Top Tips For Mortgages, From Gallimore Adams.

In the first of our features from our business partners, Laraine Adams, of independent mortage brokers, Galimore Adams Ltd, gives us a few top tips to help us make sense of our mortgages in this infamous 'credit crunch';

As everyone knows, today’s financial market is a tricky one. Not only has the number of mortgages available decreased dramatically, but the criteria for securing a mortgage has changed too. Here is a step by step guide to finding a new mortgage, and how to avoid the pitfalls.

1) Arm yourself with information

It may sound obvious but find out what rate your local bank is offering and note the competitor rates that are being advertised on the television and radio.

2) Consider how much of the work you want to do

If you are financially savvy, ensure you read the small print; in particular the rate, penalties, and the fees.

If you are not so confident, find a mortgage broker. Ask your friends and family if they can recommend someone. Perhaps do a Google search for mortgage advisers in your area and find out what ‘word of mouth’ has to say about them.

3) Narrowing down the options

Ensure the adviser you chose is ‘whole of market’. This means the adviser can look at all products available to them on the market, rather than just a specific panel of lenders.

Find out if the adviser charges fees. Charging a fee does not mean the advice you receive will be any better.

Ensure you choose an adviser you feel comfortable with. You need to trust them and feel confident they are going to find the best deal for you.

4) Adverse credit?

If you should have any adverse credit, do not just consider those brokers advertising that they specialise in poor credit histories. A whole of market adviser will have access to the same deals. And ensure you are upfront and honest with the adviser about your credit history.

5) Keep ALL of your options open

Some banks and building societies are offering rates that are only available if you go to them directly rather than through an adviser. A good adviser will tell you if you will benefit from going directly to a lender.

6) Protecting your mortgage

Don’t automatically take out payment protection in conjunction with your mortgage. This can be very expensive. Your adviser should discuss the protection you should consider and again the adviser can research the best deal for you.

As some lenders will only deal with you directly, do some research of your own as well. If you find a great PP deal that beats anything your adviser suggests, then ask your adviser to compare the cover. Again, a good adviser will be open and honest with you even if it means you take protection cover out elsewhere.

To find out more, contact Laraine or Laura, on 01952 463852, or why not check them out at http://www.gallimoreadams.co.uk/

Spreading The VAT Burden

As the credit crunch continues to bite, an increasing number of companies are finding that the ‘once a quarter’ cash flow burden of paying their VAT bill all in one go is placing mounting pressure on the purse strings.


As with many other regular bills, wouldn’t it be great if we could spread the payments over a number of months, to help us to budget more effectively.


As accountants, we are dealing with more and more ‘time to pay’ arrangements on behalf of our clients.

HM Revenue & Customs have no plans to formally relax the rules by giving companies extensions on paying their quarterly VAT bill. They have, however, confirmed that businesses do, subject to certain criteria, have the option to spread the payments.

So, what are the criteria?

As soon as you realise you need to make a payment arrangement, you should contact your local office immediately. Alternatively, you can contact the Payment Helpline, on 01274 539 628, during office hours.

Making a Proposal

If you agree to pay the amount in full, within 28 days, no further action is required.

If you require longer, you will need to provide details of;

• Your savings and other assets, for payment arrangements of up to 3 months, and;
• Your income, spending, savings and other assets, for payment arrangements longer than 3 months.

Your Rights

HMRC will consider any payment arrangements you request. If you feel they’ve rejected it without considering it properly, you can make a complaint, but you can’t appeal against their decision.

Things to Remember

• HMRC will only entertain payment arrangement proposals if all returns (whether VAT or tax) are up to date.
• You will have to pay interest on any tax or VAT paid late. The current rate is 8.5% PA

So, although HMRC don’t really like it, and you may have to pay interest, and provide additional information, this could be an invaluable means of budgeting your VAT payments, thereby keeping the wolf from the door.

Free advice on arrears and dealing with HMRC is available through the charities; Citizens Advice Bureau, and TaxAid, by following these links.

Citizens Advice Bureau

http://www.adviceguide.org.uk/index/life/tax/help_with_tax_problems.htm

TaxAid

http://www.taxaid.org.uk/help.cfm?secnav=20

If in doubt, always seek the advice of these agencies, or your own accountant.

Home Business Mortgages

Often, when we work from home, our house will have a dual purpose, as both a business premises, and a personal residence, so how does this affect our mortgage?

The simple answer is that, in most cases, it won’t.

Although we may need to notify our insurers, simply working from home is not something that mortgage companies generally need to be aware of.

The implications for buying a house will depend on its current usage at the time of purchase, as well as the level of business undertaken there.

If, for example, we buy a house with extensive outbuildings, as long as they are not currently used for business, then we will simply need a standard domestic mortgage. What we do to the buildings after that, is not relevant, until we come to sell or re finance the property. If, however, they have already been converted, say to offices, or a small retail unit, we would normally need a specialist mortgage, with dual residential / commercial usage.

This does not apply if the vendor simply ran a business from home. It is only relevant if there have been structural modifications, making the premises partly commercial.

Whilst looking at mortgages, I should just mention that it is common practice for small business owners to extend their mortgage, in order to finance a business venture. This could be for converting / fitting out our new office premises, or it could be for anything from web site design / production to recruiting new staff etc. As long as we can prove that some of the mortgage relates to our business, we can claim 100% of the mortgage interest relating to that proportion of the loan. This is something that often gets missed when completing our tax returns.