Ask most mortgage brokers what’s the best part of their job and they’ll say “helping someone buy their dream home”. Our role is especially important these days and we will literally jump through hoops to prove affordability and regular income to secure a mortgage offer.
Why then is it that we rarely take as much trouble to ensure our clients can maintain their income throughout the mortgage term?
Life cover is taken for granted and even critical-illness cover is more widely sold; yet a recent defaqto survey states we are 15 times more likely to suffer incapacity than die during our working life. The same survey says 74 per cent of employers offer no income protection, so how will our clients cope if they are unable to work? How will they pay the mortgage or keep up the life cover and critical illness payments?
McMillan Cancer Research says 57 per cent of cancer survivors had to give up work or change roles, and one in 16 loses their home as a result. As cancer claims on IP policies are relatively low in comparison to musculoskeletal and depression cases this figure is a small proportion of overall losses.
We all know IP is undersold, but the question is, why? The Defaqto survey stated the most common reasons as affordability, cost of cover and client apathy.
As mortgage professionals, we have a duty to ensure our clients understand the consequences of losing their income, the likelihood of it happening and the solutions available. The state provides little and in reality is unable to afford more, so it must come down to our clients to provide for themselves to some extent. We must talk to them about putting something in place to reduce the risk; cover is available to fit most situations and budgets if we just do the research.
If we get them into their dream home please let’s work harder to make sure they keep it, especially when times get tough.