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Life insurance and house insurance needed to continue mortgage?

  • 23-06-2016 10:14pm
    #1
    Nedzer01
    Registered Users Posts: 27 ✭


    Hi, I got a mortgage last year and during the process I was led to believe in order to get sanctioned for the mortgage I needed life and house insurance in place. I duly signed on the dotted line. Now after the 1 yr fixed term is up I'm going back to the std var rate. Do the bank check on my life and house insurance going forward? I'll insure the house of course but my company has some sort of life insurance policy - though maybe not the exact same level of cover as what I was sold last year. Basically is it up to yourself the level of cover you take out on your home and life - or do the bank insist on them? Thanks


Comments

  • #2
    Sono
    Registered Users, Registered Users 2 Posts: 2,427 ✭✭✭Sono


    Can I ask why you're going onto variable? The rate is considerably higher than fixed. Sorry off topic but seems a mad decision.


  • #3
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,725 Mod ✭✭✭✭Henry Ford III


    If the policies are assigned the lender will know if they aren't in force.


  • #4
    phormium
    Registered Users, Registered Users 2 Posts: 3,345 ✭✭✭phormium


    Two of your loan offer conditions that you signed on the dotted line for would have been the requirement to have your life and your house insured, you were led to believe correctly, these are requirements for all mortgages.

    It is not up to you to pick the amount, your life needs to be insured for the amount and term of the mortgage and the house needs to be insured for whatever re-building value that was put on it by the valuer.

    You can get these insurances anywhere you like, they do not have to be through the bank and they can be the most basic policies you like, you don't need any extras or frilly bits if you don't want but both of these policies are part of your mortgage agreement conditions. Your company life insurance may not be ok for your bank as they will not be able to assign it and obviously it's only valid while you work for that company.

    The life policy may be assigned to the bank in which case they have to release it if you wish to cancel it and will look for another policy as replacement before they do that.

    The bank's interest will be noted on the house insurance which means they will be notified if you cancel that as well so will also ask you for sight of a replacement policy.


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