Matthews IFA Ltd
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A mortgage for the long term?

It seems that mortgages are fashionable again, well, within the political arena at least. For the rest of the UK mortgages have been, and will remain, a core aspect of our life cycle.

The desire to be on the housing ladder – whilst diminishing slightly and taking slightly longer to achieve – is still a key aim for the vast majority of the population. I believe that there is a need for us all to look at the reason we need, rather than want, a mortgage and consider the potential for this to disappear.

It is safe to say that none of us would choose to take out a mortgage unless we had to. I am sure that we would all like to live in a world where we all earned enough to be able to buy the house of our dreams by just writing a cheque. However, unless you are Gareth Bale, Kate Winslet or Elton John, then I am guessing it’s back to reality.

So, we need a mortgage to be able to buy a house. With a combination of governmental assistance, mortgage lenders proactively looking to increase their lending and the beginning of the return of consumer confidence, we are seeing an increase in mortgage activity.There may be a few more hoops to jump through and a greater requirement for documentation but the reality is more people are now looking for, and getting, a mortgage. That is great news!

The potential problem is that for many people, that is the end of their financial product purchases. Whilst we may not be able to forecast our future, we can protect against some of the more unpleasant aspects of life. As a nation we are underinsured, whether that is personally or our property and possessions.

This is not insurance industry propaganda to entice us to buy, it is fact. We need to take responsibility for these ourselves and ensure that where possible we keep the property that we fell in love with.

I will not bore you with statistics, but every year there are a large number of people that will unfortunately become ill, be unable to work, have an accident, lose a limb or be immobilised. In addition, we also have to acknowledge our own mortality, and add to this that unemployment and redundancy are still a fact of life, whilst not pleasant thoughts, they are a reality.

The need for us all to protect ourselves is important as the government safety-net of benefits is not there to keep us in the lifestyle to which we have become accustomed, it is to provide for a minimum standard of living. Fortunately, there are a number of different types of insurance policies available that can help to bridge the gap. Also, many properties are underinsured or not insured at all, which is a frightening thought.

It is a question that we need to ask ourselves on a regular basis. Why would we work so hard and save for so long to be able to buy a property, and then not ensure that we have protected both to make sure that we can stay there?

When we are looking at whether we can afford to buy a property, we must consider that this is not just at the outset, but for the long term. Affordability of the monthly repayments should always include the necessary insurance premiums to ensure that, whatever happens, you and your family will always have a roof over your heads.

Please talk to us if you are unsure about whether you have adequate protection, and we can help ensure that the joy of owning your own home will not just be for the short term.

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