The purchase of a home is perhaps the biggest financial responsibility you will incur in your young adult life. There are many big signals that it could be time for your family to make the big jump, including but not limited to, a new addition to the family, an upgrade in income, or just the human desire to upgrade from an apartment. However, this step does not happen overnight. In fact, it can take weeks and months of planning. The key is to get everything right the first time, because if you don’t, you could be staring at a mountain of debt with unsatisfactory results. Here are a few things you should know before entering the housing market for the first time.
The Amount of House You Can Afford
You may be able to determine on your own how much of a monthly house payment you can afford by taking a look at your monthly income, expenses, debt, and savings. If you are still unsure of how much house you can afford, you should talk to a financial expert. This expert should not be a banker you might consider for a mortgage because they have a financial interest to issue loans that are as large as possible.
Generally speaking, you should not spend more than 30 percent of your gross income on monthly house payments. You will also need to save money for a downpayment.
Many homeowners mistakenly believe that the amount they pay each month will only include the cost of the loan. They are often shocked to see that the total they must pay includes things like homeowner’s insurance and property taxes. Depending on the size of your down payment, you may also be required to pay private mortgage insurance. You will also face the possibility of paying closing costs of up to three percent or more. This money will be used to pay attorney fees and other costs associated with the transferral of homeownership. All of these things should be considered when you are financially planning for this dramatic step.
Find a Realtor You Can Trust
Some potential homebuyers are reluctant to seek the services of a realtor for fear the fees paid to the realtor will drive up the potential price paid for their new home. This fear is unfounded since it is the seller who is responsible for the commission earned by a realtor. A savvy realtor will also pay dividends by helping to guide you through every part of the home buying process. The value of a realtor can go underappreciated, but their knowledge and resources of the area are an intangible that you simply cannot afford to miss.
Think Beyond The Present
The financial commitment involved with buying a house makes it necessary to consider the long-term plans you have for your life long before pulling the trigger on a purchase. Issues like your current and future marital status, plan for kids, and career goals are all extremely important. Mortgage and market terms may make it necessary for you to pay on your mortgage for a few years before you begin to build substantial equity. You would not want to commit to a home you will not live in for very long if this is the case.
Look Past Aesthetics
It is not uncommon for you to have a favorite room in a home before you make a purchase. It is also no stretch of the imagination to think you will spend much time thinking of how you will upgrade the space. However, make sure you think of more than just the cosmetic work that must be completed in a home. For example, it is one thing to consider the cost of the perfect cabinets or countertops for a new kitchen. But it is something entirely different to foot the bill for the supplies and labor to complete these upgrades. The cost to upgrade a home does not have to be a reason not to make a purchase. However, you should purchase a home with a full understanding of how much money you will need for repairs and upgrades.
Understand the Closing Process
A meeting will take place between your lender, attorney, and realtor when it is time to close on your new home. A lot of paperwork will need to be completed and you will be walked through the process to ensure you understand all that is happening. You will need to sign and initial all the paperwork you are given. Once you are done, you will be given your copies of all the paperwork along with the keys to your home.
The first-time purchase of a home can be both a nervous and exciting time in your life. It is important to remain as calm and focused as possible throughout the process in order to ensure you make the best decisions possible. The six tips above should help you understand a few things you should know before buying your first home.
THE TRIALS AND TRIBULATIONS OF TRADERS TRADING FROM HOME
Steve Haworth, CEO of TeleWare Group
Banks had hoped to keep their London trading floors open amid the worsening coronavirus pandemic, insisting traders were “key workers”. But trading floors were quickly cleared and employees sent to work from home in isolation.
Firms needed to quickly adapt to remote working. This meant recreating the carefully monitored environment of the trading floor at thousands of sites.
With major disruption across the entire sector, it seems the Financial Conduct Authority felt no other choice but to relax regulations on recording calls. But does this measure introduce more problems than it solves?
Why call recordings are regulated
Whilst regulations differ globally, authorities in the UK, US and Hong Kong have long required trading floor phone calls to be recorded for certain activities.
In the UK, the FCA demands financial institutions keep records of all trades and transactions related to certain types of business for at least six months. Recording calls and reporting trades are essential to the regulators’ ability to monitor the markets for abuse, such as insider trading. Requirements to record calls apply to companies that receive and execute client orders to buy or sell in the financial markets.
Each trading floor in a financial firm also has its own set of policies which staff must abide by. For instance, the trading floor manager must ensure that all trade-based calls are recorded and monitored. An often-used policy that still exists is to ban all mobile phones on the trading floor. To enforce this, mobile phones are often stored in lockers and traders are required to use turrets to host calls.
Beyond call recording, most traders and salespeople need to sit together on a monitored trading floor in order to meet regulatory rules. A range of compliance complexities under GDPR, MiFID II and Dodd Frank have meant working from home has simply not been an option for many traders.
The rush to relax regulations
Traders are now required to work from home – if they can. The FCA has said it accepts that some scenarios may emerge where recording calls may not be possible. Adding that it expects companies to “consider what steps they could take to mitigate outstanding risks if they are unable to comply with their obligations to record voice recordings.” If financial services companies are unable to record calls they are then expected to “come up with a plan to fix the problem”.
Yet, trading firms have enough problems to solve without having to decipher call recording requirements. Why should traders spend extra time updating the FCA and coming up with an alternative solution when one already exists?
A smart alternative
Smart solutions – such as mobile call recording which meet global regulations – have perhaps been overlooked as a way to maintain business continuity.
Mobile voice recording technology (MVR) is not new. It has existed since 2011 and includes secure and reliable voice and SMS recording, easy to use conferencing and robust, accessible voicemail. It has matured over the years and proven itself to be flexible and highly reliable.
Technology can keep traders trading from wherever they are. Ensuring they can operate effectively at home while remaining compliant.
STOP THE CONFUSION: HOW TO KNOW IF YOUR BUSINESS MAY BE INSURED AGAINST COVID-19
By Alex Balcombe, Partner at Harris Balcombe
The last few weeks has seen businesses in hospitality, tourism, retail, leisure and more forced to close their doors following the Government’s orders that they should close to prevent the spread of coronavirus.
While this is expected to flatten the curve and reduce the number of coronavirus cases, it will of course have an impact on businesses and employees alike. For small businesses especially, there are many concerns about how they can claim on their insurance to weigh the fall of this impact.
In response to calls to help struggling businesses, the Government has informed the public that companies who are facing turmoil will be able to claim on their business interruption insurance during this difficult time. For most, this is wrong.
The insurance industry has also been extremely vocal that there is no cover for any coronavirus-hit businesses during this tough financial period. This isn’t strictly true either.
How can businesses see through the mixed messaging and best secure their future and their livelihoods and reduce money worries? It’s an extremely stressful time for many companies, and confusion over whether or not they can be covered can only cause more unnecessary stress.
Since it’s a new disease, most businesses will not be covered for business interruption due to COVID-19. In fact, the vast majority of policies do not cover anything related to COVID-19.
That said – don’t rule out the idea that you may be covered. There is a chance that you will be covered against COVID-19, but not know it. This is a very small chance, but your current cover may already protect your business against the consequences of coronavirus, and the nationwide response to it – though those with this cover are unlikely to realise it.
How Could I Be Covered?
Not everyone has business interruption insurance, as it’s not a legal requirement. It is entirely up to the policy holder to weigh up the benefits of having it, and their ability to trade should a disaster happen.
To be considered for cover for COVID-19, there are two types of policy extensions to your business interruption cover that can potentially cover you for this situation:
Infectious Disease Extension
Many policies expressly state which diseases fall within the realm of being an infectious or notifiable disease. If this is the case, your policy will not provide cover. As it is a new disease, these policies will not have included COVID-19.
Other infectious disease extension policies will define the disease with reference to the actions of the government. Since the UK Government has named COVID-19 as a notifiable disease throughout the UK, it is possible that your business may fall into this definition, thus meaning you may be able to make a claim.
However, again, it’s not always that simple. Many policies require the disease to have been on your premises, while others specify a radius from your premises in order to qualify.
Denial of Access Extension (non-damage)
Denial of Access Extension (non-damage) policies may cover you if you’re prevented from accessing your property. This could be due to an event, or by the actions of a competent authority, which could cause your business interruption cover to engage.
If covered by this clause, there are often very subtle differences in wording in your policy. This could depend on the insurer or policy. You may well be covered, but it will depend on your particular circumstances, and the specific policy wording.
It’s clear that the Government needs to do more in ensuring there is clear messaging for businesses, and to help the insurance market look after policy holders. This is an unprecedented situation, and with many people looking to claim on their insurance, we’re already seeing major delays which could have a domino impact.
People throughout the world are understandably facing all kinds of worries because of the current pandemic. Our ways of living have changed, and many business owners will not have experienced a situation like this in their life times. If you own a business and are unsure about whether you can claim for business interruption, or are confused about ambiguous wording, get in touch with a loss assessor.
These claims are not simple, but loss assessors will be experts in business interruption insurance, and will specialise in large and complex claims. They will be able to help and guide you along the way, check your wording and work on your behalf to make sure you get everything you are entitled to.
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