If you are living with a chronic illness, the process of getting a mortgage can be challenging but definitely not impossible. Affordability is the most important consideration and you shouldn’t be penalized purely because you live with a chronic condition, however, you may find you have to budget carefully and work around your job and also consider things like the growing costs of living with a chronic condition; such as healthcare deductibles. First, let’s consider the benefits of a mortgage.
The benefits of having a mortgage are not limited to flashy homes. Having this type of loan will help you build up your credit score and if you want to be proactive in managing your finances rather than renting, then a mortgage is often the way to go!
Buying a house is the most important purchase that most people make in their lives. It typically becomes the family’s single largest investment and generates some of the highest rates of profit as well as offering security. However, homeownership is not without risks and responsibilities, which is why it’s important to prepare for them beforehand.
Whilst mortgage loans can be used by buyers who can’t afford the entire cost of buying their home in cash (known as an all-cash transaction, they are also used for refinancing purposes, where one seeks funds to pay off existing debts on their property or to take advantage of lower interest rates.
1. Financial Education is important
Financial literacy is key for those living with chronic illnesses. Firstly, understanding the interest rates and payments around mortgages is key to ensure you can afford it. Use mortgage calculators to help you navigate the estimated deposit and monthly repayments to ensure you can afford it; as well as versing yourself in thing like interest rates, different mortgage types and mortgage overpayments.
2. Work with a mortgage broker
Having a chronic condition shouldn’t hamper your chances of getting a mortgage -after all millions and millions of us live with disabilities; hidden and visible. It may make other forms of mortgage protection-such as life insurance, critical illness cover-more expensive but that’s when working with a mortgage broker can help you figure out what financial products you actually need. This is especially important if you have a long-term condition that may be exempt from life insurance or illness protection.
3. Budgetting can help
After using a mortgage calculator to figure out your payments, you might also want to budget your daily expenses to start saving for a deposit. Budgeting with a chronic condition can be hard; since our lives and earnings are unpredictable. Why not check out our meal planning blog post which is all about making speedy healthy meals when you’re low on spoons, instead of getting takeout. Can you consider some more sustainable swaps-such as making your own lunch and coffee at home; using reusable wipes instead of buying disposable ones and making your own natural cleaning products? All can help save money.
4. Consider a guarantor
Another way to get a mortgage with a chronic illness is to consider using a guarantor. A guarantor essentially acts as protection if mortgage payments aren’t made since it then defaults to them. If you’re worried about getting a mortgage due to a reduced income or working part-time around your condition, this could be worth considering.
5. Start saving now
Even if you don’t plan to get a mortgage this year or even the following one, start saving now. Saving a small % of your deposit can be much more cost effective than having to suddenly find a huge deposit in a short amount of time.