How to avoid the Identity Fraud horror story

Scary Monster Halloween Hands Use Laptop Computer with Blank ScrAt Halloween people spend a lot of time, effort and money pretending to be ghosts, monsters and other scary characters.

But online identity fraudsters can spend the whole year prowling the web for the things they’re after.

And once they have enough of your personal details, they can apply for credit in your name and run up debts without you knowing.

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Brexit: What’s the latest, and how does the interest rate cut affect homeowners?

brexit-interest-rate2After the political whirlwind of the last couple of months, it appears the country’s immediate future may be becoming a little clearer.

Now that Theresa May has taken office as Prime Minister, she will agree the government’s negotiating position before she triggers Article 50, and officially starts the clock on the UK’s exit from the EU.

According to the latest speculation, it seems unlikely this will happen before the end of the year but she announced “Brexit means Brexit and we’re going to make a success of it.” David Davis has been appointed as Secretary of State for Exiting the European Union and will lead negotiations for Britain to leave the EU, while trying to maintain access to the single market.

While it may be some time before everything becomes clear around the financial and economic impact of Brexit, the recent announcement from the Bank of England (BoE) around reducing interest rates to 0.25% is likely to impact many of us.

Interest rates were last lowered to 0.5% in March 2009. This is the lowest they’ve been on record.

Why have interest rates been lowered?

Because of a number of reasons, the pound has fallen to a seven year low against the dollar, and has slipped against the euro. When the BoE lowers interest rates it’s typically done to boost the economy.  

How could lower interest rates benefit me?

Lower interest rates mean savers are worse off than borrowers. This is because they’re not generating lots of interest on their savings. Spenders however are paying lower interest on credit making borrowing cheaper.

Five years ago, the average mortgage interest rate was 3.84%. Today, you could get interest rates as low as 0.99%.

This table shows what this could mean to your disposable income. The calculations have been worked out on a 5 year fixed mortgage for £220,000 spread over 30 years, with a £1,000 arrangement fee (the fee the mortgage provider charges).

Figure 1: What interest rates could mean for your disposable income

 

Interest rate

3.84%

2% 1.15%
Repayment cost p/month £1,030.12 £813.16 £772.87
Total cost of borrowing (over deal period – inc. fee) £62,807.33 £49,789.77 £44,372.03

(Source: Figures from the mortgage calculator on This is Money)

Typically, if you have a higher house deposit you should get a better rate.

Does this mean I should buy a house?

It’s very easy to get excited and think ‘let’s go out and buy a house right now’,  but please stop and think. Look at figure 1 and assess what happens if interest rates rise. Can you still afford it?

Related article: How prepared are you for an interest rate rise?

Also, since the last recession the government have introduced mortgage affordability rules which mean mortgage providers have to go into a lot of detail about your income and outgoings.

Your income will be analysed and evidenced – there is also likely to be increased scrutiny for those who earn commission, bonuses or are self-employed. You may be asked questions around:

1.       Income, retirement plans and family situation – how many years would you like to pay your mortgage over, when would you like to retire, what is your income and how many children do you have?

2.       Bills and regular outgoings – what will you be paying for utilities (gas, electricity and water bills), TV and phone packages, council tax, insurance (life, home, car, pet etc.), essential travel (such as getting to work), housekeeping (e.g. food, toiletries etc),  maintenance for a child or spouse, school or college fees and regular saving and investment contributions.

3.       Debts – what other mortgages or secured lending do you have, do you have personal loans and hire purchase agreements (such as a car) and what are your credit card balances?

4.       Your lifestyle and money management – what are your spending habits; or do you have large one off payments?

What could I do in order to prepare to get a new mortgage or to re-mortgage my property?

  1. >Create a budget and see how you’re managing your money. Based on the above, what could you do differently?
  2. If you can try to reduce or pay off credit card or loan balances as this could increase the amount you are eligible to  borrow, and can have an impact on  the mortgage rates available to you.
  3. Use an online mortgage calculator to see if you could afford an increase in mortgage rates.
  4. Sign up to CreditMatcher to see your free Experian Credit Score and compare mortgage options †  .

†Experian acts as a credit broker and not a lender in the provision of its CreditMatcher services, meaning it will show you products offered by lenders. Experian acts independently and although CreditMatcher shows products for a range of lenders it does not cover the whole of the market, meaning other products may be available to you. CreditMatcher services are provided free however we will receive commission payments from lenders or brokers we introduce you to. For information about the commission we receive from brokers for mortgages and secured loans click here.

CreditMatcher is provided by Experian Ltd (Registered number 653331). Experian Ltd is authorised and regulated by the Financial Conduct Authority (firm reference number 009743). Experian Ltd is registered in England and Wales with registered office at The Sir John Peace Building, Experian Way, NG2 Business Park, Nottingham, NG80 1ZZ.

Copyright © 2016, Experian Ltd. All rights reserved.


 

Why choose Shared Ownership?

The home ownership dream can seem more out of reach than ever, with mortgage affordability rules making the home-buying process more complicated. And ever-increasing house prices mean that many hopeful homeowners usually have to find larger deposits than before.

According to the Nationwide House Price Index, the average UK property price in October 2015 was £196,807 – up from £173,678 in October 2013 (a rise of 13.3 per cent). On a mortgage that offers 90 per cent loan-to-value (LTV), this means finding a deposit of nearly £20,000, with estate agent and legal fees on top of that too.

More information: What type of mortgages should I get?

So what for the hopeful at the foot of the property ladder? One potential solution is part-own, part-buy – Shared Ownership. A step that yours truly took a few years back and have never regretted.

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Experian Credit Score is now FREE. FOREVER.

The cat’s out of the bag – for the first time, the UK’s most trusted credit score* is now free, for everyone**, forever.

That’s right – the Experian Credit Score, which shows you how lenders may view you, and can be a useful thing to know when you are thinking of applying for credit.

To get your Experian Credit Score FREE forever, sign up to our new CreditMatchera free independent service that helps you compare credit deals you’re more likely to get, based on your credit information.

We are a credit broker not a lender, working with selected lenders.

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Car finance: how to get the deals you want

Buying a car - car finance dealsFrom 1 September, all new cars for the next six months now have the new 66 number plate.

Britons bought more new cars than ever before in 2015 – over 2.5 million, and many predict that 2016 could end up seeing an even higher total as motorists try to avoid car tax reforms set for next April.

Car finance is one of the most common examples of how we pay for ‘large ticket’ items, and a good credit rating can be the difference between getting a good interest rate or not, or sometimes getting any deal at all.

Applying for a loan
If you’re planning on a car finance loan, it’s a good idea to check your Experian Credit Report before you make the application. This allows you to see what the lender would use about you, and gives you the chance to correct any inaccuracies and update any out-of date information. The credit score the lender gives you helps them decide whether to accept you as a customer or not – usually, the higher your credit score, the better your chance of getting your loan.

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Planning a wedding for 2017

Couple Walking While Guests Throwing Confetti On ThemPlanning to get married in 2017? Now is as good a time as any to start saving, as the costs can creep up on you without you realising.

Estimates vary as to the average cost of a wedding in the UK.  Some experts say £17,000, some say £20,500, some, after itemising various parts, say as much as £30,111.

Experian research* in 2014, of people recently or soon to be married, found that almost seven in ten (69%) pay for their wedding from savings, while around one in five are using some form of credit, whether that be a card, a loan, or paying in instalments.

In fact, 43% of cohabiting couples had postponed their wedding by an average of a year and two months – due to running into difficulties with their pre-wedding financial planning.

8 quick tips for budgeting for a 2017 wedding

  1. One year to go is a great time to set achievable targets with clear landmarks ahead – and there’s no better target than the big day itself. Continue reading

Peer pressure: the £6bn hidden cost of raising children?

Girls textingAs the school holidays come to a close, parents up and down the country are making sure they’ve bought enough stationery, school uniforms and so on ahead of another year of education for their children. 

But as well as the essentials, there’s often a hidden cost. New research* (from Sainsbury’s Bank) has found that almost half (48%) of parents feel they need to spend money on items for their children based on peer pressure, such as the latest smartphones, the trendiest clothes or the biggest parties.

This can add £865 to the average annual family household outgoings – making nearly £6 billion in total across the UK.

What are the main ‘peer pressure’ costs?
Not surprisingly, the desire to have the latest technology like phones or tablets tops the list (44%), with fashionable clothing (43%) and school trips/excursions (42%) next up.

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Graduate debt on the rise: 5 tips for new students

A new world of university life is shortly set to open up for thousands of teenagers.

Most new students realise they’ll leave university with a loan they’ll spend years having to pay back once they’ve made it into the world of work.

But new research shows that new graduates will face average debt levels over a third of the average outstanding mortgage.

By the time they start paying back their loans – maintenance and tuition fees – their debts will be well in excess of £41,000, according to The Money Charity,  which is 35% of the average outstanding mortgage (£117,162).

And how you manage any credit you have now can affect your chance of getting credit in the future.

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I keep getting mail for someone who doesn’t live at my address

By Neil Stone, Social Media Executive

man receives bad news in the post.Post in other people’s names
It’s great to come home and find letters waiting for you on your doorstep but when the letters turn out to be for a previous resident or even someone that has never lived at your address it can be frustrating. If it’s a demand for payment it can also be understandably worrying.

The good news is that as long as you have no financial connection to the individual (such as joint account) then their information will not affect your credit report in anyway.

This is because all credit checks are done by name, and not address, so lenders won’t see or use information relating to the other person when checking your report.

The best thing to do is to return the letter unopened to the sender clearly marked as “not at this address”. The lender should then look for their customer elsewhere.

Sadly we can’t prevent a person from using an address to apply for credit, or stop lenders from contacting their customers at an address, but by regularly returning the post the lender will stop trying to contact them. Continue reading