Remortgage advice Insolvency policy/transactions at undervalue/indemnity insurance

angelbeefpie

Hello! I'm a first-time poster and am hoping someone can give me a heads up. My partners is currently in the process of remortgaging and transferring some of equity to his ex-partner. Everything is going smoothly. He received sent some docs today which we both are not quite sure about - I suspect he will be clarifying with convenyancers but wondered if you people would know to help us understand!

They have enclosed an Insolvency Policy - 'Lender Only Block Policy'. In their letter it states that this is a one off premium, payable by him for £99. Plus an admin fee of £32. They mention they receive a commission payment which belongs to us on taking it. It doesn't say that he has to take it. We don't understand what it means and it seems to cover the lender if the owner becomes bankrupt/insolvent?. Does anyone have an experience of this.

The second point concerns the TR1 form it says 'the consideration of half the existing debt with [Bank] calculated at date of execution plus [equity] to [ex partner]. Surely it should be all of the existing debt?

If you've managed this far - well done!

Thanks in advance.

ABP

luckyfool

It is to protect the lender and is probably compulsory. It covers your partner transferring equity/assets and means the insurance policy would pay our if he became bankrupt in the near future and creditors sued to recover this money.