Blog – McCarthy & Associates – Galway Talks, 12/02/2015

financial health checkIssue: Financial Health Check is as important as going for a medical!!
Comment: We all know the importance of looking after our health and maybe occasionally getting a check up. Getting a financial health check is equally important to determine whether or not your financers are structured efficiently.
There are ‘milestones’ throughout our lives when something like this is absolutely necessary, e.g. when you buy your first house and at the other end of the scale before you retire. There will be many events in between when a review your finances will be necessary, due to changing circumstances.

Question: I want to help my daughter out to buy a new house however she doesn’t have a sufficient deposit. Is it a good idea for me to borrow for her?
Answer: With the changes in deposit qualification for mortgages, I am concerned that parents could find themselves under pressure to assist their children. If your financial situation, as a parent, is such that giving a deposit to your daughter will not impede on your finances, then it is obviously well within your means to do so.
However if assisting them could cause a financial issue for you at some stage in the future by borrowing on their behalf, then it is something you need to think long and hard about. It is a natural desire for people to want to help their children to get on the property ladder, but doing so at a cost to your financial position, is something you should be wary of.

Issue: Credit Unions may offer mortgages?
Comment: Recent press reports indicated that the credit union movement is looking at the possibility of offering mortgages. Whether or not this ever comes to pass will be dependent on quite a number of regulatory issues and also the financial strength of the credit union movement.
We have seen, throughout the downturn, a number of credit unions experiencing severe financial difficulty due to the quality of their lending. The trend, over the coming years will be the introduction of “super credit unions”, as mergers happen within the sector.
Stronger credit unions who offer a greater choice of services to their clients (including mortgages) would be a welcome challenge to the main banks.

Question: I have heard you mention a number of times that you should get the cost of a life policy reviewed. If I do this am I likely to make savings?
Answer: It certainly is worth your while to review the premiums. Making any savings will be dependent on a number of factors incl. health issues and your age.
Certain premiums have reduced considerably in recent years but you might be a lot older now than when you took out the policy. I would not discourage you from shopping around and as I have said, depending on your circumstances you could make reasonable savings with a new policy.