Mortgage protection - when to take it

Silviath

Hello,
just wondering if someone can give us some advice on the following.
My fiancee and myself are trying to buy our first house. We agreed on the price with the seller, engaged the solicitor and are in touch with the bank regarding the mortgage. Basically, at this stage we are just waiting for the offer letter from the bank.
When is the best time to take the mortgage protection and home insurance? We are worried to take insurance now as we are not even the owners of the house.
Any advice is very appreciated.

athtrasna

Moved from A&P

Lycoge

Both need to be in place before the bank will allow you to draw down the funds.

For home insurance you will need the reinstatement value of the house which you will get from your valuation survey. There are also websites that will calculate it for you (Google reinstatement value). Home insurance can be set up very quickly with one phonecall. You will need to send the policy to the bank before drawdown. We went with BOI home insurance for this year as we got the mortgage with BOI and the insurance dept and mortgage department could communicate between themselves, saving us the need to forward on the policy details to the bank. We can always switch to a lower quote home insurance next year. We set up our home insurance 2 weeks before drawdown.

Life cover can take longer to get set up (depending on whether the company wants to discuss anything with your GP / consultant for any pre existing conditions.) I'd suggest starting to look around for quotes for that 1 or 2 months before closing. In our case we provisionally set up the cover end of September and got back in touch with them end of October 3 weeks before drawdown to start the policy. Our solicitor had advised us to get life cover sorted early enough as that is one aspect that can delay drawdown if it's not in place. It's also worth shopping around for life cover quotes to try find the best deal.

Best of luck

Silviath

Thank you very much, Lycoge, for your detailed advice. It really helps us a lot.

PaulM1977

Get your mortgage protection in place, but not in force as soon as you can, in case there are any medical issues or additional information that may delay obtaining acceptance from the life assurance company.
Once you are ready to draw down your mortgage, you can have the life assurance company issue the policy which can be sent to the lender.
If you are dealing with a broker for your mortgage, they should be able to get the best price for you in the market. If it is through a bank they may not be able to research the market for you, so seek independent advice in this regard.

For your home insurance, this can be done in the weeks prior to drawing down your mortgage, Blue Insurance have a good deal if you take out a 2 year policy with them, they are still competitive compared to the open market too.

Thanks,

PaulM

Silviath

Thank you very much for your advice, really appreciate it.