Builders and buyers for free insured against loss of job

Some time ago, the Flemish government introduced an “insurance guaranteed living”, with little success. The government insures loss of income eg. when disabled or loss of job. With this principle, the government wants to reduce the fear to build or buy houses.

The “insurance guaranteed living” has some limitations. There is a maximum of 500 euro per month for the first year, 400 euro per month for the second year and 300 euro per month for the third year. The insurance is restricted in time with maximum 2 terms of 18 months. Not everyone will be taken in consideration for the insurance. Only people whose mortgage loan dates ever since 1 January 2008, can hand in their appeal.

The government will cooperate with the insurance company Ethias. They estimate about 7500 Flemish people will appeal to the insurance. The total cost for the government is about 6,5 million euro.

Real estate has risen enormously in value this preceding period. The decision to buy or renovate property has become more arduous these days than before the financial crisis. The financial crisis has harmed the confidence of people in the economy.

In my opinion real estate as an investment is still a good choice. But people are more reticent about buying a property. Not only because of the enormous costs but also of the big risk. Current prospects show that the value of property will continue to rise.

Fact is that the interest rates fluctuate all the time. Two problems can occur :

• There is a chance that a person subscribes a mortgage loan at a certain interest rate and sometime later, the interest rate is lower.
• A person has subscribed a mortgage loan with variable interest rates depending on the evolution of the market.

In these uncertain days, candidate builders and buyers need an encouragement. The government lends these candidates some support. The financial crisis has already made a lot of victims. People get fired, companies go bankrupt and thousands of people lose their jobs ... I think that the “insurance guaranteed living” is a fantastic idea. It gives people hope and it reduces the risk that when there is a loss of income their house would be confiscated. It is a pity though that it is only for people who have their mortgage loan dating since 1 January 2008. It seems that other people, who got their loan before 1 January 2008 and still paying off their debts, are neglected.

Sofie De Cooman

Source: http://www.standaard.be/Artikel/Detail.aspx?artikelId=5726REHH&word=verzekering