At Kieron Bassett Financial Services whenever we recommend a mortgage we will always look to re-assess a clients insurance needs. It is often suprising when we do this to see how little insurance people have, given that it should be an essential part of anyone’s financial plan. What is even more surprising is the reasons people give for not having life insurance, the most common being “I can’t afford it”.
However if you are willing to take out the liability of a mortgage on a property it is your responsibility to ensure those mortgage payments can always be paid. We can’t be sure of much in life but insurances can provide security should the worst happen. So when you are looking at getting a mortgage from the very beginning you should view the mortgage payment and insurance payments not as separate things but more as a package of products that are your key essentials to own a home, and if you cannot afford the whole package perhaps you should look to buy a more affordable home with smaller mortgage payments.
I would urge anyone seeking a new mortgage to sit down with their most recent bank statement and really assess what your money is being spent on, if you are worrying about affording insurances. Luxury items such as posh coffees every morning on the way into work can soon add up over the month. Assuming the average latte costs around £3, five times a week that’s £15, and over a four week month you are soon looking at £60 a month on coffee. Maybe coffee isn’t your thing but you are into weekend takeaways. Asking around the office the average spend on a takeaway is £25, get one every weekend and that’s another £100 spent on something that you don’t need.
I am not dictating what you should and should not spend your money on but I just think when you get a mortgage you really need to be prioritising what is more important and life insurance should be at the top of that list. Maybe now you’ve got the mortgage only get one takeaway a month and then you can afford to put that life and critical illness insurance policy in place, thus protecting your family and your own financial future as well as saving your waistline.
Sammy McCann Cert CII (MP)
18th February 2019