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Personal finance the positive way: Part I
HIV positive status is no bar to home ownership, but hasty decisions could cost you dear, argues finance expert Ivan Massow
Mortgages are complicated and stressful enough without the fear of being declined. Fear meant many HIV positive people were left out of the recent property boom. But whoever started the rumours that HIV status affects your ability to get a mortgage was sadly misinformed. That said, the fact remains many HIV positive people can face huge problems when obtaining finance.
Problems usually start when people with HIV, as well as those who are negative but gay, insist on waltzing into high street lenders expecting equitable and enlightened treatment. In these circumstances, even gay men who have tested negative are still having premiums hiked because, theoretically, they might, one day, contract HIV. People with HIV can give their average high street advisers a coronary. Many people living with HIV are sensibly put off from this course of action by the prospect of having to discuss their current situation with a bank or building society representative, just in case the conversation gets around to insurance. Banks and mainstream financial services companies still freak when they hear the words HIV. This information may be passed accidentally to other departments and sometimes distributed deliberately. I¹ve seen these situations escalate.
Mortgage forms do not usually ask you about your health (unless there are protection policies built in). But insurance forms are usually produced at the same meeting and these do ask the question. The mortgage adviser will also often produce a 'fact finder' form which also asks about health. The simple way of halting this process without letting anyone know is to say firmly that you want to shop around. Alternatively, be more upfront and say you cannot obtain life assurance due to 'health reasons' but do not want to be more specific. Whatever happens, don't lie on the application form. The idea is to stay in control of the situation from the outset and to do this avoid being asked these questions formally.
Luckily, recent reforms mean your mortgage loan and your life cover do not have to be taken from the same provider and you are not obliged to justify your decision to go elsewhere (or nowhere). Endowments do have mandatory life cover so are usually not an option for people living with HIV. This usually leads to most people considering a repayment mortgage. In some instances, however, I would encourage people to look at ISA and pension mortgages.
A handful of lenders still insist on you seeing their in-house advisers for protection products. As these insurance policies are dependent on being HIV negative this could affect your chance of obtaining a mortgage. The key is to see an adviser or mortgage broker who should know who these insurance-pushers are and lead you elsewhere. Be careful though, as some advisers only make money from the commission earned for life assurance and they may not be so happy to help. In this case, either seek specialist advice or suggest working on a fee basis to ensure the best possible advice. It¹s worth paying for.
Avoid questions about health and life insurance by saying firmly you want to shop around.The other major problem facing HIV positive people is affordability. Some individuals may only work part-time and be reliant on benefits to some extent. Some lenders will take into consideration benefits if accompanied by another source of income, so it is worth shopping around as the maximum you can borrow can vary widely from one lender to the other. Credit problems are also common, perhaps due to some time off work or a mad moment with the credit cards. Either way, there are many good lenders out there who lend to people with damaged credit records. These are not backstreet boys with ridiculous interest rates. In fact, many high street lenders have credit repair products which put you at level pegging with an average risk client within a couple of years. Again, don't just call some poor credit lender you saw advertised on QVC. You need a specialist.
Many people don't even get as far as the lender because they fear the long term financial commitment. Instead of missing out on the security of owning your own home and any increase in property prices, explore all the options if things go wrong. Most lenders let you take a payment holiday for up to a year or you could rent out a room. While rates are low, it would be wiser still to consider making a monthly contribution to an ISA just in case problems arise in the future, even if you just save enough to cover one year¹s payments.
If things really do go wrong when you're paying a mortgage, the easiest way to reduce payments is to switch to 'interest-only' for a time and you might even be entitled to help from the government. There are often both short and long term solutions to ensure people living with HIV have the same choices of buying or renting as any one else.
Much has been made of the new life cover available to people with HIV. The problem is that it is expensive and usually only written on a year by year basis. The moment you look ill they withdraw cover. It's little more valuable than accidental death cover and proper accidental death cover can be purchased for a lot less cash. In reality, the cover aimed at people with HIV is, at best, well intentioned which is why we are very reluctant to allow our clients to take it out. On the whole, most people would be mad to buy it. The best advice is to seek advice from a good independent adviser or mortgage broker who should point out these pitfalls and identify the best possible mortgage product for you with the most competitive rate. Happy house hunting.
Author Ivan Massow is an independent financial
advisor who runs the Ivan Massow Group.Ivan Massow [ivan@massow.co.uk]
visit www.massow.co.uk
