Buying your first home is exciting but it’s also a big responsibility. You’re taking on a huge financial commitment over a very long term. Like most first-time buyers, your focus is likely to be on securing your mortgage; however, protecting your new home and lifestyle is just as vital. Here, we’ll look at why protection insurance for first-time buyers is just as important as arranging a mortgage.
Mortgage considerations
As a first-time buyer in Bromley or Orpington, you’ll need to consider:
- Your deposit size and different lenders’ criteria
- The affordability assessments
- Solicitors and surveys
- Getting the right mortgage product
That’s where a broker helps, guiding you through every step. After discussing your situation and carrying out a quick assessment of your finances, they’ll know which mortgage products are suitable for you. Armed with your mortgage in principle, you’ll have the confidence of knowing what a lender is prepared to offer you. This helps you stick to a budget and shows sellers that you’re a serious buyer.
Once you’ve found a property to buy, the formal mortgage application process can begin. With access to lenders and deals that you may not be able to find on your own, your mortgage broker can find the best deal to suit your financial situation.
Protection insurance for first-time buyers
What many buyers overlook is that the mortgage doesn’t work without them. Think about what would happen if an illness, injury or worse prevented you from working. Who would cover your repayments? Having protection in place gives you and your loved ones financial security and peace of mind when life doesn’t quite go to plan.
There are various protection options to consider and these include:
- Life insurance to clear the mortgage if the worst happened
- Income protection to pay the bills if you can’t work
- Critical illness cover to provide a lump sum on diagnosis
Is having protection a legal requirement?
When arranging your mortgage, taking out a protection policy is not a legal requirement as far as the lender is concerned. It is, however, highly recommended due to the risks faced if you don’t have it in place. Your mortgage loan is based on your affordability but if something should unexpectedly happen that renders you unable to earn an income, that puts your repayments at risk. In a worst-case scenario, if you’re unable to make those repayments, you risk your home being repossessed.
Therefore, protection ensures that your repayments are covered, giving you and your loved ones peace of mind and a financial safety net. You won’t need to use your savings or put the burden of managing the payments on a family member. And you won’t risk losing your first home as a result of repossession.
How to decide what protection you need
Your circumstances are unique so the protection you choose will depend on various factors. These include:
- The size of your mortgage
- The length of the mortgage term
- Your budget
- Your age, health and occupation
- Any protection cover you already have in place
- Whether you have any dependants
- Whether you prefer monthly payouts or a lump sum
Our mortgage and protection brokers are here to help you choose the right protection for your needs and circumstances, taking your future plans into account, too. Using their expertise to ensure you receive the right advice, you can rely on a tailored policy that protects your new home and the security of you and your loved ones.
Take action early
Protection is cheapest and easiest to secure when you’re young and healthy so the perfect time to arrange it is alongside your first mortgage. But that doesn’t mean that it’s not worth it as an older borrower or after you’ve already moved into a property. As mentioned above, there isn’t a one-size-fits-all solution when it comes to protection so you can benefit from a completely personalised plan.
Why local advice matters when choosing your protection cover
One aspect that can affect the type and level of protection cover that you prefer is your budget. Our brokers have in-depth knowledge of the local areas and understand how the property market can impact your choices. First-time buyers in Bromley, for example, face high property prices and tight affordability. Having tailored advice, therefore, ensures that both your mortgage and protection are sustainable.
Are you ready to invest in your first home and safeguard it against unforeseen events? Speak with Gemma Weekes for first-time buyer mortgage and protection advice in Bromley and Orpington.