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It sounds rather morbid, but it is vital that all self certified borrowers assess their finances and prepare them in the case of their death.

It's a common misconception that you should only think of death when you are old but what would happen to your finances if you suddenly died or was taken seriously ill? Who would benefit and who would lose out? These are questions that must be answered while you are fit and healthy.

You have to make sure now that those who you want to benefit – your family – do benefit and those who you would rather see left out of pocket – the taxman – are steered clear of your estate. But luckily there are simple processes to assure this which can be organised with the help of a self cert mortgage adviser.

The first thing to do is to make sure you are covered. That means taking out the right life insurance, critical illness cover and income protection. It is an extra outgoing each month, but it is one that will help you solve the question of how your loved ones will be able to carry on paying the mortgage should something happen to you.

The next step is to get your estate in order. This is not just an exercise for the wealthy – everyone should have a will. You can decide now who gets your home, your business and your assets. You can even lock them in trusts now so the taxman cannot get hold of them later.

No one wants to think about their mortality, but if you own a home and self certify your own finances then you have to have a plan in place to make sure your loved ones are protected and that your assets are safe, whatever happens to you.

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You might have spent the last year comfortable on your self cert standard variable rate and the latest Bank of England decision to hold the base rate at 0.5% for the 12th month in a row will only make the decision to stay with your SVR easier – but should you be considering moving off the lender's default rate?

One year ago this month the Bank of England ended six months of dramatic rate cuts to try and stave off the effects of the recession, leaving base rate at a record low of 0.5%. Since then many people who had self cert mortgage rates have just stayed on their lender's low rate SVR, which follows the low base rate.

But is it time to consider changing? It doesn't seem like it at first glance, and the experts are predicting that base rate will stay low for some time to come.

Hannah-Mercedes Skenfield, mortgage expert at moneysupermarket.com says: "Undoubtedly the biggest winners from the fall in interest rates have been those consumers who have been sat on SVRs. Traditionally lenders' SVRs have usually been higher than the deal that was ending so consumers would have to remortgage as a result. Now we have a situation where many consumers are sitting on extremely low rates and have no incentive to move."

But Moneysupermarket.com says it has started to see SVRs starting to increase again, and rates for remortgaging starting to fall so for some consumers, now is the time to consider looking for an alternative deal. Rates can only go up and it might be wise to catch them before they rocket.

If you are unsure what to do, talk to a professional mortgage adviser. They will be able to assess your finances and search the market to see if there is a better alternative remortgage options for you. Remember – it's not all about the short-term, a good mortgage adviser will remind you that paying slightly more now may save you a fortune in the future.

SOURCE: Moneysupermarket.com, BoE, 04/03/10

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You might be sure that you can afford to pay for a mortgage each month, and you may be currently handling a smaller loan comfortably – but how much could you really afford?

For some that is a stupid question. They have a monthly income, they have savings and they have debts. This can all be measured and a rough estimate of what they could afford to pay on a mortgage each month could be deduced.

But for others it is not such a straightforward question. Some people earn large amounts for some parts of the year, very little for others. Some people can earn more money if they choose to do more hours, some people are reliant on the markets, on the mood of customers or even on the weather. Some people only earn their money at Christmas, some people earn huge bonuses at unpredictable times of the year and some people have to hope that their new product sells to earn money.

For these people it is difficult or even impossible to say how much they could afford to pay each month. So how do they get hold of a mortgage? A lender is unlikely to give someone a six-figure loan if they cannot honestly say that they will have enough money to pay for it each month.

For those people, professional mortgage advice is key. A professional self certification mortgage adviser is able to assess finances, incomes, outgoings and look at the whole UK mortgage market to come to a decision about what mortgage suits that person best. They are also able to discuss that loan with the lender and come to an agreement for a mortgage.

So if you can't answer the question, talk to a professional mortgage adviser as they will be able to answer that question for you.

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You might have a self cert mortgage right now but have you checked whether you could be a prime borrower? After years of paying your dues with a more expensive loan you may be able to get hold of a cheaper, prime mortgage.

You were probably told to opt for a self cert mortgage because you are self employed, or you work more than one job, or you work on commission or your job may even be bonus-driven. All these incomes are not regular and cannot be necessarily proven by a PAYE each month, so you needed to prove your own income.

But these loans, in the eyes of mortgage lenders, are much riskier and as a result cost more money. So for years now you may have been paying a lot more each month for a mortgage than a person who earns a regular income and is a less risky borrower in the eyes of a mortgage lender.

But now, after years of self cert borrowing you may find you are not self cert anymore. Many prime lenders will accept a borrower if they have three years of accounts to prove how much they have been earning – so if you can show that for three or more years you have been earning enough to pay a self cert mortgage, you just might be accepted for a less risky loan with a lower rate.

The only way to be sure is to get some professional mortgage advice. A mortgage broker will be able to look at your accounts, assess your credit score and do a full fact-find into every aspect of your professional life. Then, using their knowhow of the mortgage market and UK mortgage lenders, they might be able to find you a better, cheaper mortgage.

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Most people define a mortgage on the rate of interest it offers – but with most mortgages, particularly complex ones like self cert mortgages, the headline rate is just one aspect of the entire deal.

Analysis from moneysupermarket.com has found that the arrangement fee charged on a mortgage can be a crucial factor in determining the overall cost of the deal. For example, it found one tracker at 1.99% which would cost an extra £2,600 over two years compared to one at 2.49% with a flat fee of £995. It also found another two year fixed rate deal at 3.44% working out £1,176 cheaper than the 1.99% deal as it carries a £595 fee.

Essentially, the fee can be as important as the rate. A good rule of thumb is the cheaper the rate, the higher the fee – it's a matter of finding the best mix of both for your situation.

Hannah-Mercedes Skenfield, mortgages channel manager at moneysupermarket.com, says: “Although we have started to see a welcome improvement in the mortgage market, with the number of products increasing, and rates starting to fall, we are still seeing some products being promoted for marketing impact, rather than real borrower benefit. Using high fees enables lenders to showcase extremely low rates without losing any of the profit.

“The size of the arrangement fee plays an important part in the overall cost of a mortgage. A more expensive fee may well be worth paying in order to secure a low rate on a large mortgage, but only if that fee is a fixed amount. Mortgage products with percentage fees rarely stand up to those with flat fees, even if their rates are considerably lower.”

So talk to a mortgage professional when it comes to choosing a loan because they can help you find the middle ground between a self cert mortgage with a cheap rate and a low fee.

SOURCE: Moneysupermarket.com, 11/02/10

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According to free classifieds website, Vivastreet.co.uk, more people than ever are turning to working from home, either to boost their salaries with a second job or replace lost income or keep on top of their debts.

The website says the number of people searching for work they could carry out in their own homes increased by 142% compared to 2008. This trend is expected to continue this year, as people look for alternative ways to bring in some additional income to help keep on top of their finances.

In fact, this year almost 200,000 people have already visited the 'work from home' section of the website, and 62% more people searched for ‘work from home’ jobs in January 2010 than did in December 2009.

Many of these jobs being searched for and being taken up are self employed roles like translators or consultants, and while it's great to see Brits being resourceful they need to be aware of their change in status.

If someone becomes self employed and then should they requite credit or a home loan they become a self cert borrower. This means proving their income themselves, and in this environment that unfortunately means it is a lot harder to get a home loan.

If you are newly self employed talk to a self cert mortgage adviser right away. The sooner you can begin amassing proof of your income the better the chance you have of getting a mortgage as a self employed person, and to do that you need to get some advice from an expert.

SOURCE: Vivastreet.co.uk, 19/02/10

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If you are struggling to pay for your self employed mortgage each month and are worried that next month might just be a bridge too far then you have to be proactive and take care of your mortgage before it gets the better of you and your business.

This message seems to be spreading, because according to Experian, UK business insolvencies hits lowest rate in January since June 2007. Businesses across the UK saw an 8% improvement in their financial strength and the rate of insolvencies fell to 0.07% in January 2010, with just seven in every 10,000 businesses going under. This compares to an insolvency rate of 0.09 per cent in January 2009 and 0.11% in December 2009.

The highest insolvency rates during January 2010 were among businesses with 11 to 100 employees, and one to two employee firms had the lowest rate of insolvencies.

Rolf Hickmann, managing director of pH, an Experian company, says: “It’s encouraging to discover that not since the current financial crunch started have so few firms become insolvent in a single month. Whilst it is too early to predict whether we are fully out of the woods, this does hint at an improvement in the health of UK businesses, something which is reinforced by the financial strength view provided by January’s data.”

The people who have the most financial strong small firms are those who are in charge of their finances. That includes their mortgage, which they have budgeted for, are actively working to reduce or are at least comfortably managing the interest repayments.

If your business is suffering and your mortgage is too then it is time for a financial MOT. Talk to a self employed mortgage expert about taking out a new loan, budgeting to manage the loan you already have or exploring alternative forms of credit.

SOURCE: Experian, 19/02/10

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New data released by the Office for National Statistics showed unemployment rose in January to wipe out the falls seen in November and December – a timely reminder that you must protect your self cert mortgage against any chance of redundancy.

The ONS says claimant count unemployment increased by 23,500 in January compared with December, the largest monthly increase since July – a sign that although the technical recession is over, 2010 will still feel like a tough year for UK households.

No one can be sure that they will not be made unemployed and no one should assume that 'it won't happen to them'. Even if you are not made unemployed, the tough economic slump will mean less work, fewer opportunity for earnings, fewer bonuses and more chances for lean months and even missed payments. Those in that dole queue will tell you how hard it is to manage a mortgage without an income.

Charles Davis, senior economist of the Centre for Economic and Business Research says: "Although the technical recession is over, UK households face a difficult 2010. With firms having accepted significant productivity losses in the recession, increases in output to meet higher demand can in large part be met by increasing productivity of existing workforces – for many households it won’t feel as though the recession is over yet."

So you need to protect yourself against the hard times. That means talking to a mortgage adviser about taking out the right insurance products for you and your self cert loan. It is an extra payment each month, but it's one that could save your mortgage and your home should this country's grim job problems get the better of you.

SOURCE: ONS, CEBR, 18/02/10

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Twenty per cent of business owners in the UK are resorting to using credit cards to fund their business through this economic slump.

New Institute of Directors' data shows that nearly 60% of businesses seeking bank finance in 2009 were rejected by their bank, and that 20% are financing their businesses to some extent with credit cards. Also, more than a third of businesses are now having to rely on overdrafts.

A quarter of directors said that they had tried to access finance from the institutions that they banked with in 2009 and of this quarter, 57% said that their application for finance had been rejected by their bank – one in five directors of businesses didn't even bother trying to get credit for fear of rejection or the inevitability of an unaffordable rate.

IoD data from 2001 showed that 45% of directors were financing their businesses through bank loans and 40% through overdrafts. Today, only 28% are doing so via bank loans, 36% through overdrafts.

Miles Templeman, director general of the IoD says: “The fact that over half of all businesses seeking finance last year were turned away by their banks is totally incompatible with the banking sector’s position on the state of lending in the UK."

This is a stark illustration of how tough things are for business borrowers in the UK. They are unable to get hold of credit or the bank is simply unwilling to help during these tough times.

A financial adviser might be the best way to get hold of business credit. They can help you talk to the banks, help you sort your finances and help you choose the most realistic, affordable credit that will work with your business and your life.

SOURCE: IoD, 16/02/10

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Celebrity culture has invaded every part of our lives and its no different when it comes to small business experts – but if you want to get ahead you shouldn't listen to the so-called experts on TV.

Thankfully most small business people in the UK are not listening to the likes of Sir Alan Sugar or the dragons of Dragons' Den. According to Nottingham University Business School there is some frustration from people running small businesses that media portrayals don’t match their experiences and the challenges they face.

Only 11% of small business people thought the glossy small business experts on TV understood their experiences. Also, only 20% were able to say that media reporting reflects their experiences highly or reasonably highly, while 35% said that it does not reflect their experience at all, or not much. 

In fact, over 70% of respondents said that they thought it would be highly worthwhile or reasonably worthwhile for some small business advisers to work directly with media to improve the quality and coverage of smaller businesses.



Professor Martin Binks, director of the University of Nottingham Institute for Enterprise and Innovation says: “These views raise important questions as to where people can find accurate information on which to base decisions about being an entrepreneur."


It's good to see that small business owners don't take much notice of the reality celebrities. The twits on TV will not be able to help them run their business day-to-day, they have no understanding of what you need to do if you are struggling to get by as a small business person in the real world.

A small business adviser actually understands the financial problems small business people face. They do not do their business in a studio and they do not need lights and cameras to sound like they know what they are talking about. Small business advisers are real people living in the same world as all the struggling small business borrowers out there. They will be able to talk to you on your level and will give you real advice for the real world.

SOURCE: Nottingham Business School, 11/02/10

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