Make Protecting What You’ve Earned Your New Year’s Resolution

In that all too familiar lull between Christmas and the New Year, it’s tempting to stay in a mulled wine and mince pie haze – that’s until January hits and you’re thrust into a new year, unprepared and full of turkey.

 
But it doesn’t have to be this way – that downtime can be the perfect opportunity to reassess your financials for the year ahead, and Mortgage Advice Bureau suggests pushing protection to the top of your list. So grab a mug of hot cocoa, switch off the re-runs of Elf and Home Alone, and check out these tips on how to get your mortgage payment protection in tip-top condition in 2023.
 

Get clear on non-eligibility

 
Whether you’re looking to take out mortgage payment protection for the first time, or are reviewing your current policy, there may be clauses in your policy that preclude your eligibility. For example, it can be harder to find a policy that covers you if you are self-employed. Also, think about what your policy covers and whether this meets your needs. Not all policies provide comprehensive protection in the event of any and all illnesses, redundancies and accidents. You should check the small print and talk things through with a trained adviser to ensure there aren’t any aspects of your own personal situation that make you exempt.
 

Maximise your insurance

 
Consider the alternative options out there and talk to an adviser about how suitable they are for you. For example, other types of protection that can help with mortgage payments include income protection, critical illness cover and life insurance. If you are worried about being unable to work for health reasons, income protection can offer pay-outs for a longer period than mortgage payment protection. Critical illness cover offers a lump sum, which could be put against your mortgage. Life insurance is an option that those with dependents may consider, as it could help the inheritors of your home to pay off any remaining mortgage balance on the property.
 

Don’t let common issues trip you up

 
The end of the year is the perfect time to update your policy, and what many may not realise is that you need to do this if you have had any life changes in the past year that won’t be reflected in your current policy. Have you moved house, got a new job/promotion, had a baby or tied the knot? Has anything changed concerning the property itself, such as an extension or solar panels? Make sure you let your protection provider know. Additionally, another common issue to be aware of is that taking a mortgage payment holiday is not the same as getting mortgage payment protection. A payment holiday means you’re deferring payments, and taking one could affect your ability to borrow in the future.
 

Evaluate the risk

 
If you’re on the fence about whether mortgage payment protection is a worthwhile option, first and foremost we’d recommend scheduling a meeting with an expert adviser to start the year off on the right foot. It’s also worthwhile taking some time to try to get a rough idea of how interest rate increases are going to impact your monthly payments, how you can budget for increases, and whether you may need extra help, be it from savings, your bank, or liquidating other assets. With the right preparation and planning, you can take the necessary steps to recession-proof your mortgage.