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How to Buy a Big Home on a Good Budget
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457 Retirement Plans
Are you familiar with Section 457 retirement plans? Heard about the concept before? If yes, you've probably have encountered it the time you were planning which of the retirement plans available is best to consider. Well, just like the rest of the retirement plans, the Section 457 covers a lot of things that are worth knowing.
On the most basic, the Section 457 retirement plans are a ty... Read personal finance article
Money Saving Tips
If you came here with a PhD in Maglev, you might not get anything out of this article. However, if you a like most of the newcomers subsisting on a low paying job, you may find some gems herein.
These tips are from my experience here and are not intended to be an absolute cure-all for your problems. Please consider what I have to say.
FOOD AND SCHOOL SUPPLIES
Check... Read personal finance article
How to Buy a Big Home on a Good Budget
The dream of owning a luxury home, yacht, race horse or some other luxury item can become a reality with Shared (fractional) ownership.
So What Is It?
Shared or fractional ownership, not to be confused with timeshare, is where a number of people contribute funds to buy a leisure asset (e.g. house or yacht) and share the use of it. Crucially you also own a proportion of the asset, which is where it differs from timeshare. If the value of the asset increases then (in theory) the value of your share increases too. Contrast this with timeshare, where you only "own" the right to use the asset for the specified period of time each year.
Example
A group of people who are interested in buying a property in Mallorca, total cost £250,000, decide to buy it together. They each buy a 10th share for £25,000 which entitles them to 5 weeks use each year. The allocation of weeks is handled by season, with each group member choosing 1 week from high season, 2 weeks from mid-season, and 2 weeks from low season. The order in which they choose their weeks is initially chosen by lottery, and rotates thereafter. After a fixed period of 5 years the property is sold and the value returned to the share owners. Each share owner will pay a 10th of the maintenance fees. The time allocation and maintenance will be handled by a management company. Lower share sizes are possible, e.g. 50th shares which in the above example would give 1 week each year. Share sizes lower than 50th would entitle the share owner to entry into a lottery to determine whether they were entitled to a week in a year. Both of these options give a low-cost way to enjoy ownership, with the possibility of increasing your share size over time.
Benefits
Lower purchase cost is the major advantage. Alternatively if you have a lot of money to spend you could purchase something of much higher value than you would otherwise be able to! As maintenance will typically be taken care of via a management contract you will be free to simply enjoy the property, rather than worrying about looking after it. Of course you will only pay a proportion of the maintenance fees which makes sense, since most owners only actually use their property for 4-10 weeks of the year!
Possible Problems
Conflict with other group members over issues such as change-over times, damage, and time allocation are probably the most likely problems. These can be overcome by the use of a proper contract and management company. Also look out for high management charges, and the options available for selling your share.
More research can be undertaken at the following shared ownership web sites
http://www.Reachtogether.co.uk is a community dedicated to the promotion of shared ownership (of almost anything!). You can browse the current shared ownership schemes and/or suggest your own. Particular features of the schemes currently listed are the provision of specified end dates for the groups (usually 3-5 years), the low share values (from £100), and the option for the schemes to be self-managed (cutting out management fees).
More examples
http://www.bestpentic.com A two-bed, two-bathroom apartment at Sugar Hill, near Mullins Beach, in Barbados. A 10-week fraction costs £95,000, with a management fee of £3,751 pa; the estimated rental return is £4,405.
http://www.Pezula.com Twenty-one days a year in one of 10 4,300sq ft beachfront houses at Pezula Private Island & Residence Club in the Seychelles costs £145,000 plus £3,000 pa service charge. Four weeks a year, in two rotating two-week slots, in a five-bed house at Zimbali near Durban, South Africa, costs from £27,000 to £33,000 (depending on sea view), plus £500 pa service charges.
http://www.millionaire-property.com/ View millionaire properties for sale from around the world.
Copyright 2006 Nicholas Marr
Nicholas Marr is CEO of Marr International a UK based property marketing company that is responsible for one of Europe's fastest growing overseas property websites at http://www.homesgofast.com .
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Managing Finacial Information
Finance Matters ( What you need to know )
Do you need to know more information on these subject then read on, for more information on related articles visit our home page
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What are charge cards
A charge card is similar to a credit card except it must be paid off monthly rather than having option to carry balances forward.
Administration Order
Administration - this is a court procedure that gives a company some breathing space from any action by creditors. A court can grant an administration order to enable the company to survive, in whole or in part, as an ongoing business; organise a voluntary arrangement or compromise with its creditors or get a better realisation of assets than would be possible if the company went into liquidation.
Liquidation
There are three forms of liquidation
Compulsory Liquidation
This occurs when a company is wound up by an order of the court
Creditors Voluntary Liquidation
This is an arrangement where the directors ask the creditors to approve the winding up of the company because they have decided that the company cannot continue to trade and cannot pay its debts in full.
Members Voluntary Liquidation
This form of liquidation is used where the company is able to pay it's debts in full, but the members wish to realise their investment.
Dissolving a private limited company:
This is a simple task, requiring completion of a form 652A, available from Companies House. The form is returned to Companies House together with a small processing fee and the Company is then dissolved three months later. Please note that only Companies with no debts can be dissolved.
What are mortgage arrears
Mortgage arrears arise when you fail to pay your mortgage on time. It is important if this has happened, or is likely to happen, that you contact your mortgage provider as soon as possible.
Redundancy:
If you are made redundant by your employer then you still have legal rights as an employee in the UK. You have the right to alternative employment if there are any other jobs in the Company and you are suitable for this work, the right to trial periods for new jobs and the right to time off to look for another job.If you believe you have been unfairly dismissed you may be able to make a tribunal claim against the company.
All about bailiffs
A bailiff works on behalf of the court to collect monies due to creditors. Bailiffs work to a strict set of rules, but are empowered by the Court to remove goods from premises they visit. These goods will then be sold to pay the Bailiff's fees and the debts concerned.
What are guarantors
A guarantor is a person who promises to repay a loan if the original borrower fails to do so. You should be very careful when considering being a guarantor for someone.
Joint & Several Liability
If you have taken out a credit agreement jointly with another person or have joint bank accounts, then both of you are liable for the full amount of the debt that has been accumulated. If the loan is not repaid, even though you have paid your share, the loan company can still come to you for the other person's share.
Pawn Brokers
A Pawn Broker will lend you money against your goods, such as jewellery. You can redeem your goods by paying off the original debt plus interest. If you fail to repay the loan the Pawn Broker may sell your goods.
When to seek advice:
We would suggest you seek advice if you feel uncomfortable about the level of your debts or are receiving letters from your creditors. You should seek help as soon as possible as creditors prefer to know what is happening.
County Court Judgements (CCJ')
A County Court Judgement (CCJ) is a judgement for debt. If a judgement is settled within 30 days of the date of the judgement it will not appear on the credit register. If this is not the case then you will have a CCJ on your credit record which can make it difficult to obtain large amounts of credit.
Company Voluntary Arrangements
If a Company gets into financial trouble it may be able to avoid winding up by entering into an arrangement with its creditors. This arrangement is similar to an Individual Voluntary Arrangement
Illness:
If you become seriously ill you may not be able to make payments to anyone you owe money to. Always contact the lenders as soon as possible and explain the situation to them. You may be able to stop payments for a period, or they may reduce the charges for interest. It is vital that you contact them at an early stage so they can explain the options open to you.
Loan Companies:
When looking for a loan you should always check on the lender. You should ensure the lender is licensed by the Office of Fair Trading and that they are a reputable firm.
Ask yourself these questions:
Have you shopped around to get the best deal for you?
Will this borrowing still seem like a good decision in a year or two?
Do you understand the terms and conditions of the deal?
If you don't have money to spare now, how will you find the money to make the repayments?
Have you looked at how much money you have coming in and how much you are spending? Use our financial calculator to work out your finances.
Have you thought hard about the effects of the extra financial commitment?
Could you manage if you lost your job or had your overtime cut?
What if you have a pay cut or can't work?
What if prices or interest rates go up?
Property Repossession
If you fail to make repayments on your mortgage or do not contact your mortgage provider, they may apply for an order to repossess and sell your home. We may be able to help in discussions you have with the mortgage provider, or there may be other options we can consider.
Statutory Demand
A statutory demand is a written demand for payment of a sum due, served by a creditor on a company or individual. In order that the company or individual has every opportunity to respond, information must be given in the statutory demand as to its purpose, usually winding-up in the case of a company, or bankruptcy in the case of an individual and the name, address and telephone number of a person with whom contact can be made.
Debt Factoring
This involves selling your invoices to a third party company. In return they will process the invoices and allow you to draw funds against money owed to your business. This is commonly used to improve cash flow but can also sometimes reduce overheads.
Informal Arrangement
If you know that you cannot pay all your debts, you could consider writing to your individual creditors to see if you can reach some compromise. Include a timetable of when you will repay them. The disadvantage with an informal arrangement is that it is not legally binding so your creditors could ignore it later and ask you to pay in full. Your local Citizens Advice Bureau can advise and help you make this kind of arrangement
Lost or Stolen Credit Cards
If you believe you have lost your credit card or have had it stolen then you should telephone your card provider immediately.
Receivership
When a company borrows money, the lender is usually given some security over the company in order to guarantee payment. If the company fails to keep to the terms or if they get into financial difficulties the lender may be entitled to appoint an administrative receiver. An administrative receiver is an insolvency practitioner who has control of the whole, or a substantial part, of the company's property and wide powers over the business. The administrative receiver is mainly concerned with getting back the money owed to the secured creditor. The administrative receiver may sell the assets piecemeal, or sell the whole business as a going concern to pay off the secured creditor, and the costs of receivership.
Student Debt:
This can be a problem for graduates and those still studying. The Student Loans most students have are not repayable until you are earning over £15,000.00 per year, and your employer will then deduct the repayments from your wages. It is very tempting to use credit cards for daily purchases, but remember that these debts will need to be repaid. If you make only the minimum payment each month, the length of time it will take to pay of the whole balance will significantly increase.
Neil Parnham - Webmaster
CRG Insolvency
http://www.crginsolvency.co.uk
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