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Money Mayhem: Don’t Make These Mistakes

January 30th, 2017 Posted in Money Tips
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Money is great when you have it, but there are still tonnes of mistakes to be made that can either cost you your hard earned cash, or cost you the opportunity to make more. It pays to stay wise where your money is concerned because it can be the difference between your future being bright or bleak. There are certain mistakes that are worse than others, and can really cost you your future happiness. You need to do more than simply hold onto your money by spending wisely. These mistakes should always be avoided, and luckily, it is quite easy to do so.

Over Extending On A Mortgage

Buying a house or apartment is supremely exciting. You get to have your own space and finally put your own stamp on a property by designing it yourself and decorating how you see fit. But don’t take the biggest mortgage you can, because it could prove hard paying it back whilst still maintaining a comfortable way of living. Instead take a reasonable amount that won’t stretch you to breaking point. Remember, when you get a new home you’re likely going to need spare cash to renovate. You may need a new kitchen or bathroom so make sure you have the money there to do that. If you dump it all on a deposit you won’t, sure, you’ll have a great home, but no money to do what you need to do.

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Protect Your Money During Marriage

If you have a decent amount of savings as you go into a marriage it can be a good idea to get a prenuptial agreement drawn up. It may sound harsh asking for such a thing, but it can really save you losing out big time down the line. If you get divorced you’ll have to use the Best Law Firm to ensure you take away the majority of your cash, but if you had a prenup then it could have all been avoided. It may sound like one of those things that only celebrities and millionaires use, but you’ll be surprised by how useful they can be to protect even the smallest of savings. It may hurt your other half, but they’ll ultimately understand, you may not even need to use the agreement, but it is a great precaution to have in place and it will save you thousands.

Not Letting Your Savings Work For You

If you have any kind of savings in the bank then you need to put them to work to earn yourself a passive income. Even if it is moving them over to a bank account which offers better interest rates. These always vary so make sure you keep an eye on them and adjust them as necessary. You can also try checking out the ISA accounts. These are fixed term saving accounts which means you can’t withdraw from them until the time period is over but as a result you can benefit from higher interest rates. You can find some of the best ISA’s here.

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The New Home Financial: How To Make It Through

January 27th, 2017 Posted in learning about money, Money Tips
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Moving into a new home is great, excitement bubbles over as you work where you’re going to move and start thinking about how you’re going to decorate it, but there are financial hurdles to get over along the way that all but the most rich need to spend time deliberating and worrying about. There are ways around this, ways that require perseverance and a willingness to learn. Sure, saving takes some time, and parting with that cash can be tough, but you need to see it as an investment, only then does it make it all worthwhile.

The Mortgage

Getting a mortgage can be an extremely demanding and painful process. You need to stack the card in your favour before going for one, otherwise you could be turned down, which is a stressful process. If you are turned down, there are places that can help and give you more advice such as at 1stukmortgages.co.uk/declined-or-refused-a-mortgage-advice. You should seek all the advice you can prior to the meeting and make sure you have saved up enough of a deposit. This will be the largest outgoing but don’t worry because you aren’t under pressure to save, just save bit by bit and as much as you can. Know what kind of properties you want and save accordingly.

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Government Taxes

Don’t forget there are government taxes you may have to pay too, so don’t put everything into your housing deposit. Remember you are going to have to save up some extra money for this. The tax such as the stamp duty tax is a tax that varies depending on the price of the property. It is an non negotiable fee which you need to pay. You can calculate how much your duty will be here. You need to set this sum aside because you don’t want to be caught out and end up having to pay it out of cash reserves you have set aside for other things, such as renovation.

Renovation

You’ll need spare cash for renovation. There will be many things in your new property that either need fixing up or changing to suit your own needs. Before you purchase the house you should get a building survey done, which will show you any issues that need to be rectified, Don’t be afraid to offer a lower price because of these issues. Or, ask them to sort the issues out before making an offer. They may take the financial hit or pay out for the work to be done themselves. Whatever they decide, it’s win win for you. You don’t want to end up with a property that has severe structural issues. Set aside money for the home, after you’ve viewed it you’ll know roughly how much you’ll need to spend to do what needs to be done. You don’t want to end up in the situation where you have spent all your money on the deposit with nothing left to buy shabby chic coffee tables and other furniture or make the necessary changes.

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Why Don’t They Teach Kids About Buying A Home In School?

January 27th, 2017 Posted in Uncategorized
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Kids learn a lot at school. They learn about history, the Founding Fathers, how to do algebra and why rivers erode their banks. And while that’s all well and good – there’s just one problem. It’s not a practical education. Educators are often so obsessed with teaching their own hobbies and pet interests that they neglect to impart the life skills that will really help children navigate the financial world and succeed in it.

Top on the list of financial topics that should be considered in school is buying a home. Taking out a mortgage is likely the biggest financial decision a young person will make in their lives. Yet the school system right now neglects to teach this in any kind of detail. Instead, children are hyper-trained at an early age in the academics, at the cost of their social, emotional, practical, economical and financial development.

Interest Rate

interest rate sign - kids learning abut mortgages

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The first thing that kids need to understand about mortgages is the interest rate. This, in essence, is the price you pay for money. The higher the interest rate, the higher the price of money. A mortgage is nothing more than a fancy way of saying a “house loan” – and the interest paid on it is the price of having that money today.

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Term

Another idea that kids need to get their heads around is the idea of a term. Mortgages come packaged up with different terms. The longer the term, the more time a person has to pay off their mortgage. Most mortgages come with a 25-year term, but term lengths can vary, depending on an individual’s preferences.

Kids need to understand that, given a fixed interest rate, a longer term will result in a higher total amount of money paid as interest. For example, at an interest rate of 5 percent and a mortgage of $100,000, the total amount of money paid as interest over 10 years is $26,682. If paid over 25 years, however, total interest payments are more than $73,441 – nearly the total value of the loan.

Foreclosure

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When people fall behind on their mortgage payments, they may face foreclosure. Kids need to understand the consequences of not paying their creditors. Foreclosure means that the person paying the mortgage loses ownership of the house, which is then sold by the creditor to recoup their losses. They also need to understand that it is possible to get foreclosure help to prevent this from happening. Sometimes it is possible to restructure the debt or modify the household budget to make it easier to pay mortgage instalments in the future.

Mortgage Insurance

Mortgage insurance is mandatory when the value of the loan on the home is more than 80 percent of the price of the home. This protection is needed, say, regulators, to protect borrowers and creditors alike. However, in practice, it really means more money in the lender’s pocket. Kids need to understand, therefore, that borrowing money can be very expensive. It’s not just the interest rate that they need to be concerned about – it’s all the other fees that they might have to pay.

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Financial Errors Which Will Affect Your Kid’s Future!

January 26th, 2017 Posted in kids and money, Money Tips
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It’s so important that we teach kids about the importance of finance as they are growing up. That way, we can feel assured they will go on to have debt-free lives in the future. And our children tend to follow in our footsteps, so we need to be good role models for them. As well as ensuring we leave enough money for them to have great lives, even when we aren’t around anymore. Therefore, don’t make these financial errors which will affect your kid’s future!

Spending too much of your savings

Before you take money out of your savings account, you need to think carefully about whether it’s the right decision. After all, its money which could be going towards your child’s future. And you don’t want to look back and regret wasting money on meaningless things. After all, it’s so easy to keep taking money out of this account when you need to buy things for your family. But for the sake of your kid’s future, only spend savings if you really need to. Otherwise, rely on your current account and keep your savings safe for the future.

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Taking on a too high mortgage

We often can get swept up in the moment when looking at a great house. And rather than thinking about the costs, we consider how perfect it will be for our family. But you don’t want to end up wishing down the line that you never bought the house as the mortgage repayments are too large. In fact, you might get in a position where you think ‘I need to sell my house fast’. After all, it’s so easy to get into debt if you miss a couple of repayments and then you might end up in the position of getting the house taken off you. And then your child’s future will be in jeopardy. Therefore, always think carefully before taking on a large mortgage. Get financial advice first to ensure you are making a wise decision when buying property.

Financial Errors - house and calculator image

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Not getting life insurance

A lot of people don’t get life insurance. They think they won’t need it as they are young, and the payments are too large. But if something happened to you, and you have no life insurance cover, your children might end up with little money for their future. After all, most life insurance plans will pay out a significant sum to you family if something unexpected happened to you. And that money will help your kids to continue having a good life. Therefore, you need to ensure you are covered for the sake of your child’s future. And for the sake of your kids, make sure you get a will too. After all, this will ensure your wealth and estate end up in the right hands after your passing. And as we said before, without one, your inheritance might not match your personal preference. Therefore, get this sorted at a solicitors as soon as possible.

And make sure you set up an account for your kid sooner rather than later. You can put money in there which they can use when they are old enough to put towards things like college and their first home!

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Mortgage Money Matters: Essential Steps Before Buying a Home

January 10th, 2017 Posted in Money Tips
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Buying a home is a huge step in your life. Some people do it as soon as they can, while others choose to wait or aren’t able to buy property for a long time. When the time finally comes that you’re considering it, it’s essential not to rush into the process. Property doesn’t come cheap, and most people can’t afford to pay in cash. The financial aspect of buying a home is the most important thing to think about. There are some big issues to consider before you make the leap and become a homeowner for the first time. Take these steps before you do anything.

Are You Financially Prepared?

In advance of making any moves towards buying a house, you need to check up on your financial situation. There are several things you need to think about to make sure you’re financially stable and ready to purchase a property. Of course, your income is important. Lenders will look at how much you earn to see what you can afford. However, you also need to remember that how you spend your money is important too. Your credit score can have an impact on whether you can secure a mortgage. And, of course, there’s a down payment and other costs to think about.

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Work Out What You Can Afford

If you think you’re ready to buy a home, you need to think about what you can afford. What you think you can afford and what lenders think can be different. You might overestimate what lenders could be willing to give you. On the other hand, a mortgage lender might surprise you with their offer. You should try to think about your mortgage in terms of monthly payments. Take a look at how much you currently pay in rent and other costs. Of course, it’s also important to consider the size of your down payment.

Get Mortgage Advice

You might think you’re ready to jump straight into looking for a mortgage. However, before you go ahead, you should consider seeking some advice. You can get mortgage advice from a number of places. You might choose to use a mortgage broker like Mortgage Solutions or a similar service. You can also find mortgage information online, which allows you to read about mortgages for free and make comparisons. However, it’s often best to see someone in person so you can discuss your particular finances.

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Remember the Extra Costs

Before buying a home, it’s essential to remember the extra costs involved. It’s not just the house itself that can cost you money. You may also need to pay for a variety of things during the buying process. For example, you might need a lawyer or to conduct a number of surveys on the condition or even the land boundaries of your property. It’s important to be aware of these extra expenses and prepare for them before you start looking for a home. Overestimating the costs is always better than underestimating.

There are lots of money matters to think about before purchasing property. Don’t leave it too late to consider them.

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