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Mortgage guarantee insurance

Little_Mo_13
Little_Mo_13 Posts: 1 Newbie
in Mortgages & endowments
When we took out our 1st mortgage in 1990 we had to pay a mortgage guarantee insurance, it wasn't optional, organised by lender from their chosen insurer. Was this mis-sold no benefit to us and not sure if the rate was competitive only choice was take it or mortgage will be declined.

Comments

  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    The purpose of the MIG is to protect the lender in the event of default by the borrower. There's no mis selling as the MIG was a condition of the mortgage offer. Your choice was to accept or decline the offer.
  • Annisele
    Annisele Posts: 4,835 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    The benefit to you was that the bank wouldn't have lent you the money if you hadn't paid for the MIG. As Thrugelmir says, the policy protected the bank if you defaulted on the loan. Without the MIG, many lenders wouldn't have lent to people they considered higher risk (i.e. those people with a smaller deposit).
  • bigsamih
    bigsamih Posts: 13 Forumite
    You were not mis-sold.
    I am a Mortgage Adviser. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
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