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Q.
Why do you not offer financial services, mortgages, insurance etc.
A.
Lets first look at the mortgage industry.
The club does not organize mortgages or recommend any one broker or company. There are a number of specialist mortgage lenders and brokers that have special products aimed at self builders.
Due to the way the financial services industry is run in the UK, the only real independent advice is from those who are not involved. What is often referred to as an independent advisor, is usually only allowed to sell product that he has been trained on and gets commission on, so will often be only a small sub set of the total available, and given that commissions are paid based on what you buy, its perhaps not in your best interest. Some by the way will charge you for advice and still take the commissions.
This is why a few years back so many people were persuaded to have endowments mortgages, and the commission paid on these is larger than the cost of membership of this club, so for an hours advice the independent advisor could make more than it costs us to provide you with all the help and services we provide. It may also account for why so many people selling pensions seem to think there is no future in property but really risky share schemes are a good bet for your pension funds.
We don't see a point where we become involved in the provision of loans or mortgages, where perhaps we do see our involvement growing is in the proactive side, increasing the interest in loaning to self builders, and in encouraging more people to come up with new and exciting schemes and means of allowing you to become involved in self build that is beyond the amount that you can currently get on a mortgage.
Within the last year or so, a number of the larger UK companies have obtained large loans at 1% from sources outside the UK, and funds are available at various places far cheaper than they are in the UK. Although there is a currency risk and offsetting this with options is beyond the average self builder, we are intending on producing a work book to explain this and in some cases we can see some groups of self builders may like to get together and research these areas further. There is scope here for companies and venture capitalists to become involved in new services and new means of funding, and it may be that as a joint venture with the Property Pension Club and others we can set up a small club, to get people together who share these interests, with a view to creating new funding sources for self builders, that would not have the same lending limits and be available at far lower rates. Given the very low or very near zero risk involved, given that the low cost source of funding can be obtained, this can be very attractive to those who could run such a specialist provision, especially if they could do so without expensive shop fronts, offices, and other overheads. No project has yet been announced, but as some might say - watch this space.
Turning to insurance.
Insurance companies are often run on the basis if taking your money and then should you have a claim either trying to find a reason to pay you less than they should or nothing at all, or just point blank refusing to pay up. There are some areas where you have to have insurance, and cannot avoid it, in some other cases it may make you sleep better through a false sense of security. Given what we have said here and the opposing way the clubs run, with absolute trust and honor, you will see any involvement by us in insurance is incompatible.
In our view we do you more service by being completely independent, and although the rules in Britain does not allow you to give independent financial advice unless you are a part of the system and therefore not independent at all, there is nothing to stop us having general articles and information pointing out the sort of questions you should be asking, and problems or experiences of other members.
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Self Build Homes Club is an international club
and trading title of Self
Build Homes Club llc. Local services
to serve members are commissioned for the club by New
Atlantis International Services Corporation.
All major commissioned companies involved, have New Atlantis trust status.