Mortgage Protection - A Safety Net

Private insurance is seen as a safety net if problems arise due to the risk of unemployment, debts, repossession and the possibility of illness.If someone has a 100,000 pound mortgage, an increase of ten to twelve pounds a month would provide cover for the insured for the interest per month paid on the mortgage, should they run into problems.

With personal debt now totaling over a trillion pounds, the Government is pushing these new initiatives on private insurance.Bankruptcy is increasing and home owners are coming under pressure if they miss repayments on their mortgages.The possibility of repossession is worrying and frightening.

It's ironic when you realize that the taxpayer has coughed up some 8 billion pounds in benefits over the last 10 years in mortgage interest payments to support the unemployed.The treasury is now trying to off-load this onto to the responsibility of public and mortgage lenders.

Insisting that compulsory Mortgage Payment Protection Insurance (MPPI) should be enforced would not be a popular move as it increases costs when buying a house, and some experts are of the opinion that the Government should impose that expense onto the lenders, to come from their profits.It is no secret that building societies and banks make massive profits on selling MPPI and premiums are currently around 800 million to 1 billion yearly despite only just under a quarter of buyers having made the purchase.With the profit on this being 250 to 500 million pounds, you can follow the Governments way of thinking.

What the Government realizes is that 75 per cent of homeowners are left without protection if they fall on hard times.It's true that the benefits system is in place and gives support via Income Support for Mortgage Interest, but there are limitations on claimants.

The advice from the Council of Mortgage Lenders (CML), the voice for banks and building societies, is for first-time buyers to take out insurance to protect their homes.However, they are strongly against making MPPI a compulsory product, especially if it increases the buyer's outgoings.

The CML believe that if the industry has to absorb this cost then the outcome will be that mortgages will go up as this money will have to come from somewhere.Even if it is not seen as a separate premium, it will be built in and will increase the overall cost.In their opinion margins have been squeezed for some time now and it is making it impossible for firms to absorb this extra too.

The CML think that people should be free to make their own choices and arrangements with regard to this insurance, which may not be appropriate for everyone.It could be that people may have sufficient protection from other insurance, or through their employers or possibly substantial savings.In this case it would be unreasonable to enforce someone over insure.

Iain MacQueen-Sims, credit and debt expert of Omnichek, does not agree with the CML His opinion is that by making MPPI compulsory it would create a safety net and that it shouldn't add to homeowners costs.The lenders can easily fund it without any price increases and they should show some loyalty to a market where they do very well out of their customers.

A draft of the European Directive on the mortgage market is in favour of compulsory MPPI in all member states as a standard procedure.A spokesman for the Department of Work and Pensions has stated that "anyone taking out a mortgage should think hard about protecting their income."

About the Author

Interested in getting a quote on Mortgage insurance?

Please Visit Understand-Mortgages for more information and other resources.Our sister site Brokers Online offers cutting edge articles and information about Mortgage Insurance and other financial products.

Relaited Links:

• The Best Source for Wholesale Video Games Lead Generation: Explained!
• Open Market Homebuy; A Life Line or a Straight Jacket
• Life Insurance Needn't Break The Bank

Top 5 Reasons Why You Can Attract Angel Investor Capital In A Recession

Today companies raise investor capital from private funding sources such as private investors, accredited investors, venture capital funds, and alternative funding sources.With all the news about the capital markets tanking, why is this still a good time to raise capital?

As the global economy evolves, interest rates shift, and competition for the best deal escalates, investors seek out opportunities in emerging industries, and niches.Investors seek ways to multiply their money.Every big "trend" where great wealth was created happened by the market makers and the early adopters of that "new" market opportunity.

So how can innovative companies attract Private Equity investments from investors in this recessive market place?The Top 5 reasons are:
1.
Sophisticated investors that haven't yet participated in angel investing have realized that ALL investment classes are risky.They think: "With the collapse of the stock market and the real estate market, might as well invest in something I know is risky but I have potential to get 4-8X more ROI!" Both new and experienced early stage investors are getting involved with Angel Investing as a way to rebuild their damaged portfolio.

2.Angel Investors already know the early stage company's value is at the bottom and should only go up.And if the company gets into trouble, they can more effectively impact the company's operations and resulting increased value than they can with a public company.The investors can help with their experience and rolodex to grow the company.

3.Market Makers are going to be looking for new places to put money and companies that can do a Direct Public Offering through the OTC BB market, with the new controls recently implemented, will be the next favored market place because it is easier to directly reach investors to create the demand for that stock.Furthermore, it provides access to follow on institutional investment capital and offers an easier exit for private investors.

4.With the advent of strong investor groups forming and investor portals designed specifically for investors to be able to identify, investigate and invest in early stage companies the way eTrade provides that access to public companies, individual investors can have a community to collaborate with on early stage companies.OurFundingPlanet is an example of how entrepreneurs and investors can connect in an online community.

5.There are 4 Sectors that investors will be looking at because companies in these areas will be part of the driving force in our economic recovery.Businesses that:

a.

Offer feel good products and entertainment, because when people are worried, they want simple pleasures that make them feel good.

b.Provide an improved efficiency to a company's operations because businesses are looking for a way looking to increase profits

c.

Deliver bio-med and life sciences innovations to the market or

d.

Provide a solution for the energy market - either as alternative energy or direct profits from carbon-fuels consumption

Besides private equity investment being available for qualified early stage companies, there are many alternative lenders flush with cash to help early stage companies finance their contracts and cash flow.

However, although we are bullish on the availability of capital, the criteria to measure the worthiness of a business to receive capital are slightly stricter.The money available is smart money.Competition for the available capital is stronger than ever.If the company isn't properly prepared or if the CEO is seeking the wrong type of capital, their efforts will be futile.Independent reviews of an entrepreneur's business plan and capitalization strategy can save CEOs time and money as they enter these capital markets, as well as, give valuable insight into what motivates investors.

Over the past six years she has developed Launch Funding Network, a rapidly growing and successful consulting practice serving entrepreneurs by connecting them with capital and resources.Further she acquired the long established Network of Business Angels & Investors, and turned it into the most active angel group in the Southeast.Through her publishing house, KYRMedia, she shares her knowledge through education of a new generation of savvy Angel Investors and wise entrepreneurs.

About the Author

"Where Qualified Investors and Capital Connect with Innovative Companies".

Network of Business Angels & Investors (http://nbai.net), and NBAI Private Equity Investor Forums."How to Pitch to Investors" free webinars at http://findinvestorcapital.com and more info at www.launchfn.com

Relaited Links:

• Commercial Cleaning Service: How to Hire a Good One?
• Earn Money Online Work From Home
• Designing Profitable Trade Show Displays -- Don't Make One Of These Mistakes