Finance « Malta Property

It has always been the case among millionaires; you’d see their two-digit roomed mansions in the news or the Internet. You hear about property and business acquisitions by a certain Western millionaire. Real estate, for good or for bad, had always reaped positive results. They may take some time to pay, but why are millionaires and nest-egg masters always going for the high road?

An Alternative (Sturdy) Investment

“Real estate is generally accepted as an alternative investment [by high-net-worth investors],” says Simon Jochlin, portfolio analytics associate at StennerZohny Investment Partners, part of Richardson GMP in Vancouver.

“It has the characteristics of an inflation hedge: yield, leverage and cap gains. It does well in upwardly trending markets, it pays you to wait during market corrections and typically it lags equities in market declines – it buys you time to assess the market.”

Is A More Logical Choice

“For example, if you own a rental condo, and the one across the hall goes on sale for 30 per cent less than you think it’s worth, you wouldn’t automatically put yours on the market and sell, too, because you think there is a problem. Indeed, you may actually buy the other condo,” said Senior Vice President and Portfolio Manager at Raymond James Ltd. Darren Coleman.

“And yet when a stock drops on the market, instead of thinking of buying more, most people automatically become fearful and think they should sell.”

Gives More Leverage

Coleman added that “Banks love to lend against it. Over time, this lets you own a property with a much smaller investment than if you had to buy all of it at once.”

Unknown to many, banks mean to acquire as much property as they can. But to consider a millionaire a financial “pushover” of sorts when it comes to acquiring assets (because they can pay), would be blasphemy. But if indeed a millionaire slips up on a property, the bank is more than willing enough to buy, improve and re-sell the property at a higher rate relevant to its immediate environment.

According to the Financial Ombudsman, banks, including Lloyds, Barclays and RBS, had been using a regulatory provision called “alternative redress” or “comparative redress” to reduce the amount they repay consumers claiming back PPI refunds. UK media also had their take on the development and claimed that these banks have used the provision since last year, with some even from 2012.

Alternative redress works by allowing banks to assume a consumer with a missing or uncertain PPI policy to be refunded with a regular-premium insurance repayment. However, consumers with single-premium insurance, which are more expensive, were given alternative redress. Former financial expert-now-journalist Cliff D’Arcy said that it was a “scandal out of a scandal” pertaining to mis sold PPI.

PPI is a policy designed to repay loans, mortgages and credit cards in case you get sick, an accident or become unemployed. However, because of its many exceptions, many consumers were unable to make use of the insurance policy. The average regular-premium PPI payout is £2870. Single-premiums cost more.

Observers said that this new scandal may reverse the FCA’s tallied 15% overall reduction of PPI complaints to banks in the second half of 2013.

Consumers are encouraged to look for their PPI complaint information, find if they were given alternative redress and demand a full refund from their banks. Consumers may also contact the Financial Ombudsman in case the banks do not fulfil their responsibilities.

The payment protection insurance fraud committed by virtually every UK bank in existence is not only the biggest financial fraud in history. It directly affects the bloodline of the UK economy. With over £25 billion in estimated compensation for the entire United Kingdom, the economy could actually improve if the entire package is finally addressed to the country.

Over £15 billion had been paid out to about 380,000 customers mis sold the nefarious insurance policy. However, the Financial Ombudsman Service states that the numbers are still growing with them receiving at least 2000 PPI claims daily. The FOS estimates that banks need to redress at least 4 million more PPI claims, which means that the end of the PPI fiasco is still far in sight.

However, in 1997, the windfall gains of customers because of the de-mutualisation of building societies might happen similarly once all mis sold PPI is paid back. The de-mutualisation allowed Halifax to become a PLC in 1997 and allowed some 7.5 million customers to receive at least £1500 worth of shares. This strongly improved the economy with more car registrations and improved customer confidence.

Experts are seeing a decrease in car registrations in today’s economy, but from 2011, car registrations increased by 9.3% in 2012. However, the same might not happen as most people may use their PPI reclaim funds to repay their loans, mortgages and credit cards, which might slowly increase the economy, but not as well as 1997’s economic achievement.

For UK expats currently residing in Malta, reclaiming PPI is simple. Click here or visit http://www.ppiclaimbackco.co.uk and complete the quick and easy PPI claim form to get started.

Analysts and experts said that refunding PPI repayments to customers can cost banks more than £25 billion in total just for this year. Currently, £14 billion is the total of the PPI compensation package for the United Kingdom, which is already staggering. However, experts say that the financial industry underestimated their mis selling activities for the past decade.

PPI is an insurance product designed to repay loans, mortgages and credit cards should a customer get sick or become unemployed. Because of its many exceptions and the abusive selling practices of some UK banks, PPI became widely mis sold to many people who did not need the insurance or were ineligible for its terms of use. A PPI claim can be made through the use of a PPI template letter or seeking the aid of legal experts such as claims management companies.

Experts said that the amount of £25 billion is probably not the final amount of the PPI compensation package; some small detail will lead to the increase of this staggering total. However, they said that it is truly one of the biggest recompense amounts for a financial scandal, putting PPI mis selling as bigger than the pension scandal years ago.

Lloyds recently set aside £1 billion more for PPI recompense, bringing its total compensation to £6.3 billion, the largest of all four major UK banks. The Financial Services Authority recently penalized the bank for an “inadequate” PPI repayment system that cost around 240,000 customers to wait for more than 28 days to six months in getting their compensation.

Credit unions are the first stop of any customer who finds their credit scores inadequate to get banks to finance them. However, credit unions only have limited funding, which is why they can only choose select customers they can finance. If you want to get an affordable financing from a credit union, take note of the following.

1. Credit Scores

You might have a low credit score, but most credit unions will not consider your credit score. Instead, they base it on your financial capability, employment stability and current financial capability. You will be asked for an interview with one representative.

2. Common Ground

As credit unions have smaller vaults than banks, they select customers who share a “common ground” with them in terms of profession, race, nationality, ethnicity or industry. Try to find your own common ground first before heading to apply for a mortgage or any financing with a credit union.

3. Limits

Credit unions can only provide you a certain amount when it comes to home, car or any type of financing. It might not promise that it can pay for your item in full, but it can certainly promise you lower interest rates and flexible repayment options. You even have the option to pay for your refinancing with a small top-up amount with your regular repayments.

Payment protection insurance is a general term for an insurance that repays loans, mortgages and credit cards when the customer suffers injuries or is unable to work. Being a general term, it can also be named differently, but still function similar to a PPI policy. Here are the different kinds of PPI that exist, and may continue to be sold in the United Kingdom, today.

1. Credit Life Insurance
Credit life insurance is what usually comes with credit cards and loans that provide financing repayment in case of customers having health and unemployment problems. This type of insurance is a variant of PPI, and it costs more than the average single premium PPI policy.

2. Credit Disability Insurance
Credit disability insurance, also mis sold alongside credit cards and loans, covers your repayments in the event you become unemployed. It does not cover your repayments when you get sick or you face an accident. This is a single premium PPI policy and can commonly be mis sold by insurance brokers and banks.

3. Credit Accident Insurance
This is sold alongside loans, credit cards and mortgages and is also a single premium PPI that pays only for your financing if you get into an accident. The insurance policy does not cover being unable to pay due to unemployment .

The current UK payment protection insurance bill has now reached a staggering amount of £12.94 billion according to recent figures. According to financial experts, the numbers are still rising as more claimants with larger interests and longer time owning the insurance come forward to make a claim.

The financial industry is currently swamped with mis sold PPI claims and large PPI bills. Currently, Barclays has £3.7 billion pledged for mis sold PPI, HSBC has pledged an additional £223 million, bringing their total bill to £1.3 billion. Lloyds, the biggest mis seller of PPI, has reached £5.3 billion, the largest amount of all compensating parties.

PPI is an insurance product designed to repay a loan, mortgage or credit card in case the customer gets sick or unemployed. Many customers were mis sold the insurance under mis-interpretation and unnecessary inclusion.

Customers such as “Roberta” who gained £65,000 for a mis sold PPI continue to alarm analysts and the financial industry. Thousands of customers with potentially a decade of compound interests can instantly bring the PPI compensation bill to £16 billion by 2013.

However, the slowing down of the PPI claims process is entirely blamed by authorities on the banks themselves. The Financial Ombudsman Service Chief Natalie Ceeney states that 7 out of 10 claims rejected by banks were all valid, meaning that the investigative arm of the financial industry are not paying full attention to the claims or are not giving proper processing to the cases themselves.

Do not fear the economic crisis’ effects on the property industry; it is still fairly easy to get approved a mortgage application and get re-financing with the current economy. However, you will need to get your financial profile in shape. Most lenders consider your credit score, your financial capability and your personal touch in your application to give you a lower interest rate and instant approval. Here are the basic steps to getting your mortgage approved.

1. Credit Scores

Your credit score is the heart of your mortgage application. Don’t consider applying for mortgage if you have a low credit score. A score of about 630-680 should be enough for your lender to consider giving you a lower-interest mortgage proposal. Double-check if the credit bureau had given you the correct update on your credit scores as well.

2. Your Requirements

Most lenders require that you have your payslips, tax forms, employment details and other information including your existing financing. Prepare these forms in both hard and soft copies and have multiple copies prepared. A delay in your application may mean the progress of your savings and you losing the application in itself. As soon as you apply, supply copies of these documents.

3. Have More Choices

You can haggle with your lender regarding the mortgage rates they offer you and the best way to haggle is to have information from their competitors. Mortgage deals may be advertised, but the adjustments made by other brokers to you own particular benefit may lower the rates proposed to you by an initial offer.

4. Re-Financing

It is possible to re-finance your closing costs with the same lender as long as you show you are capable of maintaining your credit score. The approval of the application is the first half of the battle; the other part is maintaining your score that would grant you lower rates on your re-financing with the same lender.

Malta Property

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Category Archives: Finance

Three Reasons BIllionaires Always Focus on Real Estate

An Alternative (Sturdy) Investment

Is A More Logical Choice

Gives More Leverage

Banks Could Swindle Your PPI Refunds Through “Alternative Redress”

How the PPI Compensation Payments Directly Affect the UK’s Economy

PPI Compensation Can Reach A Total of £25 Billion

Having Mortgage and Other Financing From Credit Unions

PPI Claims: The Different Kinds of Payment Protection Insurance

PPI Claims: Bank Bills Still Rising

Getting Mortgaged: The Easiest Methods to Get Approved