So, to help homebuyers form a clearer idea of what’s what, this brief rundown of what to expect from each option should prove useful. Firstly, mortgage customers will want to get to grips with the basics of deposits and repayments.

The deposit is the amount a homebuyer needs to put down before they are given a mortgage. Usually about 20 to 25 per cent of the purchase price of a new home, buyers who will struggle to come up with such an amount could seek other options such as the 95 per cent mortgage, where the buyer’s deposit will only need to equal five per cent of the purchase price.

Although a tempting choice for some, mortgage customers should bear in mind that it is always better to put down the largest deposit they can afford, as they will then be eligible to a much more favourable interest rate.

Now on to the mortgage types…

The standard variable rate (SVR) is the most basic type of mortgage, and a set rate of interest will be charged by the mortgage lender. Expect this rate to be around two per cent above the Bank of England’s base rate. However, as the name suggests, the rate can be changed by the lender and the repayments will change accordingly.

Similar to the SVR, the tracker mortgage is tied in to a rate, but it is to the Bank of England’s base rate, not the to the mortgage lender’s SVR. Only fluctuations in the base rate will change the amount you pay.

For those who wish to know exactly what they will be paying each month, a fixed-rate mortgage could be the right move. Payments will stay the same for a fixed period – usually for two, three or five years depending on the type of fixed-rate mortgage chosen. Those who go for the fixed-rate option will avoid paying more if interest rates rise.

When extra help is needed to get on the property ladder, there are several options to investigate.“Rent to buy” schemes provide tenants with cheaper rent in a house while they save up a deposit to buy that property. Shared equity reduces the amount of deposit required on some new-build homes, so could be a helpful option to consider. 

The post Navigating Your Way Through the World of Mortgages appeared first on Smart Wealth.

Sponsored by Secure Trust Bank

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Have you ever heard of a contract for difference? Or more plainly put, a CFD?  This is merely a contract or agreement between a buyer and seller to exchange the difference between the opening price and closing price of a contract. CFDs are an alternative to conventional trading and offer the added advantage of leveraged and the ability to hedge your portfolio as well as profit from rising as well as falling market prices.

The opening price of a CFD could be higher or lower than the closing price, and you can benefit from either position depending on whether you have opened a long or short CFD trade.  Unlike conventional trading, CFD trading enables you to speculate on rising or falling markets, meaning that you can profit even when markets are on the decline. While CFDs are a very popular tool in the UK, Asia, and throughout Europe, they are actually not allowed in the United States of America due to government regulation.

If invested correctly, CFDs can become quite a profitable venture.  Though do note that CFDs are traded on margin, and as such, if the margin drops below a minimum threshold your trade could be closed out at any time.  No doubt there is a lot to learn about CFDs.  This is why you need a site that is perfect for beginners to CFD trading, one that is user-friendly, and offers tight spreads.  City Index is a great place for information about investing in contracts of differences. With 24-hour prices on over 12,000 markets, they are sure to have no shortage of options available for you.

The post Understanding a Contract for Difference appeared first on Smart Wealth.

Two years have gone by since we bought our house, and I’m happy to announce that we finally have window treatments on every window in our house.  We have a 4 bedroom colonial, maybe 20 windows and two sliding glass doors with glass panes on each side.  In addition, my wife loves curtains, so even though we have blinds on every window she also wanted to get curtains.

Window treatments are pricey no matter where you get them from, but like everything else in life it is good to price them out and try to get the best deal.  Online websites are good, as long as you are really good at measuring your windows and understanding the layout enough to make sure you are ordering the right type of blind for each room.  For example for the sliding door area we had to get vertical blinds, and decide on which side the cord would be on as well as how far past the end of the window we want the rod to go etc.

Horizontal blinds are pretty easy to pick out and to put up.  You can get those from just about anywhere and in different colors and material type (wood, plastic, etc.)  We also purchased the type of blinds that have a button where you can pull them down and pull them back up after you push the button.  We really have liked these types and we have them in two of the four bedrooms as well as in our dining room. You can get them in two different types, ones that let the light pass through and ones that block all the light from entering.  There are also plenty of color options so you can match the color of the room you intend on installing them in.

The beauty of these blinds (and they are sold everywhere, we bought one kind from bed bath and beyond and others from Lowes) is that you can customize them very easily.  The Levoler brand sold at Lowes can actually be cut to size at Lowes very easily (as long as you actually find someone that can help you there).

The curtains are a different story.  We find it difficult to shop online for curtains because some of the colors and patterns look different online than it does in person (as we have found out on several occasions and then had to return the curtains).  We have done most of our shopping for curtains at the nearby JC Penney.  Their prices are somewhat reasonable compared to other curtains and since it is local, picking up or making returns are pretty easy.

We have probably spent $1500 on window treatment and accessories for our entire house.

Overall our top choices for curtains are JC Penney.  Our top choices for blinds are Lowes, Bed Bath and Beyond and Blinds2Go.

The post Where do you buy your window treatments? appeared first on Smart Wealth.

So our designer called and we met him up to go over his plan, and the one question on our minds was how much will this renovation cost?  I probably should have mentioned that this design store is located in downtown Plymouth in Michigan.  We love downtown Plymouth, it is full of shops that my wife loves to go into as well as bars and restaurants.  It is very trendy, and rent is probably not very cheap for a design store so we should have probably guessed what was coming next.

The design that he presented was very nice no doubt.  Our double sink vanity would have a granite countertop and two tall cabinets on each end for storage.  They would make a wood frame to insert the soaking bathtub into and tile all around it.  The shower was very large and had a nice glass door and all the faucets and accessories were very modern and we loved the design.  Overall the design wasn’t anything crazy or something that we couldn’t have come up with on our own.  The bathtub was a soaking tub only and we had even thought of maybe adding a jetted tub.  The shower is a higher end shower with body jets, and it is a much bigger shower.  The tile we had picked ourselves was not very expensive at all.

So when he looked at us at the end after we had asked all the questions we wanted to ask and said that the overall design based on the quotes he had received from his electrician, plumber and tile guy was going to be about 25k, my heart nearly stopped.  This guy was very nice and my wife and I were set on going with him without getting any other quotes before we heard him give us that number.  We wanted a nice bath and we plan on staying in this house for the rest of our lives hopefully but 25k is much more than we are willing to spend on this project.

We talked to him some more and explained that we wanted to make a couple of changes to bring the cost down.  He is planning on meeting up with us sometime this week to go over final price.  We plan on negotiating with him, but overall I am very turned off.  He knew our budget when we walked into the door and he never made it seem like it would be something outrageous like this.  Finally something that bugged me was the fact that he never actually gave us a breakdown of the cost of the project and only gave us one number.  I asked him for a breakdown this time so I can see where this money is going.  I am not asking the guy to work for free, but at the end of the day he is just “managing” the project and hiring the guys to do the work.

We have decided to get a couple of other quotes and do some comparison.  Probably a naïve statement for me to make but I recommend not going to a design store in an expensive location.

To be continued….

The post Our “little” bathroom renovation part 2. appeared first on Smart Wealth.

Buying a foreign property can be a great investment, but there are also a number of things buyers need to watch out for if they want to see the best possible return. One of the most important variables that can impact the overall cost of overseas transactions – particularly those involving hundreds of thousands of pounds – is the current exchange rate. If you are buying in the Eurozone, use a euro exchange rate converter to keep track of the current rate and decide whether now is a good time to buy. 

Even if market conditions aren’t favourable, by agreeing a forward contract with your currency exchange provider, you can effectively lock in to the exchange rate you want even if you do not have all the required funds yet. This helps enormously with budgeting, as you can plan ahead without worrying about the vagaries of currency fluctuations, guaranteeing a beneficial rate several months in advance of the transaction. 

Currency exchange specialists should always be used instead of banks for large transfers of money. Banks typically charge a fee for the transfer, but the real cost comes in the inferior exchange rates they offer – usually six or seven per cent higher than the money market rate. In a £200,000 property transaction, for instance, the difference between using a bank and using a foreign exchange specialist can add up to £10,000. 

A foreign property transaction should also always be handled by an independent lawyer – which means they represent you alone and are not affiliated with the developer or the estate agent. Even if their fees are higher, build this into your budget as part of the cost of buying the property: it ultimately reduces the risk you are taking. Find a lawyer with expertise in the property laws of the country you are buying in, and don’t sign anything they haven’t approved. 

If you are buying abroad with a mortgage, it’s usually best to borrow in the same currency as the source of funds you will be covering the repayments in. For example, if you’ll be repaying the mortgage with your UK-drawn salary, it makes sense to get your mortgage in sterling. If you’re planning to pay the mortgage by letting out the property to others, take a mortgage in the local currency instead. Again, this mitigates the impact of currency fluctuations on your investment.

The post Ways to Save Money When Buying Property Abroad appeared first on Smart Wealth.

Two years later and thousands of dollars later that have been spent on numerous renovations from a sprinkler system to remodeling a half bath to installing hardwood flooring, it is time to tackle the most expensive project we have left, our master bath.  Our home was built in 1989 and the bathroom has never been updated.  Our master bath is great in size, if I had to guess somewhere in the 200 square feet range with a bathtub and a shower.  It is very outdated with carpeting throughout the entire bathroom, low quality material on the cabinets, shower and tub.

We have dreamt of running into the guy from DIY channel’s Bath Crashers.  If you have not seen this show it really is great.  The host goes into a local Lowes or Home Depot and talks to as many people as he can asking them questions about their bath and the lucky couple get picked to have their bathroom renovation done free of charge, as long as they supply some man power.  But since that day has yet to come and with the talks of possibly trying to have a baby soon we have decided it is better now to do what we have wanted to do and stop the waiting game.

We have been frugal and saved up plenty for this renovation thinking we would tackle it ourselves, but since we have spent the last two years renovating the house and doing most of the projects ourselves we have been worn out.  We bit the bullet and decided to consult a local designer on this project and see what the cost would be.  We really liked this designer, he was honest and straightforward with us and when he asked us for a budget my wife and I looked at each other and smiled.  What is a reasonable budget for what we want? We want a nice bath, with some features that we knew might be somewhat pricey and granite countertops.

I responded with a question rather than an answer…15k??? Our designer smiled back and said that is something he can work with and he is happy we are not like most people that expect a renovation of that size to cost 5k.  I had made a nice drawing of the dimensions of our bathroom and let him have it so he can make a plan and price it out.

This is only part one of our story, because so far this is all that has happened.  We will be meeting with the designer on Monday to discuss the design he has come up with and I will update on my next post.

Have you had a designer design a project for you? Were they reasonably priced? And did you go through with it?

The post Our “little” bathroom renovation part 1 appeared first on Smart Wealth.

In the past I have tried to buy tickets for opening day, and once I was lucky and purchased standing room tickets as they went on sale.  Other years however I was not so lucky, and ticket prices quickly sky rocketed and became ridiculous, and no matter how much I loved baseball and enjoyed the opening day festivities I could not fathom spending that kind of money on an event that lasts 3 hours.

I’m not quite sure if sites like stubhub are good for sports fans or bad, I guess probably a little bit of both. You can always buy and sell tickets on ebay, craigslist or other sites but stubhub is dedicated only to tickets for entertainment and sporting events.  I have used stubhub in the past to purchase tickets to a game that is sold out, and for me it was great because even though the price of the tickets were twice what I could have paid if I would have purchased from the team’s site, I was able to compare ticket prices for similar seats and different sections within the ball park and it gave me a variety of options.

My coworker purchases a 28 game package for the Detroit Tigers every year, and he splits those tickets with another person, and he always keeps opening day tickets as part of the deal he has made with his friend.  Every year he goes online and tries to sell his tickets and every year he is successful and is able to bring at least a 200% profit through the sale.  This year I decided to pay close attention and he decided instead of using stubhub that he would put the tickets up on ebay.  It requires more work on ebay because you might have to answer questions and emails and maybe even “work out a deal” where on stubhub the buyer would pay the price and print out the tickets and the seller would receive the selling price minus any fees that stubhub would charge.

The bid price on his tickets quickly soared, with one day left to go before opening day he had sold his two tickets that he purchased for $75 for the pair.  The selling amount….$375, which he basically has used the profit from selling the opening day tickets to purchase 6 other games that he can attend throughout the year (about $50 for 2 tickets per game).

How many people have sold tickets using stubhub or ebay? There are certain sporting events during the year that are very popular and you can easily turn a profit if you can get your hands on tickets.

The post Spring is here, and so is baseball appeared first on Smart Wealth.

So I started my hunt for a better insurance rate than what I was given, keeping in mind that I may also have to switch our auto insurance to get another discount.  I spent an hour on the phone with an insurance agent that specializes in finding you the best rate, only to come back with an outrageously higher rate than what I already had.  He then begins to get an attitude with me because it was a waste of his time since I would not want to switch insurance companies.

After that debacle, I decided to try a couple of insurance companies near my home so I made the call and stayed on the phone with each for at least a half hour.  Same result, much higher rate and left me wondering if I had been getting an amazing deal all along and if my insurance company finally realized this and wanted to straighten things out a bit.

It was very interesting to me that every agent asked me different questions.  Some cared more about if we have dogs in the house and never asked me about the nearest fire hydrant.  While others were so hung up on what the exterior of my house is made out of, which in my case is brick, vinyl and stucco and never asked me anything about any major updates that may have been done on the house to raise its value.  Another interesting thing that raised my eyebrows was the dwelling coverage that the insurance companies were estimating.  Between my current insurance provider and all of the ones I contacted there were as far as $100,000 off one another when it came to dwelling coverage.  Dwelling coverage of course is the cost it would take to rebuild my house completely from the ground up.

Now I’m not a genius, but if the city sends me a letter saying that my SEV went down this year again (4^th year in a row) how can the cost of rebuilding my apparently depreciating house go up?  I asked every agent this question, and not one was able to give me any feedback other than “sorry sir, we cannot change that amount.”

I hate to admit this but I finally gave up.  After receiving a letter from my wife’s employer stating that they have partnered up with some insurance providers that may be able to give us a good discount and spending 45 minutes on the phone yet again only to find out that the best they can do is $200 for the year higher than the already increased price, can you blame me for giving up? I hate the insurance game, I hate feeling like I’m getting ripped off, like someone out there is getting a better deal than I am and that with every policy term renewal I am dreading the paperwork stating that my rate went up again.

This has been my therapy for the day.  Please share any frustrating insurance company stories you have.

The post My struggle for cheap homeowner’s insurance appeared first on Smart Wealth.

Now many can say the same thing for banks, that if a big bank failed there would be horrible consequences, and that may be true but imagine if the auto industry was to shrink, or if one or two of the big three would cease to exist.

1)      Company employees including Engineers, accountants, marketing gurus, lawyers, technicians, line workers, plant personnel, business professionals and building maintenance would all lose their jobs, be forced to change profession or move to a different state.

2)      Tier 1 supplier and their employees: Often times the Tier 1 supplier works for more than one OEM and may be able to survive one company’s fall, but would still have to cut jobs to remain profitable.

3)      Tier 2, 3 etc.  Same as Tier 2 suppliers but a smaller company, and may supply more than material for the auto industry.  These companies can supply steel to several industries and may be able to survive with some layoffs.

4)      Banks/Credit unions:  Who do you think finances the vehicles that are sold? Credit unions and banks make a lot of money on auto loans and lease programs.  When the financial crisis was in full swing many companies stopped lease programs and increased credit restrictions making it more difficult for the below average credit consumer to apply for an auto loan.

5)      Dealerships:  The number of dealerships in the state and in the country that closed down was alarming.  GM stopped producing Pontiac, Saturn and Saab;Ford stopped producing Mercury and sold it’s Jaguar, Land Rover and Volvo brands.  All dealers that specialized in these makes were not able to begin selling other brands so they were forced to close down.

6)      Restaurants/Shopping centers:  When plants close down and buildings close down there is less clientele for shopping centers and restaurants in the area.  Many of these restaurants opened up specifically near the plant and are not able to survive without those customers.

Not to mention marketing through advertisements, sponsorships, etc.  I can go on and on but I won’t.  The auto industry is more than just a bunch of Midwesterners making cars; it really is the heart of this country.

I am biased of course, after all I’m a mechanical engineer working in the auto industry, but tell me one industry that means more for this country and this economy than the auto industry does.  The turnaround for the auto industry started with Ford and GM and Chrysler has soon followed but it really goes beyond that.  Toyota, Nissan and Honda have recovered from the Tsunami and earthquakes that hit Japan last year and the floods in Thailand.  To anyone who questions why I mention those Japanese companies contributing to the economic recovery in the US I say that I bet you didn’t know that the Nissan Altima is built in Tennessee and that the Ford Fusion is built in Mexico.

Last month the auto industry sold 15.1 Million vehicles in the US.  The highest number of vehicles sold since March of 2008 before the financial crisis hit.  Quality has never been higher (according to the latest JD Powers & Associates release) and dealer satisfaction has never been higher than now (also JD Powers).

If you agreed with helping out the banks, but not the auto industry I would love your thoughts on why you thought so and if you still think that the government should not have stepped in.

The post The Auto Industry’s recovery appeared first on Smart Wealth.