7 surprising perks of VA loans

The VA loan has spectacularly good terms nothing else comes close, says Joe Parsons, senior loan officer at PFS Funding, a Dublin, California, mortgage broker.

Yet only a small minority less than 12% of the 16.4 million service members and veterans with a mortgage take advantage of VA loans, according to the National Mortgage News.

Is it time for you to consider a VA loan? Here are the key advantages, or perks, they provide.

1. Expert advice on price and repairs

The VA makes sure buyers dont overpay for a home and that its move-in ready, without any costly, unexpected problems.

It does that by requiring all properties to be evaluated by a specially trained VA-certified appraiser who will:

  • Determine the homes fair market value.
  • Make sure it meets the VAs Minimum Property Requirements, a list of health, safety and structural requirements that is unique to VA loans.

Bare wires in the kitchen? An addition that was built without the proper permits? These must be fixed or brought up to local building codes before the sale can be completed.

The appraisal process typically takes 10 days or less and can provide buyers with peace of mind.

In 2013, Sandy Magura and her husband, a medically retired army veteran, purchased a home in Stafford, Virginia. Regarding the VAs experts, she says, Not only were they extremely thorough, but they were also adamant about the seller getting the things done before we closed.

2. Lower interest rates, fewer fees

Lets count the ways youll save by financing with a VA loan.

  • No down payment on purchases up to $417,000 in most areas.
  • No mortgage insurance even with no down payment.
  • Strict restrictions on the type and amount of closing costs.
  • Competitive interest rates, even if you have relatively poor credit and high debt.

How competitive? In most cases, youll pay the same interest rate as borrowers with a 760 credit score and a 20% down payment. Some lenders Navy Federal Credit Union and USAA, for example offer lower interest rates to VA borrowers than they do to prime, conventional fixed-rate borrowers.

The only financial drawback to a VA loan is whats called the funding fee, which can range from 1.5% to 3.3% of the amount youre borrowing.

The fee can be added to the loan so you wont have to pay for it up front. If you have a service-connected disability, the funding fee is waived.

3. Its assumable!

Back in the day, virtually all home loans were assumable. Someone who bought your house could accept responsibility for your mortgage and start making payments.

There was no need to go through the expense and uncertainty of another loan.

Today, virtually no mortgages are assumable, except for VA loans, which can be passed on to new owners in one of two ways.

If the person buying your home has served in the military and can qualify for a VA loan, he or she can assume your mortgage. Youre free to take out another VA loan.

If the person buying your home does not qualify for a VA loan, you can still allow it be assumed. You wont qualify for another VA loan until the new owner pays it off.

This is a tool that can be used to be creative in selling a home, says Yael Ishakis, vice president and loan officer at First Meridian Mortgage in Brooklyn, New York.

4. This isnt a one-time deal

A veteran can use VA eligibility more than one time and, in some cases, can have two VA loans on two homes simultaneously, explains Louise Thaxton, military specialist and branch manager at Fairway Independent Mortgage in Leesville, Louisiana.

Lets say you take out a VA loan and pay it off. You can take out another VA loan to buy another home. Theres is no limit on the number of sequential mortgages you can have.

Or you might be living in a VA-financed home and need to relocate for work or family reasons.

You might be able to get a second VA loan to buy a place to live in your new hometown without selling and paying off the government-backed mortgage on your first home.

Qualifying for two VA loans depends on how much entitlement thats the total amount the government is willing to guarantee you have left on your benefit. But its something thats routinely done.

5. Helps available if you run into trouble

With most mortgages, youre on your own if you run into financial trouble and cant make the payments.

Lost your job? Fallen ill and cant work? Going through a divorce?

Thats too bad.

But the Department of Veteran Affairs provides its borrowers access to all sorts of emergency assistance and advice. Thats why default rates on VA loans are so low.

If youve recently faced problems such as a job loss or sudden illness, VA Regional Loan Centers offer financial counseling specifically designed to keep your home out of foreclosure.

The counselor assigned to your case might negotiate a revised repayment plan with your lender or guide you through a sale if its simply not possible for you to continue as the owner.

In extreme cases, the VA might even opt for whats called a deed in lieu of foreclosure, in which the government assumes ownership of the home and releases you from any future financial liability.

6. You can refinance with a VA loan, too

Perhaps you took out a VA loan several years ago when interest rates were higher. There are three ways to refinance into a new and cheaper mortgage.

The Interest Rate Reduction Refinance Loan is for borrowers with a history of on-time payments. The application process doesnt require a home inspection, appraisal, credit check or income verification.

The programs purpose is to reduce monthly payments, so youre not allowed to take cash out of your home or consolidate other loans.

If you want to do that, you must request a cash-out loan, which requires a full-blown application process, including a home appraisal.

VA loans are one of the few types of mortgages that can be refinanced when the borrower is behind on payments. A loan officer must analyze each case, determine why the homeowner got in trouble and ensure the problem has been resolved. For instance, a borrower might have been laid off but recently returned to work.

7. Theres extra money for improvements

Adding an Energy Efficient Mortgage to a purchase or refinancing provides up to $6,000 for qualified improvements.

This work can include new windows and doors, programmable thermostats, additional insulation, heat pumps and solar heating and cooling systems.

The idea is to make the home more comfortable and reduce future utility bills. These loans are most often used when buying or refinancing an older home that needs some serious renovations.

The first step is to have an expert assess the home and generate a score using the Home Energy Rating System index. The HERS report will include specific recommendations for improvements and their projected monthly savings. That way you know youre getting the biggest bang for your buck.

The money is usually placed in an escrow account, so that its available to do the work after closing. Its repaid by rolling the balance into the primary VA loan.

This article originally appeared on Interest.com.

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Stock Update (NYSE:BAC): MOVES-Former Bank of America healthcare banker …

[Reuters] A former Bank of America banker who advises clients in the healthcare sector has joined Credit Suisse, according to an internal memo. Sumit Khedekar, who previously worked at the Swiss bank for ten years earlier in his career, will rejoin in January 2015. A Credit Suisse spokesman on Monday confirmed the contents of the memo. The Credit Suisse healthcare group has worked on notable transactions this year including Merck amp; Co Incs acquisition of biotech company Idenix and Zimmer Holdings Incs pending acquisition of medical device company Biomet.
Read more on this.

Bank of America Corporation (BAC), with a current value of $182.66B, began trading this morning at $17.36.

Today’s price range has been between $17.30 and $17.40 per share with its 52-week range being $14.20 to $18.03.

Bank of America (BAC) shares are currently priced at 36.94x this years forecasted earnings, which makes them relatively expensive compared to the industrys 17.26x earnings multiple for the same period.

The company pays shareholders $0.20 per share annually in dividends, yielding 1.20%.

In a review of the consensus earnings estimate this quarter, 23 sell-side analysts are looking at $0.33 per share, which would be $0.04 better than the year-ago quarter and a $0.01 sequential decrease. The full-year EPS estimate is $0.47 which would be a $0.43 worse than last years full-year earnings.

The quarterly earnings estimate is predicated on a consensus revenue forecast of $21.49 Billion. If reported, that would be a 0.00% decrease over the year-ago quarter.

In terms of ratings, FBR Capital upgraded BAC from Mkt Perform to Outperform (Oct 16, 2014). Previously, UBS upgraded BAC from Neutral to Buy.

Investors should keep in mind is that the average price target is $18.15, which is 4.55% above where the stock opened this morning.

Summary (NYSE:BAC): Bank of America Corporation, through its subsidiaries, provides various banking and financial products and services for individual consumers, small and middle market businesses, institutional investors, corporations, and governments in the United States and internationally. The company’s Consumer amp; Business Banking segment offers traditional and money market savings accounts, CDs and IRAs, checking accounts, and investment accounts and products, as well as credit and debit cards; and lending related products and services, working capital management, and treasury solutions. This segment provides its products and services through operating 5,100 banking centers, 16,300 ATMs, call centers, and online and mobile banking platforms. Its Consumer Real Estate Services segment offers consumer real estate products comprising fixed and adjustable-rate first-lien mortgage loans for home purchase and refinancing needs, home equity lines of credit, and home equity loans. The company’s Global Wealth amp; Investment Management segment provides investment and brokerage, estate and financial planning, fiduciary portfolio management, cash and liability management, and specialty asset management services; and retirement and benefit plan, philanthropic management, and asset management services. Its Global Banking segment provides various commercial loans, leases, commitment facilities, trade finance, real estate and asset-based loans, and consumer loans; treasury management, foreign exchange, and short-term investing options; and debt and equity underwriting and distribution, and merger-related and other advisory services. The company’s Global Markets segment offers sales and trading services for securities and derivative products in primary and secondary markets; market-making, financing, securities clearing, settlement, and custody services to institutional investor clients; and risk management products. The company was founded in 1874 and is based in Charlotte, North Carolina.

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Changes for Langport and Somerton savings service

THE Langport and Levels Area Savings and Thrift (LLAST), which operates as part of Opportunities in Langport and Somerton, is making some changes to its services.

It is increasing its personal budgeting and family financial management activities, but is no longer providing cash collection facilities for local credit unions, although it will still help people set up accounts or apply for low-cost loans.

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Chamber News & Views for October

The end of September was the end of the third quarter: time for another Professional Development Seminar!

The September seminar with the attention-getting title of Avoiding Financial Disaster, Ron Kramer of Kramer Accountancy gave a thoroughly sobering account of the many things that small businesses generally fail to do that can create very big problems down the road. Fortunately, he provided everyone with a Financial Health Checklist for getting on track for financial good health.

Simple things like make a budget! are so basic to really know how you spend your money. Kramer discussed some of the ins and outs of savings, wills, trusts, incorporating a business and dealing with taxes. A lover of technology solutions, he provided a couple of handy websites for managing your money: Mint.com for help in personal budgeting; and SmartyPig.com to help in saving for specific things. Small businesses in Topanga could use more of this great advice from Kramer. Lets ask him to start an advice column!

FIRST ANNUAL FOLK FEST TO BENEFIT ANAM CARA

Closer at hand, on October 26, we urge everyone to come to the First Annual Topanga Folk Fest benefiting Anam Cara. We promise it will be painless and full of joy!

This landmark event will be held on Sunday, from 11 am 6 pm; tickets are on sale at www.TopangaFolkFest.org. Many talented musicians have come forward to share their music. Featured and local artists create a dazzling lineup: Colin Hay, Cecilia Noel, Miner, Julia Fordham, Linda Perhacs, Freebo, Wild Reeds, Peter Alsop, Hani Naser Band, Philip Boone, Dan Navarro, Gwendolyn, Judith Owen, Paul Kenny, Jon Gilutin.

Please come, bring your family and invite your friends; be inspired to contribute and support the completion of Gabriels House at Anam Cara, whose grand opening is planned for this coming spring. Lets fulfil Gabe Gelbarts dream for a compassionate care home that provides a unique, natural setting for a fully supported experience at the end of ones life.

Chamber Vice President, Mitch Metzner, writes that Anam Cara is not the same without Gabe, who passed away unexpectedly this past June. But those who are diligently working on the hospice home continue to move forward, inspired by his memory, his love of this community and his last projectto create the Topanga Folk Fest, a community heritage event and fundraiser for Anam Cara.

The team at Anam Cara continues to walk the talk and opens the doors for monthly events such as Volunteer Garden Day (first Sundays) for the native California landscape projects, Hospice Volunteer and Community Potluck socials and end-of-life educational evenings (third Thursdays), and quarterly events such as the Hospice Volunteer and Professional Training (the next one will be held November 1416). For more information, contact RuthKlein@AnamCaraLA.org; or call (310) 455-0419. Tax deductible donations can be made online at www.AnamCaraLA.org checks made payable to Anam Care can be mailed to 1178 N. Topanga Canyon Blvd., Topanga, CA 90290. For more information and to get involved, please visit www.AnamCaraLA.org; (310) 455-0419.

CHAMBER NEWS

The Topanga Guide,sporting the first ever list of 27 Things to Do on Scenic Route 27 (See the list in a separate article in this section), has gone to print. Please contact us if you would like to distribute copies in your neck of our woods.

October 29, Evening Mixerfeatures well known and loved local realtor, Tanya Starcevich. Check the Chamber calendar for details.

Heads Up for the Holidays!Despite the still-hot days, October is when the Chamber starts working on holiday plans. The Holiday Party will be held this year at the Topanga Community Club on December 6. Mark your calendars and well have details out soon, along with tickets for sale!

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Bethpage Federal Credit Union opens first campus branch at LIU Post

LIU Post in Brookville on April 14, 2013. (Credit: Ian J. Stark)

Bethpage Federal Credit Union has opened its first branch on a college campus at LIU Post in Brookville.

The branch employs two full-time employees and two part-timers who are LIU Post students getting hands-on training in how a bank operates and in basic personal budgeting and money management.

The students also will have opportunities to become summer interns at Bethpages headquarters…

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Freddie Mac: Homeowner demand for home equity loans doubles

Homeowners are taping into their home equity at double the pace due to continual home price increases, pulling more borrowers out from underwater, Freddie Macs third-quarter refinance report said.

However, despite the surge in demand, the dollar volume remains very low at an estimated $8 billion.

The peak in cash-out refinance volume was $84 billion during the second quarter of 2006 ($97 billion in 2013 dollars).

According to Zillows latest home value index of $176,500, the rate of annual home-value appreciation peaked at 8.1% in April and has fallen in every month since. US home values were up 6.5% year-over-year at the end of the third quarter.

While the share of borrowers that cashed-out some equity has increased considerably over the past year, the refinance volume has also fallen sharply, resulting in a relatively small amount of equity cashed-out, to the tune of roughly $8 billion which is less than one-tenth of what we saw at the peak in mid-2006, said Frank Nothaft, Freddie Mac vice president and chief economist.

The good news, to put it into numbers, those that lowered their payment by refinancing into a cheaper mortgage rate will save more than $1.5 billion in interest payments over the next 12 months of their new loan.

On average, thats an interest rate reduction of about 1.3 percentage points — a savings of about 24% On a $200,000 loan, that translates into mortgage interest savings on average of about $2,700 during the next 12 months, Nothaft said.

Additional quick facts from Freddie Mac:

  • The report found that of borrowers who refinanced during the third quarter of 2014, 36% shortened their loan term, a 4% decline from the previous quarter. From 1990 through 2013, on average 28% of borrowers shortened their term.
  • About 72% of those who refinanced their first-lien home mortgage maintained approximately the same loan amount or lowered their principal balance by paying in additional money at the closing table, unchanged from the previous quarter. Twenty-eight percent cashed-out some equity, the highest share in five years; the peak on cash-out share was 89% during the second and third quarters of 2006.
  • The median age of the original loan outstanding before refinance was 7 years during the third quarter. The median age was 7 years or older in each of the last four quarters, the most since the analysis began in 1985.
  • In the second quarter, an estimated $8.0 billion in net home equity was cashed out during a refinance of conventional prime-credit home mortgages, up from the revised $5.6 billion last quarter. Adjusted for inflation, annual cash-out volumes during 2010 through 2013 have been the smallest since 1997.
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Your Family’s Business | Finance Tips for Military Families

Stacy Bush, Valdosta Today Business Contributor:

One survey found that 77% of military personnel have some financial worries, mostly regarding their lack of savings to cover retirement or other needs.  While the financial situation of military personnel and their families mirror the general population in many respects, heavy indebtedness and mismanagement of credit cards may be especially acute issues for service members.  Of course, military families face unique challenges, such as deployment to conflict zones, overseas assignments and the constancy of change, making personal finance even more critical for those in the Armed Forces.

Money Tips to Consider  

  • The Thrift Savings Plan is one way to save for retirement and a Roth TSP is now available.
  • The Savings Deposit Program allows eligible personnel serving in designated combat zones to invest up to $10,000 and receive a guaranteed return of 10%.
  • Saving in a Roth IRA may be a good idea if you receive tax-free combat-zone pay. This allows you to deposit tax-free income and take tax-free qualified withdrawals in retirement.
  • The Post-9/11 GI Bill covers the full cost of in-state tuition, up to 36 months.
  • Service member’s Group Life Insurance protects your family with low-cost life insurance.
  • Set Goals–Like any mission, success begins with articulating goals you want to pursue.
  • Establish a Budget–A budget provides the financial discipline that may help you control spending impulses that can lead to greater debt levels.
  • Pay Yourself First–Determine how much money you need to set aside to reach your savings goal, deduct this amount from your paycheck, and attempt to live within the limits of what remains.
  • Establish an Emergency Fund–Uncertainty marks the life of military families, so be sure you have an emergency fund that allows you to be as prepared as possible for these changes.
  • Control Your Debt–Indebtedness is one of the enemies of financial independence.

As you think through your financial goals, remember, taking action today is your first and most important step.

CONTRIBUTOR

Stacy Bush has practiced independent financial advising in the Valdosta area for 14 years. Growing up on a farm in Donalsonville, Georgia, he is keen to the financial needs of South Georgia and North Florida families. Stacy and his wife, Carla, live in Valdosta with their four children. You can submit questions about this article to askstacybush@lpl.com

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Picking the Right Mutual Fund for You – Mutual Fund Commentary

Picking the Right Mutual Fund for You

One of the most common questions I get regarding mutual funds is
which one is right for me and my investment goals, and how do I
find it amongst the thousands of available mutual funds.

Finding Out What to Look for

You need to ask yourself several questions before investing a
single penny into any investment vehicle. What is your
investment goal? How long is your investment horizon? What is
my risk tolerance? What am I comfortable investing in?

This can be an exhausting task, but a successful investment plan is
essential to having a fruitful investment rather than donating your
hard earned money to a mutual fund manager in the forms of fees,
expenses, and losses.

Answering the Big Questions

What is my investment goal? Is it for your 401K, retirement,
or a personal investment vehicle? Most people are trying to
pick the Right mutual fund for their 401K retirement fund.
First and foremost, if your company offers indexed funds for your
401K, take those. Index funds tend to outperform managed
mutual fund investments time and time again.

But, if you are like most people, you are not offered indexed funds
within your 401K options, and therefore are looking for a bit of
guidance through the mine field of load fees, expense ratios, and
performance levels.

As with any investment vehicle, you need to know what your end goal
is attempting to accomplish. Most people looking into mutual
funds tend to be looking for longer term investments (3-5 year
investment horizon), or retirement investing (long term
investments). We will continue with these two investors in
mind.

So Which Fund is Best for You?

To best understand which fund is the best for you, you have to know
what your risk tolerance is, and what companies you are comfortable
investing in for the long haul. Risk is measured by
Beta. The higher the Beta, the greater the risk, but also the
greater potential return. The lower the beta, the lower the
risk, but also, the lower the potential for a big Home Run
too.

Typically, a younger person would invest in higher Beta funds due
to their overall investment time horizon, where as an older person
approaching retirement would most likely take a much lower Beta
because they want to limit their overall risk due to the fact they
cannot afford (monetarily or for personal budgeting purposes) to
take such a high risk level. The older investor does not have
the time to make up any high risk failure, while a younger person
has more time to absorb any risk loss.

What Am I Comfortable Investing In?

The second part, is what am I comfortable investing in; with over
8,000 available mutual funds, there are a myriad of types of
funds. There are Growth, Income, Value, Small Cap,
Large Cap, Utilities, Technology, Finance, just to name a
few.

These funds pool their assets and purchase securities, bonds, or
derivatives, according to the goal of the specific mutual
fund. For example, a Finance Mutual Fund would be heavy bank
stocks, brokerage houses, but not have a single investment in any
company that does not relate or deal directly with the financial
community. This enables the investor to focus on one specific
area, and purchase many stocks of multiple companies in which
he/she would not have been able to without the usage of a Mutual
Fund.

Being Aware of the Pitfalls, Expenses

The most important item to check when shopping for mutual funds,
are the expenses associated with the fund. This expense ratio, and
other expenses can be found in the funds prospectus under the
heading Shareholder Fees. This section is without a doubt the
most important section of the prospectus because it tells you how
much $ the company and the fund manager are going to take from your
investment and potential profits (oh, fund managers still make
money when you lose too).

I had previously written a few articles regarding the pitfalls of
mutual fund Expense Ratios, and Loaded funds. Each article
has an in-depth look at what these 2 major costs can do to your
overall investment, and the negative impact they both have on your
end returns. Please click on them to get a fuller
understanding both
Mutual Fund Expense Ratios

, and
Load Fees

.

Consistency In Performance

A fund manager might do exceptional one year, and just completely
fail the next year. There have been top fund managers for
several years, then just could not pick a stock to save their life
a year later. What is important to look into is the
consistency of the fund manager, and their performance over a
measurable period of time. Consistent mild returns are
much better than volatile swings in performance. Remember,
this is your money, and you want someone who is reliable and
produces positive returns on a steady basis.

Bottom Line

There are a ton of Mutual Funds out there, and each one is unique
with its own style, services, availability, costs, and
returns. Once you answer the 4 initial questions poised
earlier, you will have a much better understanding of which fund is
right for you and your investment goals.

Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report

To read this article on Zacks.com click here.

Zacks Investment
Research

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Equifax Reports New Credit for Revolving Home Equity Loans Increases More …

ATLANTA, Oct. 20, 2014 /PRNewswire/ — Equifax announced its latest National Consumer Credit Trends Report, the total balance of new credit for revolving home equity loans year-to-date in July 2014 is $65.9 billion, a six-year high and a year-over-year increase of 21.4%. Similarly, the total number of new loans in that same time is more than 670,000, a six-year high and a year-over-year increase of 16.1%.

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NHS workers ‘need two jobs’ to survive, research says

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One in five health workers has more than one job because they would not survive without a second source of income, new research has revealed.

A survey of over 3,300 NHS employees by Unison also showed that just over half were overdrawn every month.

The study, published ahead of a four-hour strike by health employees on Monday, found that extra jobs included lifeguard, tourist guide, hairdresser, driving instructor, gardener and dog groomer.

Some had started their own business, or did extra hospital shifts, complaining that they could not live on their NHS salary.

Nurses, midwives, ambulance drivers, hospital porters and other health workers will walk out from 7am on Monday in protest at the Governments controversial decision not to accept a recommended 1% pay rise for all NHS staff.

Unison said its poll showed that almost two out of five health workers relied on credit cards, while 13% had resorted to payday loans.

Christina McAnea, Unisons head of health, said: The Government is refusing to acknowledge that there is a real poverty problem affecting NHS workers.

A demotivated, stressed workforce is bad for patients and bad for the NHS.

In Britain today, we have NHS workers struggling to buy food, pay for their bills and who as a result fall into a cycle of debt and despair. Morale in the NHS is at an all time low.

NHS workers work day in day out to provide vital care and support for millions of patients so they deserve fair pay. A full time hospital cleaner should not have to deliver pizzas after work to make ends meet.

Its time NHS workers get a fair deal for the invaluable work they do. The Government needs to step back from the brink and reconsider its pay policy urgently.

Unison members and midwives will be taking action in England, while members of Unite and the GMB will be on strike in Northern Ireland as well.

Rehana Azam, national officer of the GMB said: NHS staff take action with a heavy heart as their only priority is to deliver the best patient care, quality and outcomes. Even after staff voted to take strike action and action short of a strike the Secretary of State for Health has refused to meet with the unions representing NHS staffs.

The GMB has agreed with ambulance services that life-threatening and certain other categories of call (such as renal dialysis and oncology patients) will be responded to by GMB ambulance crews during the strike, while major and hazardous incident teams will remain on duty in case a major incident occurs.

Unions said most NHS workers will not receive a pay rise because only those at the top of their pay band will get the 1%.

Rob Webster, chief executive of the NHS Confederation, said: We are working through some of the toughest times in the history of the NHS. Throughout this long period of pay restraint and pressure on services, employers have always sought constructive discussions with unions and the Government to find a way out of this situation together. We hope progress is still possible.

We are seeing the NHS finding it difficult to manage its finances this year and staff under pressure. A pay award for all staff, on top of increments, would have cost £450 million more the equivalent of 14,000 newly qualified nurses.

Hard-pressed staff would have been put under greater pressure or may have had to be reduced. Restraining pay was a tough decision for politicians to make and I believe they did it on the basis of improving the quality of care and maintaining continuity of services.

Ahead of Monday, employers are pulling out all the stops to minimise disruption to patients and unions are co-operating with this planning ahead of the strike to ensure patients remain safe.

I know that thousands of patients will already be anxious because important NHS services, such as ambulance cover, will be under additional pressure on the day and during the week of action short of a strike that will follow it. If appointments have to be rescheduled this would cause unnecessary distress and we urge staff to reconsider taking part in the strike.

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