By Ruth Hennelly, certified financial planner professional and Managing Director of Hennelly Finance
If you are planning to buy a home, the prospect of applying for a mortgage can feel daunting. Thankfully, there is plenty of support to help you navigate lenders' criteria, deposit requirements and application paperwork. Yet to optimise your mortgage experience, an impartial financial adviser can give you specialist insight into the sometimes-overlooked aspects of a mortgage, adding considerable value to your investment.
One of the first steps to prepare for a mortgage is saving a deposit. While traditional deposit accounts may feel familiar, they tend to yield low-interest—especially when deposit rates are low, and inflation is high. If you have five years or more to save for a deposit, you could consider alternatives like a unit-linked regular savings policy, which leverages monthly savings to benefit from a principle called unit cost-averaging from stock market fluctuations. You buy into the market at different price points through drip-fed monthly contributions, which helps manage your risk and exposure to market volatility.
Another aspect of preparing for your mortgage is mortgage protection, which will be a condition of your mortgage drawdown. While your lender's mortgage protection policy may seem convenient, you could save significantly by consulting an independent financial adviser who can compare options from multiple providers. Your financial adviser can also help avoid the stress of potential delays where the insurance provider has requested further medical information, ensuring your mortgage protection policy is in place before your property transaction closes.
Getting a mortgage is one thing—but what about protecting it in the event of the unexpected? Your income is one of your most valuable assets; without it, you might not be able to cover your mortgage repayments. While an illness or injury could leave you unable to work, bills such as your mortgage, car loan, groceries and possible additional health expenses still need to be paid. Income protection is designed to provide you with an income if you suffer a long-term illness or injury that means you cannot work. It helps take care of your financial needs to let you focus on your recovery.
Planning is without a doubt the key to making your mortgage experience a smooth one. While buying a home is a major financial milestone, it is just one part of your bigger financial journey. Your needs will change over time, from managing your mortgage to planning for your family's future, saving for your children's education, and eventually preparing for retirement. A financial adviser can help you navigate these transitions with confidence – and when it comes to perhaps the biggest purchase of your life, can give you the confidence to focus on what truly matters—turning your new house into a home, settling into your community, and embracing this exciting new chapter.
