mortgage protection

flw

do i need motgage life protection and life insurance or just one

any recommendations for mortgage protection

lisyloo

What do you mean by "mortgage life protection"?

That's not a standard term that I'm aware of, so you need to explain what it is.

flw

the insurance your mortgage provider insists you have

lisyloo

the insurance your mortgage provider insists you have

I'm afraid that still doesn't tell me what you mean because each lender has their own different policy.

My lender doesn't insist on anything.
But what I THINK you mean is life insurance.
So no you don't need to get it twice.

If you already have life insurance and are applying for a new mortgage then your provider ought to accept what you have - providing it is large enough to cover the mortgage of course.

There are mortgage providers who don't insist on it and you could argue that you don't need it if you have no dependents (simply let the house sale pay off the mortgage) although it can make things a lot simpler for those left behind if you do have it (as a house sale could take some time and lender will want the mortgag to be paid).

But you certainly shouldn't need to get it twice.
Your lender will obviously try and get you to buy theirs (because it makes them money) ut if they are forcing you to buy something you don't need then you should consider looking elsewhere.

lisyloo

Mortgage Life Protection is decreasing term assurance which will cover your mortgage debt on death.

I presume that decreasing assurance is only provided for repayment mortgages? and that level term assurance would be bought for interest only.

lisyloo

So no you don't need to get it twice.

I would just like to clarify that I mean that you don't need to get it again IF what you have is already sufficient.

Obviously it depends on your circumstances.
If you have a non-working spouse then you need to consider their housing needs and need for money after your death.

If however you are on your own and have no dependents then it's different.

You need to look at your own circumstances.

But you certainly don't need to get it just because someone want to sell you some.

Hope that clarifies.

Wealth_Wizard

Yep good point

Interest Only - urrgh! makes me shiver

WW ;D

lisyloo

Interest Only - urrgh! makes me shiver

Why?

I would be interested to know your reasons.
I have an interest only mortgage.
I am setting aside capital repayments AND overpayments.

The reason why I have interest only is that my capital repayments are VOLUNTARY.
This means that if I hit a bad patch then I can go down to interest only as a temporary measure WITHOUT needing the banks permissin, going into arrears or getting a bad credit rating.

Of course this would only be a temporary measure and normally I would be making full repayments (PLUS overpayments).

Can you see anything wrong with my scheme? (I accept it's only advisable for disciplined people).

Have I changed your mind that interest only mortages MAY be useful in SOME situations for SOME people?

If you can see anything wrong with it then I would welcome your comments but no-one has yet managed to come up with any significant arguments against it.

dunstonh

I'm on interest only too. Part backed by a rather splendid endowment and ISAs.

As for life cover, if someone is going to be worse off in the event of your death, then you need it. If there is no-one, then you dont.

I thought mortgage lenders couldnt insist of life cover as part of the deal anymore?

DiggingOut

I presume that decreasing assurance is only provided for repayment mortgages? and that level term assurance would be bought for interest only.

Not necessarily true, I think. If you have interest only and have a repayment vehicle that is increasing in value, presumably decreasing assurance would make up the gap between the debt and the repayment vehicle.