In these tough times its hard to get a mortgage, there was 22,051 mortgages approved in December an increase on November’s figures according to the British bankers association. For those lucky ones who have managed to get a mortgage it’s just as important to protect your self against losing your home.

Income protection is an umbrella term for insurance policies which pay a lump sum or monthly income to you, the policyholder, if you are unable to work. They are designed to assist you financially by paying the mortgage and the bills if you are unable to work due to accident, sickness, redundancy or death.

There are many Insurance Providers on the market who offer their own versions of Income Protection, it would be easier if generic terms were used, unfortunately the providers use their own terms for their products, making comparing products and choosing the right policy confusing. The following are the most popular terms used by providers and their general meanings. Clients may choose one or all of the following.

Mortgage Protection is linked to your salary and monthly mortgage payment. These policies are designed primarily to pay your mortgage plus a little extra, (usually 133% of your monthly mortgage payment), in the event of Sickness, Accident or Unemployment.  These policies will pay for either 52 or 104 weeks while you recover / or look for alternative employment. You may take Accident and Sickness only, or Accident Sickness and Unemployment.

Income Protection (also known as Permanent Health Insurance – PHI) this is the Rolls Royce version of Mortgage Protection. These policies offer a larger monthly income to cover the cost of not only the mortgage, but bills, food – anything your salary would usually pay for. In addition these policies pay long term, i.e. until you return to work, until the end of the policy term or until you die.

Death Benefit policy pays a lump sum on your death. If you have a family it is wise to insure the mortgage amount and then some, if you have young children and the mortgage is repaid your partner will still have monthly expenses for bills and food. Most death benefit policies will pay early if you are diagnosed as being terminally ill.

Critical Illness Benefit offers either a monthly income or lump sum payment if you are diagnosed with a critical illness such as cancer. Can be taken for the full mortgage amount, or a smaller amount e.g. 2 years salary to pay mortgage and bills while you receive treatment.

The Government has also announced 3 new schemes that lenders should be able to advise you on.

1) The Support for Mortgage Interest (SMI) for those on Income Support, income-based Jobseeker’s Allowance, income-related Employment and Support Allowance and Pension Credit offers help on loans up to £200,000.

2) The Homeowner Mortgage Support Scheme helps couples facing hardship, where one partner has lost their job, by deferring a portion of mortgage interest for up to two years.

3) The Mortgage Rescue scheme, offers families and the elderly either a shared equity option on their home or a Government mortgage, allowing them to remain in their home.

If you want to know more about protecting you mortgage, then contact Click n go Mortgages here.

Remortgaging means replacing an existing mortgage with a new one from a different lender and getting the cheapest remortgage available to you although it is not uncommon for people to say they have arranged the cheapest remortgage when they have simply taken a new remortgage from their existing lender.

Here are some good reasons to find the cheapest remortgage:
You can take out the cheapest remortgage at a lower interest rate which will reduce your monthly mortgage or loan payments. This is the most popular reason. If this is your motivation you should look at the rate you currently pay and then see if there are any cheap remortgage rates on the market.

To raise cash or release equity. This is an option if your property has increased in value, or if you’ve paid off some of your mortgage, and is simply a matter of borrowing more than your current mortgage debt.best-remortgage-guides.asp  

It’s cheaper to extend than to move house. You may find that it’s cheaper to remortgage to raise money for an extension than to move home if you add up all the removal costs, stamp duty etc. This will be a very common option in today’s market.

Remortgaging to consolidate debts. This is cheaper than taking out a personal loan or using credit cards. This is because interest rates on mortgages can be as low as 6% while the cheapest personal loan rates are about 9% and standard rates on most popular credit cards are as high as 19%. Therefore to consolidate bills, personal loans and credit cards, all you have to do is increase the size of your mortgage and use the money that you’ve raise to pay off your more expensive borrowings. This is not advisable as you will be placing the security of your home at risk.

Ever since the bad credit mortgages fiasco that blew in from America the back end of last year, the world’s economy has been in turmoil. Bad credit mortgages or sub prime mortgages as there more commonly known in the states have been headline news.

Recent fears over increasing household bills have put the focus on the amount people are paying for their mortgages. A survey compiled for the BBC, found a 35% rise in mortgage queries in January and February compared with a year ago. Household bills rising also contributed to 215,000 new debt problems taken to the service in January and February. But the figures also showed that credit card debt problems were down by 9%.bad-credit-mortgage-improve-credit-rating.asp                

The Citizens Advice bureaux said that more than a 3rd of it’s enquires are realated to bad credit mortgages problems. Mortgage arrears are the most common problem people will be facing in 2008.  

If you have a bad credit mortgage seek advice from your broker to see if you can remortgage and reduce your monthly payments.  

Anyone facing problems with paying their bad credit mortgage should seek advice immediatley from there lender .

Many people still want a 100% mortgage. Many people still think you can borrow over the value of your property; these mortgages were available up to 125 % of the value of your property. 100% mortgages are still available, but the market is extremly limited.

 The two deals that are available have a strict lending criteria. You have to be over 21, your income must be more than 25k you can only lend on repayment basis and it’s only for people who are buying. They will only lend you up to 100% of the mortgage. 100% mortgages have very strict credit rating criteria. Squeaky clean is the phrase that comes to mind. The other 100% mortgage lender is similar to a guarantor mortgage, except the property is the security for the 100% mortgages lender. The lender requires security of 25% of your parent’s mortgage.

What you need to know about 100% mortgages:

Apart from charging higher interest rates for 100% mortgages the other risk for the lender is possibility of negative equity. As no equity is placed within the property value, because there is no deposit, if house prices instantly decrease after the property is bought then no equity exists as a buffer. This means that if you need to sell your home the 100% mortgage taken out on the original value of the property would outweigh the property new value.

You first need to know what your credit rating is. Armed with this information you stand a better chance of ensuring you get the best bad credit mortgage. It’s a mine field out there, knowledge is power. 1 in 4 people have a bad credit mortgage.

Understanding the basics have you got had any of the following bad-credit-mortgage-check-credit-files.asp

CCJ county court judgment

Defaults or late payments

Mortgage arrears

There are also other reasons for needing a bad credit mortgage loan. These are all generally called adverse credit history though the specifics may change depending on where in the UK you have lived. Arrears on rent payments, arrears or defaults on loans, decrees (in Scotland), County Court Judgements (CCJs), bankruptcy and individual voluntary arrangements (IVAs) are all reasons why someone might need a bad credit home mortgage loan. bad-credit-mortgage-deals.asp

If so you will probably have to have a bad credit mortgage. You shouldn’t worry what you now need is to do get the best bad credit mortgage available to suit your circumstances. Once you have your bad credit mortgage sorted you then need to live within your needs and build your credit rating back up to a level where you will be able to remortgage away subject to penalties and fianancial benefits. Once you are back on track you will then be eligible to get a mortgage from the high street lenders. This is where the best mortgages are.