A daft question from a re-mortgaging first timer?

flakmagnet

Hi Guys,

I got my first Mortgage in 2006, our estate agent set us up with the mortgage, house insurance, Life assurance and unemployment insurance (or something to that name).

We just met with her for remortgaging since the variable is MASSIVE, fair enough, I know interest rates for that kind of thing have been high, but I digress, she asked if anything had changed regarding our circumstances and we told her that the house insurance is now with another insurer and that after having consulted our mortgage documents, decided not to continue with the unemployment as our jobs had got a lot more security to them, and the life because it was fairly expensive for our outgoing costs at the time.

When we told her this she was surprised and, though I cannot remember the exact words, essentially would like the life assurance part restarting because "most mortgage providers prefer/require it". Again, I cannot remember exactly how it was phrased if that is important, but I have since been scouting around several mortgage websites, including the one for the company we are considering remortgaging to, and cannot find anything about it being a requirement.

It is not a policy I particularly want as it is fairly expensive for two people who are young and healthy. Could someone please let me know what the circumstances are regarding this as I cannot find anything definitive on the web?

Thanks,

flakmagnet

_Andy_

It's not a requirement but have a serious think about it. Just because you're young and healthy now doesn't mean you will always be (not being morbid just realistic).
Life cover is cheaper the younger you are.

Tipustyger

it depends on your provider but it isn't necessarily a requirement. I do have life insurance now but didn't when i got a mortgage last year.

if you do need one perhaps you should look at martin's advice on this. he recommends a company called cavendish (i think) who are substantially cheaper than most sites if you're willing to pay them a commission of about £35. it might seem annoying to have to pay but the savings make it worth it and they have very good customer service in my experience.

Cazza

If one of you were to pass away, could the other afford to keep the mortgage and cover all bills on their sole income? If the answer is no, then, my opinion is that you need Life Insurance.

inca_2

Not going to dwell on the reasons for having it as it's already been said very well by people on the thread but it is highly unlikely that not having it would affect any decision to lend to you.

dimbo61

Take out level term life assurance with cavendish online ( its very cheap )
for at least the amount of mortgage you have.
Check with your employer if it provides 2/3 years life cover if you die in service !
If something happened to your other half and you were expecting a child
would you like to lose the house as well.

inca_2

Find out what the right cover is for you, if you're on repayment and take level term assurance you could be paying more than you need to be if cost is an issue for you.

Madjock

Life assurance and critical illness policies pay good commissions to brokers.

I got hassled when we took out our mortgage 2 years ago to take out policies, but my oh and i have medical problems that would mean a whole range of exclusions. We have no dependants so if one of us died the other would get a lodger or sell up.

I'm not saying all life assurance is bad, but brokers do make a tidy profit from it, and it is NOT a requirement for a mortgage offer.

happybroker

Brokers do make really good money from life assurance its true but they are also strictly regulated in this area and should be making sure the policy is "sold" appropriately.

Comments like most lenders prefer/ require it don't help, it's nothing to do with it. If the benefits of having the cover are properly explained to some body who has a genuine need and can afford it then why would they not take it?

If one of you is happy to ake in a lodger or sell up, and I mean that would be the ideal solution for them, then great, you have no need for life cover but it sounds more like the standard reason we have all heard a thousand time from people trying to justify not having the cover.

can you tell i feel quite strongly about this? I think it's not just my job to get you into your home but also to make sure you can stay there!

Conrad

happybroker, no one has said do not have cover, the issue is where you buy it from.
Brokers can usually be undercut by some of the online firms that rebate commision etc.

FEE FREE brokers tend to want to sell you thier cover.
I charge fees as I do not flog insurance.

Conrad

happybroker wrote: »

can you tell i feel quite strongly about this? Iuote]


Commission helps people to feel strongly. Do you eat cereal?
Most are drenched in harmful pesticides, so eating them is about as bad as not having life cover, yet we still eat cereals so how can we lecture people about not wanting life cover.
Is sunbathing worse than not having life cover? UVB attacks sell DNA which can lead to mutations - so if we feel so strongly about not having life cover, shall we also feel as strongly about not sunbathing?