Mortgage Indemnity Insurance - HELP??

samworth

HELP!!! I am remortgaging to take advantage of a fixed rate with the Nationwide. I am borrowing £85k against house value of £220k. I am also adding my husband to the mortgage and deeds. The solicitor is saying we have to take out mortgage indemnity insurance at a cost of £110 in case I should be made bankrupt. This is also reviewable annually in case the valuation increases.
Does this mean it will cost £110 annually? Why is it necessary as surely Nationwide will have a 1st charge and will get 1st dibs IF I should go bankrupt (which is highlyy unlikely)?
Soicitor is also mentioning Stamp Duty but will let me know in due course? Why?:mad:

dunstonh

your solicitor is wrong. There is no stamp duty to pay on a remortgage and the insurance is not required.

samworth

many thanks for your reply the other day.
Solicitor has now said Stamp duty is not payable which is something!
BUT ...She has now also said that the MII has to be paid in their duty to the Council of Mortgage lenders. The nationwide has said it is not part of their mortgage offer and it is up to us if we want it. Can i refuse to pay it?

happybroker

if the nationwide don't require it as a condition of the mortgage advance then yes, you can refuse to pay for it.

If it is a protection against you going bankrupt I would think it is Defective Title Indemnity and I can see where the solicitor is coming from if you are adding some one to the deeds but it isn't normally compulsory.

easyfinance

Your solicitor is useless. Mortgage idemnity guarantee, more known as high lending charge is a charge you pay usually when you borrow over 90% loan to value but that actually benefits your lender.

In your case your lender hasn't asked for it ... so you don't have to pay. It doesn't have anything with bankrupcy, I haven't heard bout a policy that protect you going bankrupt. If someone ... please tell me.

happybroker

easyfinance wrote: »

I haven't heard bout a policy that protect you going bankrupt. If someone ... please tell me.

OP is transferring Husband onto deeds. If she goes bankrupt then official receiver can view this transaction as her disposing of assets to protect them and attempt to go after the house.

The Defective Title Indemnity can offer hubby protection against this as he will obviously suffer a loss if it happened. The £110 premium gives you an idea of how unlikely they are to pay out on a claim though eh?

payless

dunstonh wrote: »

your solicitor is wrong. There is no stamp duty to pay on a remortgage and the insurance is not required.

As there is a transfer of equity ( for consideration - tthis being the sharing of the mortgage commitment) the transcation does in fact generally need to be reported to the HMRC , albeit with the figires mentioned ( assuming partner is gifting rather than taking payment ) no duty would be payable in this case as the considerationis below £125K

http://www.hmrc.gov.uk/so/technewsletter3-2.htm

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Easyfinance said

Your solicitor is useless. Mortgage idemnity guarantee, more known as high lending charge is a charge you pay usually when you borrow over 90% loan to value but that actually benefits your lender.

In your case your lender hasn't asked for it ... so you don't have to pay. It doesn't have anything with bankrupcy, I haven't heard bout a policy that protect you going bankrupt

Maybe the solicitor would say the same back... this has nothing to do with HLC see http://www.conveyancing-cms.co.uk/transfer_equity2.asp

The lender may or may not be insisting, but if not they will likely do so if the solicitors recommends

minimike2

easyfinance wrote: »

Your solicitor is useless. Mortgage idemnity guarantee, more known as high lending charge is a charge you pay usually when you borrow over 90% loan to value but that actually benefits your lender.

In your case your lender hasn't asked for it ... so you don't have to pay. It doesn't have anything with bankrupcy, I haven't heard bout a policy that protect you going bankrupt. If someone ... please tell me.

You are talking about something totally different to what the OP has said.

MIG is something totally different!