Protection
As your mortgage is the largest financial commitment that you will ever have and your home is the most valuable possession that you will ever own, it is essential that you protect your mortgage and your home.
Protecting Your Mortgage
It is still the case that if you cannot pay your mortgage the lender will ultimately seek repossession and you will lose your home.
The effects of this are devastating for an individual and even more so for a family. Everybody is vulnerable to the loss of an income, no matter how secure you think your income is and last year many thousands of people from the public and private sector, who thought their income was secure, were repossessed.
The effects of repossession extend from the physical difficulty of moving home again to the emotional strain and disappointment. Also, the financial effects of having to rent again, the backward step of moving in with parents and the future problems of your damaged credit score. Many lenders will simply not lend to people who have been repossessed and many lenders who will, will impose higher interest rates.
Reasons for loss of income can include:
- Redundancy
- Accident
- Sickness
- Critical Illness
- Death of a party to the mortgage
Missing mortgage payments due to loss of income need not be this devastating, but could result in you having to extend your mortgage term, paying more interest as you catch up on missed payments, increasing your monthly payments, using savings that you had earmarked for other purposes and problems re-mortgaging or moving in the future as your lender's statement will show mortgage arrears long after you have caught up on the payments.
There is no quick fix once you have fallen behind on mortgage payments.
The good news is that it has never been more cost effective to protect your income for any eventuality in the form of a replacement income until you can return to work, or a lump sum if you may be unable to return to work.
Protecting Your Home
Your lender will insist that you have a buildings insurance policy in place to protect their financial security in the event that the property suffers any structural problems resulting from fire, flood, storm, subsidence and so on.
The contents of the home can also be protected whilst in the home, garden, or away from home.
There are many insurance companies offering a vast array of types and cost of cover. An independent adviser will be able to provide you with a protection package geared around your needs and budget.
YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER LOAN SECURED ON IT. WRITTEN QUOTATION OF CREDIT TERMS AVAILABLE ON REQUEST.
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