Lender's Interest Only Policy

glindich

Hello,

I have requested a breakdown of my payments from my mortgage provider and asked for details of an"insurance Premium" which I had been charged and this is what they responded:

"... we set up our Lender's Interest Only policy to protect our financial interest in the property. This policy was held in our name only, and in the event of an incident you would not have been able to have made a claim on it. We then cancelled out policy on 10 September 2013 following a business decision to cease requesting insurance documentation from all of our borrowers."

I am trying to work out if this Insurance Premium of £45.83 per month (!!!) was charged lawfully and what the insurance is actually for. As per their letter quoted above, it is to protect their "financial interest in the policy", which sounds a lot like Payment Protection to me but when I asked they said it wasn't Confused.com!

I would much appreciated advice on whether their charges are lawful and if not, if I could claim them back??

Thank you in advance,

glindich

I forgot to mention that my mortgage is a REPAYMENT MORTGAGE, always has been.

ACG

What was the LTV?
If it was above 75%, lenders usually have an insurance company to back them. They would then charge a Higher lending charge to cover this cost, some lenders would pay it themselves, some would pass it on to the customer.

I would imagine it would have been in that declaration you (most likely) didnt read but signed. I have only ever had 1 person in 2 years sit down and read it.

Thrugelmir

What did your original mortgage offer document say?

Goldiegirl

It sounds as if it may be the lenders indemnity policy.

Basically, in the event of repossession, they could have claimed on that policy if they made a loss upon selling the property.

Yes, it's legal, and no you can't claim it back.

Look on your original mortgage offer, all the details will be there

glindich

Thank you both, this makes sense.