... it's your birthday
It’s a double celebration for us in July - a couple of birthdays in the office with a celebratory team night out certainly gets us chatting about our age, the years passed and the years yet to come. Birthdays are a definite celebration of a person’s age and a marked point in the year, and, although we may avoid asking a person their age generally, when it comes to mortgages and protection a person’s age at their next birthday can have a notable influence on the advice we give.
Mortgages and Birthdays
There are a few key ages to consider in the world of mortgages:
70 years of age is the typical maximum age that a person’s mortgage term can run to. Some lenders have a maximum of 75yrs and fewer are 80yrs. As increasing the term is utilised to reduce the monthly payments, the age of person at the point of application can affect what term we can apply for and which lenders are able to meet the needs of a client.
The age of an applicant’s children are also significant. If an client needs to utilise Child Benefit as part of their evidence of income, lenders will only accept this, typically, if their child is under 12yrs old.
As a more minor consideration, if there are any persons living in a house who are 17 years or older and are not named on the mortgage application, lenders require this noting in the case of the property being repossessed and this person claiming a right to reside in the property.
Protection and Birthdays
‘The younger: the cheaper’ is a general rule for protection premium costs. We advise our clients to not play into the hands of the misconception that protection is not needed until later life when you are considered to be at greater risk of being diagnosed with a critical illness or passing away. Securing a protection premium when you are deemed to be a lower risk to providers means that your premium will be cheaper for the life time of the premium. Also, consider that unexpected life events can happen at any age, and as younger people may have greater credit commitments, e.g. more outstanding on their mortgage, their is the argument that they may have more to lose and, therefore, more to protect. As a protection premium quote can increase every half birthday, the sooner you apply for a policy, the better.
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