Monday, 17 July 2017

Five reasons to consider a trust

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Most people understand trusts as a vehicle for mitigating or eliminating inheritance tax, but they are much more flexible than you might think.

1. Managing Assets

Some trusts are flexible and they can be tailored to individual situations. For example, for beneficiaries who do not have the capacity or wish to manage assets, for clients who cannot be trusted to own the asset outright or to avoid conflicts between heirs. Through a trust that is managed by trustees, assets can be distributed to the beneficiaries over time.

2. Protecting assets

Placing assets in certain types of trusts can protect them from creditors, marriage breakdown or from those who might influence beneficiaries. 

3. Flexibility

Some trusts offer clients the flexibility to make a gift into trust for chosen beneficiaries, but still continue to receive a benefit. Some trusts also allow the trustees to retain control beyond age 18, but without it being or becoming a discretionary trust.

4. Minimising tax

Most people understand trusts as a vehicle for mitigating or eliminating inheritance tax. Assets that are placed into trusts are given to the beneficiaries and are no longer part of the settlor's estate, provided the settlor survives seven years. Even if the settlor dies within seven years only the value of the gift is included within their estate, meaning that from day one the growth is outside.

5. Avoid probate

As assets within a trust don’t belong to the settlor, in the event of their death the value of the asset is not included in the estate for probate purposes. Also, when dealing with life policies the insurance provider will be able to pay the death benefit quicker as they can pay the surviving trustees (legal owners) and don’t require the grant of representation.

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Wednesday, 31 May 2017

Mortgage Conveyancing 101

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Once you have found a property and you have started the process of putting a mortgage in place, you need to select a conveyancer to process the legal side of purchasing a property. Conveyancing can be done by property solicitors and conveyancers and their job is to look after all the legal work once your mortgage offer has been accepted, this includes:

  • Dealing with the Land Registry
  • Stamp duty charges and payments
  • Collecting and transferring money
  • Providing legal advice and recommendations
  • Drawing up and assessing contracts

Choosing a solicitor or conveyancer is extremely important and it is best to make sure you choose a firm that specialises in property transactions. We would always recommend that you ask your financial adviser to provide you with the names of reputable solicitors with whom they have worked alongside previously. This is by far the safest option. Your estate agent may also recommend their in-house service or an external company and this is also something you may wish to consider. Whatever you do, do not make your decision purely based on price. The firm you pick will be responsible for all of the legal work surrounding your property purchase, and if they miss anything or make a mistake, it could end up costing you a lot more than the amount you saved by choosing the cheapest service.

Conveyancing fees range from around £500 to £1,500, depending on the cost of the property and whether you're just buying, or selling one home and buying another. The cost will also depend on how complex the property transaction is and therefore how much legal work there is to do. A good solicitor will be able to provide you with a quote upfront so that you can see what exactly will be covered.

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Wednesday, 15 March 2017

Our Top 5 tips for Getting a Mortgage

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Taking out a mortgage is likely to be the biggest financial commitment you’ll ever make, so you'll want to find the best deal you can. And the good news is there’s plenty you can do to improve your chances of getting your mortgage application accepted.

1. Your credit score matters

Before applying for a mortgage, get a copy of your credit report which is held by credit reference agencies such as Experian or Equifax. Part of the lenders review process is to find out how much of a risk you are based on your credit history. Don't worry if it doesn't look that great, there are lots of things you can do to help. For example, ensuring you are on the electoral role and closing down credit accounts that you no longer use.

2. Thinking of changing jobs? Don't.

Most lenders will want to see that you’ve been with your employer for a decent length of time before they’ll give you a mortgage, so if you’re thinking of changing jobs, it’s a good idea to wait until you’ve got your mortgage in place. Usually, it’s a good idea to have been in your existing job for at least three to six months before applying.

3. Reduce your debts

Before you apply for a mortgage, try to reduce any debts you have as this will help demonstrate that you manage your money responsibly, and will mean any mortgage application you make is more likely to succeed. It will also mean you will potentially be able to borrow more when it comes to a lender’s affordability calculations.

4. Save a decent deposit

The more you can save up to put down as a deposit, the bigger the choice of mortgages that will be available to you. Lenders reserve their best rates for those with larger deposits, so you’ll also benefit from lower monthly payments because you’ll have qualified for a better deal.

5. Get the information right on your application

Once you’ve started your mortgage application, don’t start changing figures as it could hold up your property purchase. For every material change made to the application it will need to be reassessed to ensure that it still falls within the lenders criteria. This may not be a major problem, but would probably delay a potential offer.

If you’re struggling to find the right mortgage deal, or you don’t know what you’d be eligible for or how much you can borrow, we can help. We can research the whole of the market for you and help you through the application process. An initial consultation is free of charge.

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