Friday, 15 May 2020

Managing your Finances during Lockdown

Photo by Sharon McCutcheon on Unsplash

We are now into 6 weeks of lock down and most people are seriously thinking about their finances. Whether you have a business or a job or are self employed, money is tight and our incomes have reduced so what can we do about it?

  1. Make a spread sheet logging all incoming money and another one for expenditure such as bills, mortgage, food, bills, car, insurance,medical fees, phone contracts and home maintenance.
  2. Look at ways you can reduce some of these costs, like looking for better deals for car/ home insurance, phone contracts and internet and energy providers.
  3. Make meal plans and shop only for necessary items.
  4. Talk to your bank for interest free loans, and over draft facilities.
  5. If you are renting see if your landlord will give you a planned holiday or let you pay in smaller installments.
  6. Check your mortgage and speak to your bank if you can change it or move it to a different type. There may be a few different options that you can opt for such as a reverse mortgage.

Photo by Tierra Mallorca on Unsplash

Everyone dreams about a comfortable life especially in retirement, but if financial problems are a more immediate reality, where do you turn? A reverse home loan is a viable solution for those who are 62 of age or above, and in need of a financial boost. 

How does a reverse mortgage work?

One of Two Ways
A reverse mortgage provided via a government program is called a home equity conversion mortgage, but if it is supplied by a private lender, it is known as a reverse mortgage. Both are subject to certain government regulations, which your lender will assist you with.

Reverse or straightforward home loans?
The main consideration is the loan term. A regular mortgage requires you to pay back the loan monthly for a predetermined period. This regular commitment can be stressful to honor, especially if funding becomes a problem.

A reverse mortgage, on the other hand, allows you to borrow without having to start the repayment process straight away. It removes the need for regular monthly payments, and you will not be bound to any loan period. You will not need to repay anything until you ever decide to move out of the home the loan is linked to, in which case the loan balance will become payable.

What Are The Qualification Criteria For A Reverse Mortgage?
The steps are simple, but the conditions are strict. Other than being 62 years of age or older, the conditions stipulate that you need to own and permanently reside in the house against which you take out the loan. The lending institution where you apply is liable for working out your capability for taking out the loan. This means that they will do a background and credit check, to see if you can afford regular maintenance costs and property taxes, insurance coverage, and other running costs pertaining to home ownership.

There are also conditions linked to the actual house. It has to be a main and permanent residence, and the person applying for the reverse loan has to be the owner. If it is a multiple-residence property, at least one of the homes or apartments must be the permanent residence of the person applying for the loan. Finally, the value of the house must be high enough to be able to cover the full repayment value of the loan upon sale of the property. Remember that the outstanding balance on an existing home loan will have to be settled with funds from the reverse home loan, before funds from the reverse loan become available for use.

Life With A Reverse Mortgage
Your lender can make the money in your loan available to you in monthly payments, which are useful for covering ongoing bills during retirement. If you qualify, you can get your reverse mortgage money any way you want. The other option is to make it available as a lump sum, to help you cover costs in the case of a major expense, such hospitalization, or you could organize a line of credit, to access it as you need.

 **collaborative post.


  1. Lockdown really has had me keeping a closer eye on my finances. I am grateful for the Government self employed income support scheme which will hopefully keep me steady for now

  2. Great tips, thanks for sharing! I have to admit I was worried when lockdown happened and my husband was furloughed on 80% pay! Luckily I have managed to continue working as he is home to help with the kids so I have been able to do a bit of work. We were very lucky our landlady agreed to lower our rent slightly too so that helped massively!

    I do think its fab though how many companies are offering help and payment holidays etc right now to help out as I definitely think it will relieve some of the pressure off of people.

  3. I'm trying to shop for necessary items only. It's so much easier now as I shop with a list and walk fast to minimise time as the queues take ages. Great post, it's important to save as much as possible with everything that s happening.

  4. Finances are a difficult topic for many at the moment. Let's hope the economy recovers quicker than predicted so that people don't have to take out more loans

  5. I'm sure everyone's finances have been affected in one way or another during all of this. I'd not heard of a reverse mortgage before, sounds like a great option for some people.

  6. Having more time at home gives us the chance to consider our finances so I enjoyed reading this. Useful information- many thanks!

  7. Some great tips here I’ve never heard of a reverse mortgage loan this could be a viable option for some people

  8. These are great tips, we have done the spreadsheets and changed/cancelled some of our subscription plans. At the moment we are holding on to our money and spending wisely. We need to look at your advice on reverse mortgage next.

  9. Now is the time to get smart with money for sure. There is some good advice here for mortgage owners x

  10. Very helpful tips for managing your finances during these uncertain times. I've been writing down everything going in and coming out to keep track

  11. These are great ideas for how to manage your finances during lock down. We have created a pretty strict budget to ensure we can manage to make all payments and not end up struggling. Laura | Tales of a Natural Spoonie

  12. We have managed to get a mortgage break and reduce some of our outgoings. The kids not going to their clubs has really helped too as that is a huge expense each month

  13. Now that those restrictions are easing how are you coping with lockdown? Are you ready to revert back to 'normal' or do you need a little time to decide what you want, to readjust and regain your trust in the outside world? Lockdown tips


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