Archive: Jan 2017

Mortgage Intelligence update: Are your clients considering the limited company option?

With changes in tax relief for landlords just around the corner, Head of Mortgages and Insurance Stephanie Charman takes a look at why some are considering the much-publicised limited company option.

With rates holding low at 0.25%, investing in property could still be a good idea for many. This is despite the tax changes that are due to begin from April 2017, at which point the tax relief that landlords of residential properties receive for finance costs will start to be restricted to 20%. This change will be gradually phased in to be fully in place by April 2020.

So why limited companies?

Limited companies set up for the sole purpose of buying and letting property, will not be affected by the upcoming changes. That’s why many landlords are considering setting up limited companies to mitigate the personal impact. As this demand for limited company loans increases leading up to April, some lenders have updated their product ranges to cater for this emerging demand.

Research from leading buy to let specialist lender Kent Reliance has revealed that more landlords are already moving their buy to lets into limited companies. In fact, the lender revealed that over 100,000 buy to let mortgage loans were issued for limited companies before December 2016. This is double the figure of the whole of 2015, suggesting that more and more people are considering the option.

But is limited company the right choice for your client?

There is no easy answer, although it may be a possible solution for some circumstances. They may be considering using the limited company strategy whether they are a professional landlord, an investor with a portfolio or even looking at purchasing their first buy to let property.

Although there is no way to avoid the changes in stamp duty on second homes, setting up a limited company and becoming a corporate entity may indeed mean avoiding the changes in tax relief. But this is a complicated area and these tax changes will often affect each landlord differently. That’s why talking to you about their mortgage needs and seeking tax advice from an accountant, will help prepare your clients for any decision on their buy to let investment.

If you would like to know more about how to join our award-winning Mortgage Network as an appointed representative or becoming a member of our Mortgage Club, call our Broker Support Team on 0845 130 7446, option 1.


Mortgage Intelligence update: Five ways your clients can help their children onto the property ladder

With plenty of options out there for first-time buyers, Head of Mortgages and Insurance Stephanie Charman takes a quick look at five ways your clients can help their children with buying their first property.

In a time when we are continually facing property price increases, it may be hard for first-time buyers to save up enough money for a mortgage deposit or have adequate affordability to purchase their first home. To help, we have put together five ways your client may be able to help their child overcome the difficulties of getting onto the property ladder.

Gifted deposit

A simple way your client can help is to offer their child all or part of the required deposit. By raising the deposit from 5% to 10%, it could help improve the child’s affordability and reduce their monthly repayments. If they do decide to gift a deposit, they must sign a written agreement to confirm it is a gift, otherwise this may be treated as a loan by lenders and could affect the child’s affordability.

Equity charge

If they don’t have the cash available to gift to their children, they could consider equity charge. This is where they put a collateral charge on the family home instead of their child paying a deposit. It is however worth bearing in mind that not all lenders allow this in their criteria.

100% guarantor mortgages

Another option is a guarantor mortgage where a charge is placed against your client’s home. This means that the amount their child can borrow is based on a combination of their own and their child’s income and assets. This could allow them to receive a 100% mortgage. However, there is associated risk, as they would be guaranteeing that the repayments are made. This means that the guarantor’s home could be at risk in the event that their child failed to pay.

Family offset mortgages

Alternatively your client could consider a family offset mortgage. This type of mortgage enables parents to offset the value of their savings against their child’s mortgage so they may pay less interest. This is because their savings offset the sum of the mortgage that interest is charged on. As a consequence they may not always receive interest from their savings.

Getting them mortgage ready

Perhaps the best way your client can help is to make sure their children are ready for the responsibility of applying for and having a mortgage. They could make them aware of budgeting and affordability so that their children have a realistic idea of what owning a home may cost them each month. After all it is not just the mortgage repayments they have to think about.

Experts have also reported that many younger people are unaware of the extra costs that arise on top of having a deposit, such as stamp duty and surveying fees as well as solicitor fees. If they need help to save money for this, the parent could help them open up a Help to Buy ISA or a Lifetime ISA. These ISAs will support their children with their savings whilst also receiving a 25% government bonus on limited deposits.

Additionally, they could offer advice on improving their child’s credit score, as this is a common problem when first time buyers apply for a mortgage. A credit score is often an important part of lenders’ underwriting process to decide whether the applicant is suitable for the product.

If you would like to know more about how to join our award-winning Mortgage Network as an appointed representative or becoming a member of our Mortgage Club, call our Broker Support Team on 0845 130 7446, option 1.


Mortgage Intelligence launches new protection offering for advisers

Mortgage Intelligence network have today announced a revitalised and exciting new protection proposition, available to both Appointed Representatives and Directly Authorised members of their club Next Intelligence.

The new offering includes two brand new protection panel options: Whole of Market and PRIME. These new panels are designed to deliver not just competitive commission rates for advisers, but a host of comprehensive product options as well.

To ensure their new offering best fits the current market, the Network is excited to announce that these panels include a number of new specialist Income Protection Providers, plus some new entrants into the protection market.

Building on the launch of the new panels, Mortgage Intelligence has now also partnered with iPipeline to provide advisers with SolutionBuilder®. This intelligent quote-and-apply system compares protection needs easily, all within a simple and responsive interface. As part of a complete service, SolutionBuilder supports both single and multi-benefit products to help advisers identify the right solution for their client’s needs and budget.

Sally Laker, managing director of Mortgage Intelligence, was delighted to comment on the new offering: “A key part of our strategy for 2017 is making it easier for advisers to ensure their clients are suitably protected. We feel the introduction of our new protection panels alongside SolutionBuilder, will enable both Appointed Representatives and Directly Authorised members the opportunity to provide innovative solutions based on their client’s needs and budget.”

Paul Yates, product strategy director at iPipeline said: “We love working with forward-thinking firms such as Mortgage Intelligence. They are committed to growing the protection market and delivering the best possible client outcomes. iPipeline has a proven track record of helping advisers to improve the range and level of protection policies written for their customers. Mortgage Intelligence is investing in the best possible tools and support to ensure their advisers deliver an unparalleled proposition for protection.”

Building on an already successful year for protection in 2016, Mortgage Intelligence are committed to providing advisers with the right panels, the best software and the high standard of service they need to protect clients even further in 2017.

Ends

Editors’ notes:

To arrange interviews and find out more, please contact:

Sally Laker
Managing Director
Mortgage Intelligence Holdings

Lisa Ramsay
Group Press Office Manager
Mobile: 07721 439043
Email: press.office@countrywide.co.uk

Media Enquiries
Jenny Burt, Marketing Manager, 01242 211726, jburt@ipipeline.com

About iPipeline UK
iPipeline UK is a leading provider of business intelligence, e-quote, e-application, policy delivery, and policy holder services to the UK life and pensions market. iPipeline offers the UK’s broadest range of integrated and licensed solutions used by leading providers, distributors, and their IFAs via their Websites or CRM systems. To learn how you can better use iPipeline’s industry-leading solutions to streamline and accelerate your business activities, visit us at www.ipipeline.com/uk.


Mortgage Intelligence Protection Update: Meet the Spencer Family

Head of Mortgages and Insurance Stephanie Charman takes a look how AIG’s Spencer Family can help advisers talk to clients about protection.

Protection provider AIG Life has announced the launch of a fictitious family called ‘The Spencers’. It seems case studies and real life scenarios are currently very effective in helping advisers talk to clients about the benefits of cover, which is why AIG have created The Spencer Family. Spanning a full four decades, this relatable family will help advisers further illustrate how AIG protection policies affect people of all ages.

AIG want to begin 2017 with a new way to explain how their protection products can benefit the lives of ordinary people and their loved ones. The extensive family covers 1,219 years’ worth of lives, to demonstrate AIG propositions and how they help people facing difficult economic and medical circumstances.

Consisting of 33 members, the Spencers will bring to life the real uses of protection products. AIG intend to make the family members a big part of their campaigns in 2017, as well as some of their literature throughout the year. The family will be used to highlight protection topics such as care needs and children’s critical illness cover.

In an under-insured nation, we embrace any way that helps you show why protection is such a good idea. If you would like to know more about how to join our award-winning Mortgage Network as an appointed representative or becoming a member of our Mortgage Club, call our Broker Support Team on 0845 130 7446, option 1.

If you want to find out more about who the Spencer Family are, visit the AIG page to discover a fresh way to ensure your clients understand how AIG products can benefit and aid them.