Talking About Money Helps with the Best Mortgage Deals
3 minute read
Financial affairs are an intensely private matter, but a current TV campaign, by Lloyds Bank, is highlighting the need for people to discuss money with family and partners; it is a question of trust. It is still commonplace for some (especially older) couples to have a joint bank account, often managed by one party (usually male). In the event of their death, the other party can be left in limbo. In some cases, it can take months to unravel the state of personal finances, especially if there are unexpected debts, or unpaid mortgages.
Consequently, it is important that people take responsibility for their own finances: setting up a bank account is the first priority. Next, is working out income and expenditure, paying off credit cards in full each month for the simple reason that – at some stage – we all want to borrow a significant sum, whether for a car or, most important – for a home. That means sustaining a healthy credit score.
Buying a home is probably the biggest financial commitment for anyone, but having a reputation for debt can deter lenders, and could have an adverse impact on the terms of any deal offered. Few people are aware that, whatever their interest in politics, they should ensure they are registered on the Electoral Roll, to aid credit checks. It doesn’t mean you have to vote, if you don’t want to, although being registered does imply that an individual is a ‘responsible person’. With a high proportion of purchases made on a joint mortgage, both parties must be honest with each other about the state of their finances (including student debt) from the outset, when planning a future together. This is because a joint application means that credit histories are linked, allowing lenders to check both at the same time; should one party have a bad record, through no fault of their own, it could have implications for both.
However, once approved, it is sensible to agree a budget for joint expenses, including mortgage, energy costs, insurance and even food; it is also wise to agree an ‘emergency fund’ for the unexpected (replacing equipment or maintenance). Whilst retaining their own personal bank accounts, both parties can then agree to contribute a set amount each month to a joint account, for shared management.
When people may have more than one job, work part time or are self-employed, getting the right advice to realise your ambitions is imperative, enabling deals to be tailored to individual needs. Skilled specialist advisers can be consulted on an on-going basis, when plans develop, circumstances change, perhaps with the unplanned arrival of a baby, a partner’s illness or death, and opportunities to invest in home improvements. No-one can afford to ignore liabilities, so taking the initiative to seek help and guidance, enables solutions to be found – even at the most difficult times.