Continuing on from last week’s news of Government intentions to relax planning laws, the Telegraph and Sunday Times both reported on the reality of trying to raise the extra finance via the mortgage. Tighter lending criteria and lower property valuations could push a borrower into a higher loan-to-value bracket – which in turn could increase the rate, but could also make it difficult to raise any money at all. If a borrower already has a flexible or an offset mortgage, they may already have a drawdown facility, but otherwise brokers recommend talking to the existing lender first before looking at remortgaging away. Lenders including Abbey and Virgin Money have cut the cost of their 2 year fixed rates in recent weeks, but the Financial Times warned that longer-term deals offer better value. With no prospect of a base rate rise in sight, brokers suggested that 5 year fixed or variable rates make more sense. In protection news, figures in the Sunday Times revealed that only 5% of all life insurance policies are written in trust. Experts said it costs nothing to do and has no disadvantages, as the insurance money will be paid much quicker if it is kept out of the estate on death, and any payout is also kept separate from the estate for Inheritance Tax purposes. Finally the Mail on Sunday reported on the new equality rules which take effect on December 21st this year, leaving just 3 months for women to apply for cover under current pricing and allow time for the policy to go on risk. Consumers who apply closer to the December deadline may find they are offered cover at a different price to that quoted originally.
What the papers say – 15th and 16th September 2012