Buying a Home
Whether you’re buying your first home or adding to your property portfolio, it is important to review your financial planning to ensure you’re fully prepared. Purchasing property is a big investment and whilst it is perceived as a safe investment, it is an illiquid asset so it’s important to make sure that you can afford to keep up with instalments and have protection in place should you be unable to meet payments due to illness or death.
Here are some things to consider:
Roof leak? Boiler broken? This is where your emergency fund comes in handy, in those unexpected moments when you need quick and easy access to some cash. As a general rule of thumb, your fund should be 3-6 times your monthly salary – try to stick to it!
If you require a loan to purchase a property, then you’ll usually need to have at least 15-25% of the value for a deposit.
Life & critical illness insurance
Life insurance can be bought when taking out a mortgage to cover the cost if you should die before it is paid up. Typically decreasing term insurance is the most suitable (and the cheapest) because as your mortgage liability decreases, your life insurance decreases with it until both are at zero.
Income protection insurance
This policy would provide you with an income should you become unable to work for a prolonged period of time. You don’t want to be eating into your holiday or retirement savings in order to pay for your mortgage whilst you’re recovering.
Home contents cover
Accidents happen and we never think it’ll happen to us until it does. The cost of replacing possessions in your home after a fire or flood could make your eyes water so why not cover yourself with an inexpensive and essential insurance?