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Essentially Mortgages Winter 2019

13th February 2019

HOW TO AVOID BUYING A MONEY PIT

It’s important not to let your heart rule your head when buying a home. It’s easy to overlook a few potential problems, when you’ve found a property that seems to be ticking all the right boxes.

Getting a structural survey carried out by a professional surveyor is an important step. They will take an objective view of the property and report on any problems that might be expensive to fix.

A thorough inspection

Surveyors will methodically run through a list of important points and compile a report. They will be on the lookout for structural problems such as signs of subsidence, water damage or damp. Getting boilers and central heating systems checked out too makes sense, as replacing these can be a major expense.

If the survey shows that work needs to be done on the property, you’ll be provided with an approximate figure for the cost of repairs. If you still want to go ahead, you can use your surveyor’s report as a bargaining tool to seek a reduction in the purchase price.


DOWNSIZING – A CHECKLIST OF POINTS TO CONSIDER

It’s traditionally viewed as a step that people take once their family has flown the nest, or when the task of maintaining, repairing and heating a large home becomes too onerous.

Deciding to downsize is always a big decision, and one that requires a lot of careful thought. A recent study found that 35% of adults aged 65 and over would consider downsizing – representing 4.1m pensioners4.


Doing the sums

It makes sense to look at the cost of your proposed move carefully to be sure that it works financially. Downsizing can cut the time you spend on cleaning, maintenance and gardening, and your gas, electricity and council tax bills could be lower, but you’ll also need to factor in expenses such as Stamp Duty (LBTT/LTT in Scotland/ Wales) and legal costs associated with your purchase. Plus, if you opt for a leasehold flat you are likely to pay service charges and ground rent.

As there’s always a demand for retirement properties such as cottages and bungalows, a smaller property may have a high price tag, especially if it’s located in a desirable area.

Community connections

Unsurprisingly, many people who downsize do so to be nearer other family members. By contrast, others look for a complete change of scenery in a different part of the country, giving them the chance to explore new places and make new friends. Whatever your situation, you need to think about your family, friends and community, and weigh up what you’d be gaining and losing in social terms by making your move. If you have an established network of contacts, such as doctors and dentists and other support services, then you’ll need to think about re-establishing this in a new location.

Ask yourself important questions

When you find a place you want to move to, it’s worth asking yourself a few searching questions:

  • Can you see yourself living here for the foreseeable future?
  • Is there enough space for family and friends to visit?
  • Is the garden the right size?
  • Are the shops close enough if you’re unable to drive?
  • Is there a doctor’s surgery within walking distance?

4McCarthy & Stone, Aug 2018



BUILDINGS AND CONTENTS INSURANCE – FOCUS ON COVER, NOT JUST PRICE

When it comes to buying buildings and contents insurance cover, the range of policies on offer in the market can seem bewildering.

Although using online comparison websites can seem like an attractive, convenient option, people can fall into the trap of buying the wrong policy for their personal circumstances. It can be a false economy if the appeal of a lower premium leaves you without the appropriate cover in an emergency. That’s where your adviser’s experience and understanding of your circumstances can make a vital difference.

Your adviser can help you to focus on the features you need, not just the price. They will ensure that the cover and terms and conditions meet your specific needs and requirements, from the size of your excess, to additional cover, such as accidental damage and home emergency cover.

THE KEY IS TO FOCUS ON FEATURES, NOT JUST PRICE


IN THIS ISSUE

LIFE INSURANCE
SEPARATING FACT FROM FICTION

I get cover at work – I don’t need more

The amount you’re covered for might not be sufficient for your needs, and if you change jobs, that will change too. Plus, with your own policy the cover can be tailored to your specific needs.

I’m not a breadwinner, so I don’t need insurance

The bill for replacing all the services homemakers provide – like cooking, cleaning and childcare – can amount to a hefty sum. If you weren’t around to provide these, then your partner could face considerable additional costs. Many people hope their wider family would rally round, but raising a young family is costly, and relatives won’t have planned for the added expense.

It’s too expensive

Not so. Life insurance is far less expensive than many people imagine. We can help you find a deal that fits your budget, and you can always take out additional cover later on.

I don’t have kids, so it’s not relevant to me

Whilst it’s true that there’s less need if you don’t have a family, how would your partner manage if you weren’t around to contribute to the bills?

I’m too young to need cover

Protection policies aren’t just for older people, and the younger and fitter you are when you take out a plan, the cheaper the premiums will be. Leave it too long and you could find yourself paying a much higher price.

There’s too much choice

It’s true there are lots of different types of policy, each designed to provide cover for specific risks. That’s where we can help. We can find the right type and level of cover to meet your insurance needs and your budget.

WE CAN HELP YOU FIND A DEAL THAT FITS YOUR BUDGET

AT 55 YOU’RE NOT TOO OLD FOR A MORTGAGE

True, it might be a bit more difficult, but the good news is that lenders are increasing their age limits as they know that more and more borrowers want to borrow money later in life. Whilst there is no maximum age for applying for a mortgage, most lenders have their own age limits, and will operate an age limit on when the mortgage term ends, but this can be up to age 85.

As with any borrower, whatever their age, having a good credit history and sufficient income to cover mortgage repayments can be deciding factors. If you reach retirement before you’ve repaid your loan, you won’t be receiving a salary but will be receiving a pension. So, lenders will need to be sure you’ll be receiving sufficient income to cover your monthly repayments.

Getting financial advice will really help. We know the market well and can recommend the right lender to approach for the type of mortgage you need.

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