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Mortgage insurance questions

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  • 07-12-2006 7:09pm
    #1
    Our man in Havana
    Closed Accounts Posts: 29,476 ✭✭✭✭


    I have got a 150k mortgage which I sign for tomorrow. The house is valued at 300k. We have taken out a mortgage protection policy for 160k and buildings insurance for 150k which is the cost of rebuilding the house etc.

    We think the mortgage broker is trying to scare us by saying the mortgage protection policy is not enough and needs to be increased in value.

    Will the solicitor explain this to us or is this just an attempt to generate commission on insurance products.

    Any advice would be appreciated.

    Regards
    007


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    #2
    EKRIUQ
    Registered Users Posts: 4,386 ✭✭✭EKRIUQ


    When you get a mortgage from a bank or building society, there is a requirement that you take out a mortgage protection policy to ensure that the mortgage is fully repaid even if you die. This is simply a special type of life assurance taken out for the term of the mortgage and designed to pay it off on the death of the owner or joint owner.

    It is very important to review your mortgage protection policy on a five-year basis and ensure that additional cover is taken out, if necessary, to cover extensions of the term of the mortgage, penalties incurred, etc. Premiums must be kept up to date - if you go into arrears, the policy may lapse. Mortgage protection should be payable on a joint life, first death basis. This means that the mortgage will be repaid on the death of the first partner (if a couple is involved).

    By mortgage protection do you mean life assurance and if it is €160,000 does seem like your cutting it a bit fine it won't really cost that much more to go another €30,000-€50,000 and if (touch wood) anything did happen it would be worth it.

    Tipptop


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    #3
    Our man in Havana
    Closed Accounts Posts: 29,476 ✭✭✭✭Our man in Havana


    But 160K will do them?


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    #4
    EKRIUQ
    Registered Users Posts: 4,386 ✭✭✭EKRIUQ


    As far as the banks are concerned YES!


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    #5
    jconn
    Registered Users Posts: 64 ✭✭jconn


    I am taking out a mortgage for building a house and aswell as the mortgage protection insurance the bank is looking for 'homes in the course of construction' cover. They have said that the builder may have this but if not then I need to get it. Any idea who does this type of insurance and how much it costs?

    Also what other insurance cover if any do I need, as I said it is a building contractor who is doing all the work?

    thanks...


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    #6
    delly
    Moderators, Home & Garden Moderators, Recreation & Hobbies Moderators Posts: 7,681 Mod ✭✭✭✭delly


    jconn wrote:
    'homes in the course of construction'
    Never heard of that one myself tbh.

    From my experience the following are the usual insurances needed.
    Life insurance which covers the value of the mortgage in case of death. I.E house is bought for €500,000 and you put up €50,000 then the policy must be for €450,000. It can be set to decrease inline with your mortgage.Compulsory

    Accelerated illness cover is an option you can get with your life insurance whereby if you get sick among a list of 20 or so serious illnesses then they will pay out part of your life insurance policy before you die.Optional

    Mortgage payment protection is a policy which will pay your mortgage for a set period of time if you become redundant or can't work due to illness.Optional

    Buildings insurance cover covers the cost of rebuilding your house if it blows up or goes on fire. This is usually less than the market value of the house as it is not going to cost the same to rebuild. There are regular reports of how much it costs to rebuild in certain areas of certain types of houses. It is important not to under insure the rebuild cost.Compulsory

    House contents cover covers the contents within the house. I'm not sure whether stuff like kitchen or bathroom fittings are covered in this or in the buildings cover.Optional I think, but I don't think anybody would not take it

    This is all my personal perceptions and I could be wrong, so you should really seek the advice of a professional.


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    #7
    Our man in Havana
    Closed Accounts Posts: 29,476 ✭✭✭✭Our man in Havana


    The life insurance element can be waived by the lender in cases where a person cannot obtain cover.


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    #8
    ircoha
    Closed Accounts Posts: 2,290 ✭✭✭ircoha


    jconn wrote:
    I am taking out a mortgage for building a house and aswell as the mortgage protection insurance the bank is looking for 'homes in the course of construction' cover. They have said that the builder may have this but if not then I need to get it. Any idea who does this type of insurance and how much it costs?

    Also what other insurance cover if any do I need, as I said it is a building contractor who is doing all the work?

    thanks...

    Are u sure it is as well or prior to completion as it would seem to be designed to cover stage payments made prior to the formal mortgage because title wont pass to u till the house is finished.

    Even if the builder has it, how will the bank get 'a hold' of ur portion of the policy as the stage payments will I presume be made to u and u pass them onto the bank?

    What bank is it?


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