularly and by standing order, so they don't get overlooked and avoid any blemishes. If you don't have a credit card, do obtain one (this will improve your credit score) but don't get carried away and use it more than minimally.

If you're a first time 10%, minimum, if this is your second house, 5% for a limited amount of companies, but the more you have, the better deal you will obtain

I don't think so. Of the 5,500 mortgage deals available on my sourcing system, 754 are for 5 year+ fixed rate deals

Darren is quite right, where mortgage companies offer deals and withdraw them all the time with revamped terms

An interesting question. When you take a fixed rate deal you are gambling on the average variable rate you would have paid being equivalent to the fixed rate. Let me explain.

Let us imagine a £100,000 interest-only mortgage, with the choice of 3% variable or 4% fixed, with a 2-year special rate. In this example, after 1 year the variable rate jumps by 2%, to 5%.

At 4% the interest-only payment is £4000 each year, a total of £8000. The variable rate payment is £3000 in the first year, then £5000 in the second year - also a total of £8000. In other words, the average interest rates are identical. So how do you choose between them? Just compare the interest rates of a variable rate loan and a fixed-rate loan over the same period. Then double the difference between them, and if you think that interest rates will not rise by that much, then the variable loan is likely to be better. In the example given the difference was 1%, and the rates would have to rise by over 2% for the fixed rate loan to be the better bet.

Now this is a simple example, but the principle is correct, assuming a uniform rise in rates. The question is: would it make sense..... and the answer must depend upon your need to stabilise your finances, how much you could bear a rise in mortgage costs in the short term, and your view on interest rates in general.

Let me also stress the importance of considering the rates that will be imposed following the fixed rate period. If the rate is a competitive one, then you should not have to remortgage, but if the rate is poor then, as you have said, you may wish to remortgage but be unable to because of house values or your own financial position. To be on the safe side, though, do work through the position should mortgage rates have risen a few percent at the end of the special rate - can you afford it?

The interest rate charged will depend on a whole lot of factors: how big a percentage you wish to borrow, your credit history and so on. The range is from about 3% (or just a little under) to 6% or more. Just as a starter, I suggest you use 4% if you are borrowing under 75% and 5% if you are borrowing up to 85%, with 6% if you intend to borrow 90% of the purchase price.

But this is just a rough guide!

David is quite right in what he says.

A lender takes a different view when a residential mortgage is granted over a buy to let deal.

Residential is occupied by you and under normal circumstances you will always keep to your repayment schedule and therefore the risk of default on the loan or damage to the property is minimal.

A buy to let deal is taken by you to make a profit, so why shouldnt the lender profit too? tenants are not usually as careful as an owner with property care/maintenance and they have little financial influence to ensure that they always pay you the rent, to then pay the mortgage.

also a residential mortgage was granted on the basis that you and/or your family would reside in at least 40% of the property - this has legal implications and also regulatory issues as the FSA doesnt regulate buy to let deals but they do on residential, this also impacts on your "protection".

David also identifies a point that i noticed, you seem to ask similar questions but posed on almost opposite circumstances.

many people have had help from these forums but it does require straight talk on both sides. clearly no one would expect you to divulge sensitive information but there are many people able to assist you if you let them.

No.

The mortgage in place is the result of a contract between the parties and, as long as you do not break the terms of the contract, then the lender has no powers to alter it.

For people who are good with money and perhaps have an income which fluctuates (being self-employed, for instance, or receiving bonuses) then an interest-only loan can be an excellent idea. After all, a repayment mortgage is, in essence, only an interest-only mortgage with regular overpayments.

Such products may allow you to suspend payments completely (once overpayments have been made) or even borrow back the sums overpaid. Although doing so would put your repayment plans (temporarily) off-track, they can mean that you are able to cope during a downturn in your personal finances, without having to move house and perhaps running into debt or default problems.

to be honest, men could actually pose a greater reason for inequality in the basic state pension age as men in the UK on average have a lower life expectancy than women and have to wait longer to claim.

a woman at age 60 could be expected to live an average of 25 or more years whereas a man at 65 might only have 16!

when the original state retirement ages were devised, very few men even lived to 65 and the pension was a nominal sum and often only paid out for a couple of years as you had to be almost on the poverty line to be eligible and therefore generally had a very low quality/standard of living.

the most likely reason for the age gap would have been looking at age differences between couples and that 5 years was an average gap between men and women in relationships therefore when the man was 65 and retiring, the woman on average was 60 so it enabled both to retire together.

ultimately as life expectancy has improved dramatically, the taxpayer cannot afford to pay a generous pension to everyone at such a young age after already having reduced the number of years to qualify for a maximum pension to only 30 years.

a woman used to pay in for 90% of 44 years and a man for 90% of 49 years. so you can see women also paid in less and in theory got the same as men - this to some degree would have compensated for raising a family and not working but again, when the state pension was devised it was highly uncommon for women to be working whereas in today's more modern society women are the main breadwinners in some families/relationships.

it might be considered hard for the age to be increased but lets be honest, no one can actually afford to live on only £100pw regardless of whether thats at 60 / 65 / 70 so people have to do more to plan for their own financial future.

you have omitted to mention that men will see their age rise to 66 before women will, and the young (born from the 1960s on) will reach state retirement much later, i'm already set to age 67 but expect that to rise - but im not relying on my state pension to keep me, in fact i would be surprised if its still in its current form in 30 years time.

you can check your state pension age here:

http://pensions.direct.gov.uk/en/state-pension-age-calculator/home.asp

but remember the benefit of planning your own retirement is that you dont have to wait until 60/65/70 etc. a personal pension will give access at 55 (this will probably rise in the future too) but if you have other assets you can stop working whenever you like!

my view is that its always best to control your own destiny rather than relying on a "nanny state".

the value of property is partly influenced by supply/demand/desire.

some people feel that property is still overvalued and should fall by as much as 30% or more to enable people to purchase based on more traditional lending multiples of 3x single or 2.5x joint income.

although there might be some truth in this, i think the rationale is somewhat flawed.

lenders are lending more cautiously, sometimes overly cautiously, but the sector of the market most impeded is the 75%> ltv as these pose additional risk to lenders and so they want to restrict their lending to what they consider to be deserving cases (sometimes restricted to existing borrowers only and no FTBs).

liquidity in the market is not as good as it was at its peak but its better than when it was at its low.

The BoE cannot force lenders to lend, frivolous lending (and borrowing) is in part to blame for the state we are in now and for as much as people rant about bankers being overpaid, they never moaned about that whilst the times were good, and they also forget that they borrowed the money, spent the money, had no means of repaying the money and never took precautions to safeguard their income in the event of a financial catastrophe.

i'm not defending bankers per se, but we have to remember that the banks didnt spend the money, they lent it, "we" spent it, some wisely but most foolishly.

we also have a glut of new build properties because the last government forced local authorities to build ridiculous numbers of new builds (by granting permission to the developers) the problems here are that the building standards are not the same as they were in the past when to own a new home was like a stamp of approval (how many tv shows now show "homes from hell")

new developments also imposed a % of property to be used for social housing - which was not the case in the past, without being a snob many people now dont wish to spend their hard earned cash buying a nice new home to find out their nextdoor neighbour is a rehoused council home evictee with out of control kids and all the other bad habits.

even setting all this aside, too many flats were built in inappropriate locations, the upshot is that many towns and cities now have vast numbers of vacant flats that no one wants to buy now (and clearly didnt then either) but you can build more high rise flats that you can terraced houses on the same plot and all of today's lifestyle tv seems to centre on kids, gardens, animals etc which dont tend to fall into the flat owning community.

most of this is just my take on things but i am sure that others will have their thoughts and experiences to share too!

Generically, then you can't do much better han a stakeholder pension. But not all give you good value for money.

The best route for you to take is to seek advice from an Independent Financial Adviser because there are several factors to take into account such as what are they charging for, your attitude to risk and fund choice and you really need advice on this. Feel free to talk to me about this and I will be able to give you some pointers about this area.

As David and Darren have mentioned, these are effectively a thing of the past, "mosting pre 2001 plans", and most pension providers will probably increase the annual management charges by a small margin for the first 5 years to pay for advice given.

I have seen some shocking plans where there has been a 5% charge everytime you pay a contribution, policy fees, annual management fees, fees for switching and one provider charges a marketing fee (???) - a very strange one.

However, as mentioned, in 2001, things became simpler with the birth of stakeholder pensions and every provider had to drive down costs to compete in the market and satisfy the regulator

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