Help? Think we have been misold insurance on our mortgage application.

Sami_x

Hi there,

Wondering if anyone can help. Last Saturday we went to our Mortgage consultant to hand in evidence for a Leeds B/S mortgage which we had been provisionally approved for. As we were doing this the mortgage consultant was bombarding us with building/contents insurance, life insurance and income protection insurance. She did this in about 45mins.

She gave us the impression that what she was doing was for illustration purposes. OH already has income protection etc and we said that we wanted to look into insurance ourselves.

The whole thing was very rushed. My name spelled wrong, OH being classed as a non-smoker etc when he's not etc....

Surprise Surprise we get a load of stuff through the post indicating that we signed up to it all.

We are going to cancel EVERYTHING!!! and arrange our own insurance.

What i have come on here to ask is...do we need to have building/contents insurance or any other income/life insurance set up for the mortgage to go ahead? c

Really Really annoyed and feeling very stupid but she did assure us that it was for illistration purposes and she knew that OH had income protection?

UsernameAlreadyExists

Sami_x wrote: »

What i have come on here to ask is...do we need to have building/contents insurance or any other income/life insurance set up for the mortgage to go ahead?

You need the buildings insurance (contents is up to you) so that should your house catch fire/flood etc it's covered. The lender has no interest in the contents, that's your problem!

They'll normally expect sort some of life cover (although I've never had to prove it) as well so that in case of death, the debt can be repaid. (I have a death in service benifit at work linked to my pension, so I don't have a separate policy just for my house).
Income protection insurance is your choice though.

So ... buildings/life - yes!

Sami_x

Thanks for getting back to me. We will be taking out insurances but do we need to do this at the moment. Also how can we provide information (such as types of locks/walls) if we are not living at the property?

For the mortgage to be agreed do we need insurances at the moment?

UsernameAlreadyExists

Sami_x wrote: »

We will be taking out insurances but do we need to do this at the moment.

For the mortgage to be "agreed" then no, you'll not need the insurances yet.

Sami_x wrote: »

Also how can we provide information (such as types of locks/walls) if we are not living at the property?

Ask the vendor, have a second viewing? You might be able to get away with arranging your buildings insurance online on the day or very soon after you move in (depends how your lender requires the evidence of insurance being in force).

Seems like the mortgage consultant was very over zealous in setting all of this this up for you - you've not moved yet!

StrawberryTwist

From my understanding as a FTB we will need buildings insurance in place to be allowed/able to complete.

The other insurances are your own choice for you own peace of mind. I think in the past life insurance was mandatory as well but I am not entirely sure as I am basing that on my parents buying back in the dark ages For me personally, I want all that in place as knowing my luck the day we pick up the keys I will fall under a bus and poor hubby will have a huge debt around his neck to sort out on his own

holly_hobby

In relation to a mortgage the only compulsory insurance (which must be held throughout the term of the mge) is buildings insurance. - this is a condition within your mge T&Cs, and irrespective of whether you are a FTB or not.

Other insurances are your decision to effect or not.

For example you may wish to effect joint life and Critical Illness (CI), cover so that at least the mge is repaid on 1st death or diagnosis of a CI, or you may choose (subject to affordability of course, and CI can be a bit meaty premium wise) to effect a higher level of cover to provide for your partner and/or dependants.

Income protection in the form of ....
Permanent Health Insurance - payable after an initially selected waiting period has elsapsed, and designed to replace a portion of your lost income on illness forced absence from work.

Mortgage Payment Protection Ins (MPPI) - which is typically only paid for a 12 mth claim period.

You can of course source such provision yourself, but engaging an IFA will ensure that your actual needs have been fully assessed, with appropriate recommendations and the most suitable providers sourced and presented for consideration.

Hope this helps

Holly

Sami_x

Well, we've cancelled everything. I doubled checked with Leeds and they have said that its best to wait until we have been approved for a Mortgage. Once we get a completion date? We will see if we can view the property again to get details on locks/walls etc.

Does this sound right?

holly_hobby

Doesn't sound unreasonable.

Be prepared that the adviser may give you a call, when she notes that the policy sign ups have all been cancelled (albeit they haven't yet commenced).

H

koexelek

holly_hobby wrote: »

Doesn't sound unreasonable.

Be prepared that the adviser may give you a call, when she notes that the policy sign ups have all been cancelled (albeit they haven't yet commenced).

H

This is the best thing to do, do get one over on a pushy adviser.
She will now have done all that work for nothing and will be absolutely livid
Pointless pushing insurances on people, because unless clients take them out and keep paying them, you don't get paid a penny for your efforts.

holly_hobby

Yep won't do her persitency records any good either !

H

Sami_x

Well, it was all done in 45 minutes errors all over the place. Hope it doesn't have an impact on us actually getting the mortgage.... her being livid or not!

Arrangement fee for the mortgage has come out and I'm assuming that she'll get another payment when we complete.

This is a process that I don't want to repeat for a very long time :eek: