Bank insurance for mortgage

Conns

About 16 years ago, in order to get my first mortgage I was told I needed to take out insurance for the bank to cover them should the house be re-possessed and the funds recovered don't cover the money loaned. This cost around £700, and even now is a lot of money.

I was wondering with all the PPI bank claims, would I be able to claim for this and after this length of time? If so, do I need to have the paperwork as I guess this might be lost. Can contacting the lender alone mean they have to find my details?

Any help is appreciated.

opinions4u

There is no known case of these premiums being reclaimed that I'm aware of.

There's no evidence that the cover was mis-sold.

It was a legitimate cost of a high LTV mortgage and still exists for most lenders in one form or another.

Don't waste your time.

holly_hobby

This was called a Mortgage Indemnity Guarantee (referred to as MIG) - it was in essence an insurance policy effected by the lender, for the benefit of the lender, but with the premium chargeable to the mortgagor. Such policies were provided by the likes of Royal Ins who were a big player in MIG cover.

The basics of a MIG policy, is that should the property be repossessed by the lender, and sell at a loss, they would claim the shortfall from the MIG policy/insurer. (with the MIG insurer generally then pursuig the mortgagor for the claim).

It is not a payment protection insurance policy in any form.

It can not be mis-sold as it is not a policy based opon a review of your personal circs or your life.

It was in essence a commerical policy that was effected by the lender for their protection and benefit, and came into play if your LTV exceeded their LTV MIG threshold. It was usually added to the mge but could instead be paid at completion.

Alternatively, if you didn't want to be exposed to a MIG premium, you simply increased your deposit to below the threshold - the choice was yours.

MIG premiums to mortgagors slowly died out in the market place during 00's

Hope this helps

Holly