Mortgage and Building Insurance

Quinna1

I have recently started looking after my Nan's finances, previous to this she dealt with it all herself as she seemed more than capable and was very independent.

However on 1st inspection this does not seem to be the case. She had a morgage with Bradford and Bingley which we thought had been paid off year ago. However looking at it now it has a balance of c£3k. This has been made up by Bradford and Bingley charging her Building insurance to this account every year and my nan not making any payments? Is this legal?

Thanks

VIGILANT22

what? not paying your building insurance....she must have had some agreement in place when she had the mortage account with them & never closed off the account...If you're disputing this...who did she have her property insured with?...would be interesting to know if she'd had a claim if they would have paid out on an account in arrears.......

kiwiwogger

I had this with the Halifax adding insurance to my mortgage account, all I had to do was to prove house insurance was with another Company, send photocopy of documents(this was in the 90's!!!!) you could probably scan and email now....
The Halifax then re-applied payments back to mortgage account and all arrears were accounted for.

Quinna1

The problem is she didn't take out any insurance with anybody else. I am not disputing the fact that she did not pay my issue is:

1) Surely after year 1 if they didn't receive any payments thay would write and say if the account is not brought upto date they insurance policy is cancelled.

and

2) The £3k now is made up 50% of the 10 years worth of charges and 50% of interenst on the amounts.

I would have thought you would have had so sign to accept these charges and enable them to keep charging them to an account.

Thanks for any responses?

VIGILANT22

I think you will find whilst she had a mortgage with B&B the buildings insurance would be with them
I think you should be very glad a policy was in place if this is something she has "overloooked"!

opinions4u

Quinna1 wrote: »

1) Surely after year 1 if they didn't receive any payments thay would write and say if the account is not brought upto date they insurance policy is cancelled.

The terms and conditions of any mortgage will demand that there is buildings insurance in place. This is to protect the lender.

B&B were asked to arrange that insurance and will have sent renewals to the policy holder every year advising them to make the payments.

Where payments were not received they are debited to the mortgage account.

2) The £3k now is made up 50% of the 10 years worth of charges and 50% of interenst on the amounts.

Sounds about right. If the payments aren't made, this is what happens.

I would have thought you would have had so sign to accept these charges and enable them to keep charging them to an account.

It's called the mortgage deed. She signed it.

The mortgage was never formerly discharged and the account reamined open. It's not sharp practice on the part of the lender and while set up to protect the lender could have saved a hell of a lot of financial pain if the property had burned to the ground!

As well as sending out renewal notices they will also have been sending out annual mortgage statements as well.