SPOTLIGHT:

Can I get a mortgage with CF?

The Independent Living report published by CFI in 2018 showed the Irish CF population are increasingly living more independent lives. In 1998 74% of people with CF lived with their parents in their parents' home. By 2017 that had reduced to just 43%, showing that more and more people with CF were moving away from home and establishing independent lives.

There are over 1,400 people with CF in Ireland and as of end of 2019, 54% of the Irish CF population were adults - see CFRI 2019 Annual Report.

The increasing number of adults with cystic fibrosis presents new challenges for the Irish CF population as a collective group. Previously these challenges were limited to just a few individual experiences.

One of the most pressing issues for adults with CF is suitable accommodation when they do leave their parents' home. The options fall into 3 broad strands - private rental, private ownership or local authority housing.

Since many adults with CF are well educated with qualifications (as seen in the CFI Independent Living Report 2018), many enter the workforce either part-time or full-time. As a result, many are ineligible for local authority housing based upon means testing.

The private rental sector is tough for anyone, but especially for a person with CF. Sharing your living space with others in shared accommodations and managing your CF with all its demands and impacts on your health is a very difficult experience for many. This was before COVID-19 arrived on the scene. Now with the global pandemic, many people with CF have been forced to give up their independence and move back with their parents due to the infection risk of COVID-19 by sharing accommodation with others who they could not guarantee would follow public health restrictions and public health advice around preventing the spread of COVID-19.

Independent living is an ambition that many PWCF strive to achieve. Many PWCF find themselves living at the parental home longer than anticipated due to the chronic shortage of housing stock, rental units and excessively high housing prices and cost of renting. Independent living isn’t necessarily living separately to your parents however - you can live independently without moving out of your parental home where circumstances facilitate your independence to manage your own finances and lifestyle choices. Many PWCF may choose to continue to live in the parental home with all the care and love that is provided. Indeed many PWCF living in the parental home may find the carer role reverses where they become the carer for their elderly or infirm parents. Each person with CF will have their own concept of what independent living means for them and that can change as they progress through life. Adult PWCF living at home with their parents or family members can often feel cramped, both physically in terms of space but also mentally. This is especially the case for those who have had to give up their independent living arrangement to move back to their family home because of COVID-19 risk, financial circumstances or changing health circumstances.

It is of no surprise really then that the volume of queries CFI receives on a weekly basis asking about mortgages and mortgage protection insurance has increased dramatically since the onset of the COVID-19 pandemic. These queries had already begun to increase in frequency in the last 3-5-year period even prior to COVID-19, reflecting the increasing health and survival of the Irish CF population and their natural aspirations to live independent lives.

The frequent questions presented to CFI are “How can I get a mortgage?” and “Can I get mortgage protection insurance?” In short the answer is yes, you can get a mortgage but, no, most likely you will be unable to get mortgage protection insurance due to your CF.

So, what’s the problem?

In Ireland it is a legal requirement when taking out a mortgage that you must also take out mortgage protection insurance. This insurance is tied to your mortgage loan. If your mortgage loan is a 20-year loan you must take out a 20-year mortgage protection insurance policy.

There are numerous types of mortgage protection insurance products. However, CFI are not aware of anyone with CF in Ireland who has been successful in obtaining a mortgage protection insurance policy in the recent past (five years approximately) and many PWCF have approached us in CFI complaining that they were refused this insurance. We contacted Insurance Ireland about this issue and they responded that all applicants would be assessed on an individual basis upon application for mortgage protection insurance.

But there is a way around the hurdle. There is a process where you can sign a waiver that exempts you to the legal requirement for mortgage protection insurance. To do so, you must prove to your bank or lender that you can not obtain mortgage protection insurance. You must have three refusals in writing to mortgage protection insurance applications by separate insurers as proof that you can’t obtain the insurance.

Your bank or lender unfortunately is not legally obliged to accept your waiver. Whether or not they proceed with your mortgage loan really depends on your holistic personal financial position and your partner’s financial position, if applying as joint applicants.

More information is available from Citizens Information - www.citizensinformation.ie/en/housing

CFI advises you seek independent financial advice from a professional financial advisor. Your bank or lender will offer you financial advice also, but it is wise to seek independent advice from a professional not employed by your bank or lender.

If you don’t know or can’t source a financial advisor, we can suggest to you Blue Chair Financial Planning - please ask to speak to Tom O’Neill. Tom has successfully helped PWCF through mortgage applications. Website: https://financialbroker.ie/broker/blue-chair-financial-planning/ Email: Tom@bluechairbroker.ie Phone: 01 558 1969

You should read up on general information on mortgages. Banks and lenders will have such information but you can also visit the Competition and Consumer Protection (CCPC) website. There is an online guide to get you started: https://www.ccpc.ie/consumers/housing/buying-home-step-by-step-guide/

A financial advisor will examine all your personal financial circumstances - your income, your household expenditure, any loan repayments such as a car loan and credit card debt and your savings and investments. They will advise how to get your finances into a good shape before you apply for a mortgage.

One product they may recommend to you is life insurance. Ironic that while PWCF seem to be refused mortgage protection insurance, they may still be offered a life insurance product by the very same insurer. The difference is a life insurance product is not tied to your mortgage. So, you may be offered a reduced term life insurance due to your CF such as a 3 year, a 5 year or maybe a 10 year product. The premium you pay will be loaded based on you having CF and could cost you a multiple of what a non-CF age-matched peer might pay. For example a €200,000 life insurance cover could cost you say €150 per month in premiums but the same product might only cost say €50 per month for a healthy peer. You need to examine what premium, if any, could you afford to pay toward a life insurance product.

A bank or lender may be prepared to continue your mortgage application without you having any life cover in place. However, having a life insurance product in place will weigh in your favour when being assessed by a bank for mortgage loan. If you can’t manage to obtain life insurance from an Irish Insurer, you can try Pulse Insurance UK – a company who can provide lifer cover policies for PWCF in Ireland. They specialise in life cover for higher risk individuals see https://www.pulse-insurance.co.uk/

Life insurance would serve as a financial assistance package to your partner or your family if you were to die during the term of the cover where otherwise they may struggle financially upon your death. It offers protection and peace of mind, but it will be expensive for you.

You should check if your employer has any policies in place such as death in benefit where a multiple of your salary is paid to your estate in the event of your death. Also check for serious illness cover, income protection and sick leave policies. All these products would be weighed in your favour by your bank or lender when assessing your mortgage application.

There are some Government schemes that offer financial assistance towards buying your home so be sure to check these out: • Rebuilding Ireland Home Loan: http://rebuildingirelandhomeloan.ie/ • Help to Buy: https://www.revenue.ie/en/property/help-to-buy-incentive/index.aspx

If your home or intended property needs some refurbishment be sure to check out energy improvement grants from Sustainable Energy Ireland that you could avail of in parallel with your planned refurbishment https://www.seai.ie/grants/

Properties with higher BER energy ratings may qualify for lower interest “green” mortgage rates. These could save you money in the long term and might justify the costs to upgrade your property and ultimately offer you cheaper energy bills and a warmer home. As an example, at time of writing, AIB offers a 2.1% green 5-year fixed rate mortgage product for properties from A1 to B3 energy-rated homes.

If you have obtained mortgage protection insurance in the recent past we would really love if you could let us know your insurance provider.

If you have any further questions on mortgages please contact us here in CF Ireland. Email Info@cfireland.ie or phone 01 496 2433. You can also speak to Rory directly on 087 932 3930 or email rtallon@cfireland.ie

With rising property prices and reduced housing stock, the market is like surviving the Hunger Games! May the odds ever be in your favour. Happy house hunting!

My Mortgage Experience so Far

Recently, a person with CF secured mortgage approval as a sole applicant. This is the first instance that CFI is aware of where a sole PWCF was successful in securing mortgage approval and is a huge step forward for people with CF living independently. The individual has chosen to remain anonymous, but below is their experience of the mortgage process.

As a 38 year old single applicant for a mortgage, I knew that having CF was going to make it more complicated than normal. In fact, up until last year my understanding was that it would not be possible to get a mortgage as a person with CF due to the difficulty in getting mortgage protection. However, this was based on what I heard of other people's experiences as I had not personally applied.

In March last year due to Covid, I moved out of the houseshare I was in and back to my family home. This was something of a catalyst for me and made me realise I needed to take some steps to proactively get out of the cycle of renting that I have been in since I was 18. It was around this time that I decided to take the first steps in applying for a mortgage to ‘test the process’ and see for myself if I was going to be refused.

I began by applying for a mortgage directly from the bank in the normal way. I had phoned a few brokers also around this time but none of them were keen to take on a single person with CF in the middle of a pandemic! I spoke to the mortgage advisor in the bank and she did not seem phased by my situation. She explained that if I could not get mortgage protection, I could apply for a mortgage protection waiver. I was dubious and felt that she was being overly optimistic on my behalf or didn’t really know her job, but I continued with the process. In my favour, I have a permanent job in an area that was not affected by COVID-19 so the initial stage of my mortgage approval went through quickly and without any issues. However, as mortgage protection does not come into it at this stage, it is not until you actually go sale agreed on a property and start the process of confirming the mortgage that the issues become apparent.

Shortly before Christmas, I went sale agreed on a property and contacted the bank to let them know. At this point, I was asked to secure mortgage protection which I attempted to do. None of the companies who I contacted were prepared to provide mortgage protection once I had completed the medical questionnaire. The bank requested two mortgage protection refusals which I provided and at this point the process of requesting the mortgage protection waiver began. The waiver was granted within a few weeks and once I was prepared to sign the waiver, I could go ahead with the mortgage. I know that buying a property without mortgage protection would not be palatable for many people but for me, in my situation, I was very happy to go ahead. Mortgage protection means that the mortgage will be paid off in the event of your death and to be blunt about it, my main priority is to have a home to live in while I am alive and I’m really not that worried what happens the house in the event of my death!! I know that if anything happens to me the house will be sold and the mortgage will be paid off so there will be no negative impact for anyone (I realise that for people who have partners and families, they are in a different situation in this regard). Once the mortgage protection waiver was in place, the bank issued the mortgage contract with the waiver to sign and I was good to go. Unfortunately, it is important to point out that I am not writing this from my new home as there were a few further challenges ahead in the house buying process.

As anyone who has tried to buy a property knows, it is rarely a smooth road, even when you don’t have an underlying health condition, and this was also the case for me. When I completed the pre-purchase survey, I realised that there was a lot of work that needed to be done to the house which wasn’t evident initially, so I made the decision to pull out from the purchase. So for me the search continues, but I feel more confident going forward that I can now access a mortgage. If nothing else the experience has allowed me to test the process for myself and search daft.ie knowing that it is possible!! Given the outcome, I may be sharing this story prematurely, but hopefully my experience will be helpful for someone else in a similar situation.