Mortgage agreed but insurance refused...

jezebel

Hi,

Not sure if this is the right place, but looking for some advice. Just had a mortgage agreed (62% LTV) for FTB and been given mortgage but been refused critical illness and life insurance cover (not considering PPI) as I am overweight and short (okay, they said its my BMI but it's essentially the same!).

I've been told by a friend (who has given mortgage advice in the past) that I might not get the mortgage approved by underwriter if I have no life insurance. Any idea on if this is true? If there is a way to decouple the life cover and critical illness and if there are any insurers that are likely to give cover (even if it means paying a higher premium).

For info I was rejected by legal and general.

Any help gratefully received

nw_man

As far as I am aware there is no requirement by lenders for borrowers to have any life / critical illness cover.

However there is a requirement for the borrower to have buildings cover ( not contents ).

opinions4u

The life assurance shouldn't affect the mortgage.

I'd suggest you set up life / CI cover via an IFA. They'll scan the market for companies who are more generous to those of a higher risk nature. You can, if needed, have separate life and critical illness policies (subject to acceptance).

Premiums will probably be loaded though.

Rednoseranter

Your mate is wrong - if its complusory to have life cover in place for a any mortgage this will be detailed in Section 9 of the KFI provided to you before you apply.

looster

I sympathise - I too am short! I found going through my IFA that I could get cover but it was REALLY expensive. Gave me a short sharp shock though - have lost 1.5 stone on a diet :T and hoping to get a better quote soon...

Dan_1976

A few years ago life insurance used to have to be asigned to the mortgage like an endowment. This is very uncommon now. I think RBS or BOS and Yorkshire sometimes do this, but I am not sure. I think your friend may have been duped in to taking some life insurance!

koexelek

As long as you insure the buildings, 99% of lenders don't give a damn whether you take any other insurances or not...

... unless you are dealing with them direct, and they are a bit short on some of their targets

Jon_P_2

I originally had seperate Critical Illness/redundancy cover when i took out my mortgage (interest only). I thought i had to keep it going and they were charging me a fortune (family history of poor health) but then I found out that my repayment vehicle (a Flexible ISA Mortgage endowment) actually included Life Assurance covering the sum of the original mortgage so if i die the mortgage is repaid.

So it may be worthwhile looking for alternative angles to getting the Life Assurance cover mixed in with some sort of savings. I've switched to repayment but carried on with my endowment hoping that it matures with a decent(ish) lump sum whilst it still provides me with the Life Cover required for covering the mortgage

jezebel

Thanks for all the advice, I've checked the key facts again and I only need the buildings cover

I'm going to consider an IFA for the future as I need to sort pension etc and might be able to package the two

TEDDYRUKSPIN

LOL. Does'nt affect it. Must have building insurance in place if it is a house. That's it. The rest is your own risk. So if something happens to you, you are not insured. Your responsibility. That's it.

getmore4less

Personal insurance should not be a requirement of getting a mortgage.

Understand what cover you need and why.

Single people have little need for any cover at all.

With death you are insuring other people.

Important if you have dependants like kids but needs to be more than just pay off the mortgage, income needs to be considered as well.

Couples this is a lot less important in most cases you can do without any cover.


critical illness/ income protection, can impact other things like benifits so think these through carefully you may be better of having nothing and qualifying for everything if you really become unable to work.

Check what cover comes with your jobs in many cases this is more than enough to cover what is needed.