When it comes to preparing your finances for buying a home, the first step is to understand your budget thoroughly. However, there’s another crucial aspect that might not be immediately apparent – the need for mortgage protection. Mortgage and Protection Director, Jack Miller elaborates on why prioritising mortgage protection should be a part of your planning process.
Purchasing a new home is undoubtedly one of the most exhilarating moments for anyone, from embarking on the quest for that perfect property to finally holding the keys and decorating it to your liking.
Regardless of whether you are a first-time buyer or transitioning to a new home, it is undeniably a significant financial undertaking and can also be a large source of stress.
But where do you start, especially if you’re doing it for the first time?
To begin the home-buying process, the first step is to carefully evaluate your budget. Since most people will require a mortgage, it is crucial to assess how much you can afford and how much you might be eligible to borrow. Consider your potential mortgage repayments and how they fit into your overall financial obligations, including other bills and expenses.
Before commencing your search for a new home, it’s wise to establish this financial information. With numerous mortgage options available, seeking guidance from an experienced mortgage broker such as The Residential Mortgage Hub can be invaluable. We can help you calculate what you can realistically afford and explore various mortgage deals from multiple lenders in the market to find one that suits your needs.
Providing essential details about your current circumstances will lead to receiving a decision in principle or an agreement in principle from a lender. This initial promise indicates the amount they are willing to lend you, subject to various other factors, giving you an idea of your potential property budget.
While you may have already identified some ideal homes, there are still additional steps and considerations ahead before the home-buying process is complete.
What protection do you need for your mortgage?
One aspect that might not immediately come to mind when making the decision to buy a property is protection.
Protection comes in various forms, such as life insurance, critical illness cover, and income protection, with options available to address almost any unforeseen circumstance. Although protection may seem like an unexciting and unnecessary addition, life is unpredictable, and we cannot foresee what lies ahead.
Insurance and protection serve a crucial purpose, not to increase wealth, but to protect what you have during challenging times and offer a sense of security. Undoubtedly, protection services and products play a vital role in financial planning, particularly for individuals with mortgage and family responsibilities.
Losing a job or regular income can be devastating, and relying solely on the welfare safety net may not be sufficient. Just as homeowners or renters would never go without home insurance, protecting yourself and your family is equally important. Considering the significant monthly mortgage payment that keeps a roof over everyone’s head, it becomes essential to contemplate what would happen if a regular income were no longer available.
How much does mortgage protection cost?
While protection policies do come at a cost, the market offers a diverse array of policy types from reputable firms.
Various factors can influence your premiums, including age, where generally younger individuals benefit from lower costs. Certain occupations may be deemed higher risk, leading to higher premiums. Health conditions can also impact the cost, with smokers or individuals with higher alcohol consumption likely to face higher life cover costs. Moreover, your body mass index (BMI), which is determined by your height and weight, can significantly influence premiums or even the ability to obtain life assurance.
Not everyone requires every type of insurance or protection, making it a complex area to navigate. This is where a professional mortgage broker can prove invaluable in guiding you to the right solutions. Seeking the right advice now can safeguard you and your family from life’s unexpected challenges. Contact our team today on 01634 96811 or book your appointment online to discuss your options.
Important information
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount will depend upon your circumstances.
The fee is up to 1% but a typical fee is £598.
For insurance business we offer products from a choice of insurers. As with all insurance policies, conditions and exclusions will apply.
