Decorating!

At the moment we are knee deep in decorating, we have decided to be sensible and only ‘do’ one room at a time. The lucky room this month is that of our toddler, he has had 1970’s brown wall paper surrounding him for long enough!

So, how do you go about achieving that perfect child friendly haven (minus Thomas the Tank wall frieze)

 

You need to bear in mind that children’s rooms will over the years go through various changes as the child grows, fads will come and go.

Simple layouts and a basic colour scheme are best; these schemes can either be added to or completely changed with little effort.

 

There are three stages that your child will go through, baby to small child, pre-teen, and teenager. Planning is key in getting exactly what you want, staying to time and on budget.

Before decorating the following elements need to be considered, structure, storage, lighting, flooring and overall colour scheme.

 

Furniture should be sturdy and simple. This type of furniture will grow with your child.

Once the basic room layout has been decided and executed (walls moved, windows added etc) it’s time to consider storage. Try and keep all the storage to one area in the room as this leaves plenty of space to play, and gives the room a feeling of space.

Fitted selves are a good idea, under the bed is always good for hiding things away, you could invest in some big wide containers to keep all toys together.

 

Lighting is very important, all decisions about what will be needed electrically, needs to be thought out in the planning stage, ensure you have enough sockets and switches ( before you know it, a computer, I pod docking station and TV will be the requirement, taking over from all soft toys)

As in most rooms there will be areas where task lighting will be necessary (from baby change to homework)

Dimmer lights can be good, they can allow for soft baby lighting and bright task lighting.

 

Flooring should be considered carefully, it needs to be practical and hard wearing. Hardwood floors are good but you will need to soften it with a rug, little ones spend a considerable amount of time on the floor. Consider the colour of the carpet, too light and it will be a dirt magnet, too dark and every bit of fluff is clearly visible. A lightish neutral colour is best.

 

Keep the colour scheme complimentary, use of one colour for the walls, another for all wood work (skirting, door and window surround) If you are considering a bright, bold colour, keep it to one wall, this can look very effective. The same idea can be utilised with fun wall papers.

Light colours are easy to adapt and change. Adding accessories can change and update any room.

 

When purchasing furniture, think long-term, it’s great fun having the odd specialist child piece, but bear in mind they grow quickly! Use pieces that can be adapted, for example a toy box can be converted in to a storage chest, a baby changing table can be recycled later for a chest of drawers.

 

Well we are starting on the weekend… wish us luck!

Mixed messages from lenders as rates fall, rise and stay the same

WHICH RATES ARE GOING UP?

A flurry of lenders are writing to customers to tell them that their standard variable interest rates are on the way back up.

Skipton Building Society borrowers are set to get the biggest shocks: their rates are going up 1.45 per cent – adding £101 a month to repayments on a typical £125,000 loan.

Holmesdale and Norwich & Peterborough are bringing in smaller rises, while Nationwide has increased the standard rates charged by its The Mortgage Works and UCB subsidiaries.

WHICH RATES ARE BEING CUT?

High Street players HSBC, Nationwide and Woolwich, as well as regional names such as Yorkshire Building Society, have announced lower fixed rate deals.

HSBC now has two-year fixes from 3.84 per cent and five-year fixes from 5.44 per cent, while some of Yorkshire’s new fixes are set at 0.6 per cent lower than its old ones.

Northern Rock is offering two year fixes at 3.69 per cent.

WHICH RATES ARE STAYING THE SAME?

Bank of England base rate was held at 0.5 per cent in the first week of February, despite predictions about a possible rise.

Payments on most trackers are linked to base rate so they have been held steady for the 11th month in a row.

WHICH RATES ARE WORTH CHOOSING?

Experts say more lenders will increase standard mortgage rates and cut fixed rates later this month. But the consensus is that you still pay too high a price for security on most fixes.

A better strategy is to compare the rates you would pay on your chosen lender’s best fix and tracker deals.

If you opt for the tracker, budget for the fix and put the difference between the two payments in a savings account each month.

That gives you a decent buffer fund if interest rates rise dramatically.

If you have a £125,000 mortgage with Halifax and go for its two-year tracker rather than the two-year fix, then you’ll have a war chest of £840 after the first year if you save the difference between the two repayments.

At the moment, best trackers come from HSBC, Santander and Woolwich.

Extracts from an article by Neil Simpson Daily Mail

How to stop your home being repossessed

If you are finding it increasingly difficult to meet your mortgage demands, don’t bury your head in the sand… It won’t go away. Here are a few tips to help you.

There are, according to the FSA (Financial Services Authority) one in five mortgage holders who are increasingly worried about meeting their mortgage repayments in the next twelve months. A quarter of these stated that they had no contingency plans in place in dealing with this.

The numbers of repossessions grew to 50,000 last year, more are expected this year as the economic fallout continues. The most vulnerable groups at the moment are first time buyers, those with 100% mortgages, and all of those due to come off fixed rate mortgages.

Problems are far easier to resolve, if addressed early. Mortgage meltdown doesn’t have to end in repossession. If tackled at an early stage, the lenders or indeed the court often come to an arrangement where the borrower is able to pay off the arrears.

Financial problems may be just for the interim period, if so, consider asking your mortgage lender to reduce your monthly payments for the time needed. If your financial problems look like becoming long term, re-mortgaging over a longer period or indeed even selling your property for a smaller, cheaper one may be an option.

Knowing your financial situation is vital in moving towards a resolution. A debt plan should be drawn up. You have to be able to work out what payment you can reasonably repay to your lender to cover the repayment and any arrears that have be incurred.

Once you have the debt plan, write to your mortgage lender to negotiate an affordable repayment plan.

All lenders have different policies with regard to mortgage arrears; some are more understanding than others. You must be proactive and compliant, how you deal with this situation will certainly influence any judge should this come to court.

If you have any complaints about the way your lender has treated you, they should be handled by the lenders own complaints procedure and then on to the Financial Ombudsman Service.

Court action should always be the last resort, unfortunately if an agreement can’t be reached between you and your mortgage lender, they will be allowed to serve you with a repossession order.

Your property may be sold off at auction quickly. If the property sale doesn’t cover the mortgage, you will be liable for the deficit.

It is often preferable to sell your property personally; you may get a better price than the lender selling in haste.

Don’t panic, hand the keys over and walk away, unless the property is sold or you are being legally evicted. Unless either of these happens, you are still responsible for mortgage payments and building insurance.

A word of caution, there are an increasingly large number of property companies, who are targeting financially pressured home owners, buying their homes for ridiculously low prices and then renting them back to them. You could end up paying a high rent and worse case scenario, be evicted.

Overpay your mortgage and save money

In these times of economic gloom, we are constantly looking to save money, and get the best deals available.

We are constantly looking for advice on all aspects of our financial lives.

Perhaps our biggest financial burden is our mortgage, and it is probably the one we are most laid back about. The payments are viewed as a ‘given’, they fly out each month and we all accept that we will have this debt for at least 25 years.

 

At this time of incredibly low interest rates, it would be prudent to ‘overpay’ the mortgage.

Any borrower who has seen their monthly mortgage rate drop, due to a very low interest rate (0.5%) Should just keep on paying a ‘standard level’- this could lead to overpaying your mortgage by many hundred of pounds per month.

The benefits to be had from overpaying the mortgage can be so significant that it is surprising how few borrowers actually do it. Overpaying also increases the amount of equity you have in the property, this in turn allows you access to better deals when you are shopping for new mortgage finance. It is worth noting that once the spare cash is paid in to the mortgage it is gone and cannot be used for anything else. This is the reason many of us put out surplus cash into savings etc, as it can be easily accessed at very little notice.

 

In the real world we don’t overpay our mortgages, because we’re already at the top end of what we can afford. If there is spare cash, we use it to pay off debts, save it or fund other purchases.

Most lenders will only allow a certain amount of overpayment every year, usually 10% of the overall mortgage amount, they may charge you for this privilege, this is known as ELC (early repayment charge) if you have a flexible mortgage the 10% rule will probably not apply.

With normal savings rates being particularly low, many borrowers with significant savings would benefit from offsetting, as they would earn the equivalent of the mortgage rate on their savings. This method of overpaying also allows the borrower to keep their savings ‘liquid’ as they can always access the money from the offset pot at any time. It is also worth bearing in mind that any interest you earn on your savings is taxable at your highest rate of income tax, which might be 20%, 40% or, as of April 50% for the highest earners. If you use your savings to overpay your mortgage instead, not only are you effectively earning interest on them at the mortgage rate, but because they no longer technically exist as ‘savings’ you do not pay any tax.

Overpay your mortgage and save money

In these times of economic gloom, we are constantly looking to save money, and get the best deal available.

We are constantly looking for advice on all aspects of our financial matters.

Perhaps our biggest financial burden is our mortgage, and it is probably the one we are most laid back about. The payments are viewed as a ‘given’, they fly out each month and we all accept that we will have this debt for at least 25 years.

 

At this time of incredibly low interest rates, it would be prudent to ‘overpay’ the mortgage.

Any borrower who has seen their monthly mortgage rate drop, due to a very low interest rate (0.5%) Should just keep on paying a ‘standard level’- this could lead to overpaying your mortgage by many hundred of pounds per month.

The benefits to be had from overpaying the mortgage can be so significant that it is surprising how few borrowers actually do it. Overpaying also increases the amount of equity you have in the property, this in turn allows you access to better deals when you are shopping for new mortgage finance. It is worth noting that once the spare cash is paid in to the mortgage it is gone and cannot be used for anything else. This is the reason many of us put out surplus cash into savings etc, as it can be easily accessed at very little notice.

 

In the real world we don’t overpay our mortgages, because we’re already at the top end of what we can afford. If there is spare cash, we use it to pay off debts, save it or fund other purchases.

Most lenders will only allow a certain amount of overpayment every year, usually 10% of the overall mortgage amount, they may charge you for this privilege, this is known as ELC (early repayment charge) if you have a flexible mortgage the 10% rule will probably not apply.

With normal savings rates being particularly low, many borrowers with significant savings would benefit from offsetting, as they would earn the equivalent of the mortgage rate on their savings. This method of overpaying also allows the borrower to keep their savings ‘liquid’ as they can always access the money from the offset pot at any time. It is also worth bearing in mind that any interest you earn on your savings is taxable at your highest rate of income tax, which might be 20%, 40% or, as of April 50% for the highest earners. If you use your savings to overpay your mortgage instead, not only are you effectively earning interest on them at the mortgage rate, but because they no longer technically exist as ‘savings’ you do not pay any tax.

Tasha's overdraft

My sister rang tearfully last night to tell me that she could no longer come up to the smoke for our annual sister bonding shopping trip. She explained that she was up to, and possibly overflowing from, her overdraft limit. This is not a new conversation with Tasha, my much younger ‘shopoholic’ sister. She has absolutely no will power, she sees it, likes it and then, really must have it!

I calmed her down, and eventually managed to drag out of her the true extent of her debt…

She has a £12,000 overdraft limit at Natwest, £8,000 at Lloyds (they really are there for the journey!) She also owes £36,000 on credit cards! Tasha is not a high earning entrepreneur, oh no, she is a primary school teacher. She has become so used to being in debt that she actually sees her overdraft facility as her money.

In real terms what is this actually costing her? Natwest charges 12.73% annually, if my sister exceeds her overdraft limit it goes up to 20.50%. If she writes a cheque, which takes her over her overdraft limit, the bank charges £35 to honour it.

For every ten people there is one (just like Tasha) who lives in the red, pay our banks the equivalent of a kidney each month, and are forced onto the scrapheap of higher rates on credit cards etc.

So I have decided upon a plan of action for Tasha, I am going to take her under my wing.

I have told her to cut up her credit cards, perhaps keep one, with a low limit of say £500.

She needs to be honest with her bank manager; it’s his job to help her. She needs to have realistic expectations as to what she can actually afford to pay back. Tasha effectively needs a payment plan.

I have asked her to write down a list of all outgoings and the amount she has going in. It’s a good idea to go shopping with cash, the amount being spent is much more visual, and when it’s gone, it’s gone!

She needs to take control, admit there is a problem, and start to live within her means and above all walk past those designer shops!!

Eventually, I told her that she may even be able to save a little.....well all journeys begin with a single step.

Mortgage approvals drop sharply

Figures revealing a sharp drop in mortgage approvals in January have confirmed that the UK housing market made a slow start to the year. The Bank of England said that the number of home loans approved for house purchases in January fell by 17% compared with the previous month.

The 48,198 approvals was the lowest number for eight months, but still 43% higher than a year earlier. Experts have said the end of the stamp duty holiday was behind the drop. The stamp duty threshold dropped back to £125,000 on 1 January, prompting a rush on mortgage approvals and completed home sales in the final months of 2009.

The government concession, which had temporarily pushed the threshold up to £175,000 for just over a year, had been aimed at halting the rapid slump in the property market.

Housing dip

Gross mortgage lending fell from £13.5bn to £10.2bn in January, with commentators also pointing to the severe winter weather as affecting housing market activity. A range of groups, including the Council of Mortgage Lenders and the British Bankers' Association, have said that lending and activity dropped at the start of the year. Last week, Nationwide building society pointed to the slowdown in lending as the reason behind the first fall in UK house prices for 10 months.

The Nationwide said average property values dropped by 1% in February compared with January, with the average home worth £161,320. All sectors - including the mutual sector - had felt the effects of the slowdown at the beginning of the year, according to Adrian Coles, director general of the Building Societies Association (BSA).

"Activity was subdued and this has been felt by all lenders. Low activity in the month was expected following the surge of buyers aiming to beat the end of the stamp duty relief in December," he said. "The adverse weather conditions experienced at the start of the year have further suppressed market activity."

Simon Rubinsohn, chief economist of the Royal Institution of Chartered Surveyors (Rics), said: "Our judgement is that this downturn in transactions will prove temporary and that buyer interest will have rebounded in the February data."

The Bank of England figures also indicate that the record low Bank rate of 0.5% - and low variable mortgage rates - has deterred people from signing up to new fixed-rate mortgages. The number of homeowners remortgaging dropped to 23,611 in January, from 27,322 in December.

Savers' flight

Borrowers' safety-first approach to borrowing on credit cards, personal loans and overdrafts appears to have eased, consumer credit figures show. Some £500m was borrowed above repayments in January, up from £265m in the previous month. Within this, net credit card borrowing increased by £171m and other loans and advances increased by £330m. Repayments had outstripped borrowing for most of the second half of 2009 as borrowers also found it difficult to secure further loans.

For the 11th month in a row, savers took out more money than they deposited in building societies. This reached £755m in January, in figures which now include the mutually-owned Co-op Bank - which owns the former Britannia Building Society.

"January is typically a challenging month for savers as many start to repay debt accumulated over Christmas," Mr Coles said. "Nonetheless, mutuals will continue to find it difficult to attract savers as long as the Bank rate remains low and the market is distorted by part-nationalised banks."

He welcomed the move that would end the 100% guarantee on savings held with Northern Rock. In three months' time, the safety net will revert to the first £50,000 for each saver in Northern Rock that is offered under the Financial Services Compensation Scheme.

Article from BBC News Website 01 03 2010