Mortgage Protection

keaves

Hi all

Hopefully moving soon but am getting conflicting information from my bank, broker and solicitor regarding mortgage protection.

I have mortgage protection on my current house and am going to use it on the new house as the amount remaining is sufficient.

But who looks after this? How do I move it? Bank is saying broker, broker is saying solicitor and solicitor is saying it's nothing to do with them!

I'm afraid I will get to closing and the new mortgage provider won't accept my current policy and just want to be on top of it.

Any advice would be appreciated

micar

What exactly are you doing.

Selling 1 house and buying another?

If that's the case, your current lender woud release their interest in the mortgage protection policy. The new lender will the submit a notice of assignment

athlone573

Have you priced up a new policy and letting the other one lapse? It would save a bit of hassle and it might work out much the same price or cheaper.

Otherwise I'm not sure on the process for reassigning the policy.

keaves

micar wrote: »

What exactly are you doing.

Selling 1 house and buying another?

If that's the case, your current lender woud release their interest in the mortgage protection policy. The new lender will the submit a notice of assignment

Yes selling one house, buying another.

So do I have to do anything or should my solicitor or broker look after this? Or does the new lender submit a notice of interest to my mortgage protection provider themselves?

micar

keaves wrote: »

Yes selling one house, buying another.

So do I have to do anything or should my solicitor or broker look after this? Or does the new lender submit a notice of interest to my mortgage protection provider themselves?

Once you house is sold and the mortgage is cleared, ask the lender to send in "a letter of no further interest" into the company with who you have your mortgage protection policy with.

Tell the new lender that you want the mortgage protection policy to be assigned to them.

Leprechaun77

Surely the new lender will not release the funds to clear the ‘old’ mortgage without having a policy in their possession to assign?

keaves

micar wrote: »

Once you house is sold and the mortgage is cleared, ask the lender to send in "a letter of no further interest" into the company with who you have your mortgage protection policy with.

Tell the new lender that you want the mortgage protection policy to be assigned to them.

Thank you so much micar.

I guess I'm worried that the new mortgage provider will want it in place before draw down. And if I have the interest released one day and want to draw down the next will there be enough time to sort this but it must happen all the time and be ok!

Sarn

You need to ask your new mortgage provider what they require. The policy will have to be reassigned to the new lender, usually you need to know the drawdown date and give that to the policy provider so that they can reassign it at the right time. You’ll have to give the policy people a call and they will be able to advise.

They new lender usually requires a commitment that the Original Policy Schedule will be provided once released from current lender. The current lender generally won’t release the original until the mortgage is cleared. This is what KBC needed.

In the absence of the original policy a copy of the original life policy and an up to date benefit statement for the life policy is usually needed.

The term of the life policy also has to cover the period of the new mortgage.

Dav010

Leprechaun77 wrote: »

Surely the new lender will not release the funds to clear the ‘old’ mortgage without having a policy in their possession to assign?

Op is selling, the buyers funds clear the mortgage on that property, not the new lender.

micar

Sarn wrote: »

You need to ask your new mortgage provider what they require. The policy will have to be reassigned to the new lender.

They usually require a commitment that the Original Policy Schedule will be provided once released from current lender. The current lender generally won’t release the original until the mortgage is cleared.

In the absence of the original policy a copy of the original life policy and an up to date benefit statement for the life policy is usually needed.

The term of the life policy also has to cover the period of the new mortgage.

Lender are not really bothered who has the original policy schedule anymore

I am in the process of switching my mortgage .....second time to do it.

BOI to EBS and now EBS to AIB.

I still have my original mortgage protection with BOI n place.

All AIB wanted was a letter from BOI saying what the current life cover amount is, the ceassation date and that the policy is in force and paid to date.

The term of the mortgage with AIB is less than the remaining term of the mortgage protection policy.

The converse would be an issue for the lender though.

Leprechaun77

Dav010 wrote: »

Op is selling, the buyers funds clear the mortgage on that property, not the new lender.

Yes, that makes sense alright. What I can see being messy is the time it will take for the old lender to release their assignment on the policy. If the OP trying to buy/sell on the same day, or within a short period of redeeming the old mortgage, I wouldn’t fancy being reliant on the old bank doing this efficiently in the current climate. I am aware of a friend who had a similar issue last year and Ulster Bank were an absolute nightmare in this regard....they ended up just getting a new policy to save the hassle.

ted1

keaves wrote: »

Yes selling one house, buying another.

So do I have to do anything or should my solicitor or broker look after this? Or does the new lender submit a notice of interest to my mortgage protection provider themselves?

You’re a big boy now. Look after it yourself it’s a good opportunity to shop around.

Sarn

micar wrote: »

Lender are not really bothered who has the original policy schedule anymore

I am in the process of switching my mortgage .....second time to do it.

BOI to EBS and now EBS to AIB.

I still have my original mortgage protection with BOI n place.

All AIB wanted was a letter from BOI saying what the current life cover amount is, the ceassation date and that the policy is in force and paid to date.

It depends on who you’re moving to and why the OP needs to ask the new lender what they want. What I listed are the requirements of KBC as of last year.

I agree that I don’t see the need for the original policy. Once all the other information is provided, conditions are met, and it is assigned to the new lender that should be it.

keaves

ted1 wrote: »

You’re a big boy now. Look after it yourself it’s a good opportunity to shop around.

Current policy is the best price hence why Id like to hold onto it

Happy to look after it and am trying to but am getting bounced around which is why I came here looking for advice

Henry Ford III

Is the term of the old policy not too short?

keaves

Think I have it sussed!

I need the solicitor to send a letter to the new mortgage provider confirming they will send a deed of assignment once the policy has been released from my current mortgage provider!

Fingers crossed there's no issues!

keaves

@ Henry Ford III - No its only a few years into the term