Buying a House with Health Condition

TBagpuss

regarding benefits: If you are claiming benefits such as JSA or Universal Credit, how you spendthe money is up to you. However, if you are claiming specifically for help wuith housing costs they you either cliam Housing BEnefit (if you are renting) Or Mortgage Interest Benefit (if you have a mortgage) Mortgag eInterest Benefit is supposed to cover the cost of the interest on the mortgage but not the capital, however, it is paid based on everage interest costs so depending on what your actual mortgage interest rate is you may get more, or less, than is needed to cover your mortgage interest.

many mortgages allow you make overpayments - for instnace with NAtionwide, you can generally overpay by up to 10% per year without penalty even if you are on a fixed deal, and in most cases once you are out of any fix you can overpay as much as you want / can afford.

If you have made overpayments on a motgage that would not, I think, count as savings for the pusposes of claiming benefits, if you save the money elsewhere then that would count as capital for any benefits assessment.

Getting a long term mortgage and overpaying is probably the best strategy, and if you overpay the max. allowed than any extra savigns could be channelled into pensions which again ado not count as savings for benefits purposes and which can generally now be accessed at 55 if need be.

TBagpuss

Fianlly, wlthoug hyour hsuband doesn't qulify for income pritection insurance for this condition, do consier taking it out for your self, and looking into life insurance for you both.

Bex6669

TBagpuss wrote: »

If you are claiming benefits such as JSA or Universal Credit, how you spend the money is up to you.

Getting a long term mortgage and overpaying is probably the best strategy, and if you overpay the max. allowed than any extra savigns could be channelled into pensions which again ado not count as savings for benefits purposes and which can generally now be accessed at 55 if need be.

Ah hah, didn't know that about benefits - good to know thank you.

Good idea about overpaying if we can. And good info about pensions - didn't think about that. But if we need it before 55 though, might be a problem having it tied in?

TBagpuss wrote: »

Fianlly, wlthoug hyour hsuband doesn't qulify for income pritection insurance for this condition, do consier taking it out for your self, and looking into life insurance for you both.

Will definitely do this.

Bex6669

pinkteapot wrote: »

Another tip - although we didn't borrow our max, we did get what to me felt like a huge mortgage which was daunting. I relaxed about it because we bought a house in a hugely popular area. Houses where we live always sell (STC) in days. I know that if something happens - eg we lose an income and our budget can't stretch - we could sell and downsize before it became a problem. Try to buy a bog standard house, in a popular area, that will sell easily. Avoid anything really unusual with a limited market, so that if the worst comes to the worst you can simply sell up and rent or buy a cheaper property.

Thank you, all your info is very helpful This last point will help set my partner's mind at rest as a get-out-clause!

PeonySugar

Hey, we are in the same position as you. I have several medical conditions which will most likely mean I won't be able to work all my life and will be working on and off. Luckily I work in finance so I had some knowledge around this but basically:

We took out a 99k mortgage on a house we got for 110k. It is run down and we are currently doing it all up so that its value will be near 170k. So should we need to sell and move back in with parents it is not as likely to go into negative equity. Or if we needed to sell it we could buy a 100k flat and have a very small mortgage.

Secondly, take out your mortgage for the longest term possible, this means you are committed to the lowest amount possible. (Check what you're allowed to overpay though) (if you are disciplined in saving). This meant our mortgage is £300 a month. Now here is where I differ with others here, some people say overpay your mortgage as much as possible, but I prefer to just save the money into a savings account and then drip feed some of it into a 6% regular saver. This ensures that if you can't work for years, all your money hasn't gone to your mortgage because you still have other bills to pay, Aswell. If you want to, as a maximum, overpay what your interest is each month so that's not added on.

Thirdly, regularly review all your bills. Your energy consumption. Cut down on what isn't necessary, and most importantly plan ahead for things. For birthdays, presents, sign up to martins weekly email. If you plan plan plan everything should be okay.

pinkteapot

Bex6669 wrote: »

Thank you, all your info is very helpful This last point will help set my partner's mind at rest as a get-out-clause!

I've only skim-read the rest of the replies, so might have got the wrong end of the stick, but I think you're considering shared ownership?

In terms of ease of re-sale, be aware that shared ownership can be trickier to sell than a 'standard' house, so if you can afford a non-SO house then do try to (even if that means a smaller property). Same goes for new-build. If there's any risk you might have to sell within five years, avoid new build (unless prices are shooting up in your area, you can lose money on them as there's a premium for buying brand new).

dc197

As others have said: don't commit yourself too much now (e.g. buy a modest house with a modest mortgage), agree to small minimum mortgage repayments (e.g. take a longer mortgage with lower monthly minimum payments), and make hay while the sun shines (i.e. while you are both fit, over-pay as much off as you can as soon as possible).

Committing to a small amount while actually over-paying off a large amount will give you the safety net of not being over-committed if your partner cannot work, and achieve the goal of reducing your debt as fast as possible until that day.

Bex6669

Thanks everyone. Thinking about it I think we would only be able to afford overpaying if we had a shared ownership - but will have a think as I know some of you have said to avoid shared ownership.
I would also only be able to pay the full mortgage payments on one income if it was shared ownership as well.

We only currently only pay £400 a month in rent total so are used to very low costs (we live on a Housing Cooperative). We live in Milton Keynes so we'd be jumping to around double that per month in mortgage payments if we bough a small house (£170k ish, minus 10% deposit). So it's already going to be a big increase on our outgoings.

I wish house prices weren't so high!!

dc197

I live in MK too. Prices are very high and still rising.
Maybe consider somewhere cheaper nearby, like Northampton, Luton, Dunstable or Bedford?

AdrianC

Bex6669 wrote: »

I wish house prices weren't so high!!

If only people didn't insist on owning them, that might happen...

Seriously, you've got to consider the lender's position. They lend you a lot of money. Your other half's illness becomes worse, and he needs to give up working. Your income's halved, and your expenses have gone up. There's no insurance that'll cover the gap. Can you still afford it?