Insolvency Insurance

theguvnor

Hi,

We are currently in the process of buying our first property. Part of our deposit is a gift from family.

We have a the report from our solicitor. It states that we need to take out insolvency indemnity insurance.

Is this normal? we have had our offer letter from our mortgage company and it does not state anything about it.

Any ideas / help??

Thanks

steeeb

If the person giving the gift goes bankrupt it's to stop them then coming after the gift. It's pretty standard. The solicitor has to look after the lender too, so although the mortgage company hasn't explicitly asked for it - they likely need it, or at least the solicitor needs it to make sure he isn't liable should it happen and it cause a problem.

theguvnor

steeeb wrote: »

If the person giving the gift goes bankrupt it's to stop them then coming after the gift. It's pretty standard. The solicitor has to look after the lender too, so although the mortgage company hasn't explicitly asked for it - they likely need it, or at least the solicitor needs it to make sure he isn't liable should it happen and it cause a problem.

Thanks for your reply. Is it easy to find the insurance? never heard of it so wouldn't know where to look for either!

steeeb

theguvnor wrote: »

Thanks for your reply. Is it easy to find the insurance? never heard of it so wouldn't know where to look for either!

Solicitor will/should arrange and make a couple £ commission no doubt. Pretty standard. Don't worry about it

amnblog

This is flavour for the month for solicitors currently. I suspect they make more on referring for the insurance than they do for the conveyancing work.

Dave_Ham

Agreed, the sausage factories who take the free legals from the big boys are trying to lever this on anything and everything it would appear.

ACG

Ive never come across this before?

Is it only if you use the larger firms? This has never been brought up with the firm I use.

Yorkie1

steeeb wrote: »

Solicitor will/should arrange and make a couple £ commission no doubt. Pretty standard. Don't worry about it

It will be a disbursement and so no profit etc.

amnblog

ACG wrote: »

Ive never come across this before?

You will.


All sort of firms - all sorts of sizes are on to it.

amnblog

BTW Dave & ACG


We were discussing in the office that this year we are seeing a wider incidence of 'deposit from savings' that is clearly coming from gift once we get the evidence in.


Our perception is that the borrower population seem to be increasingly of the view that they can say 'savings' and wing it.


Have you noticed this?

Dave_Ham

amnblog wrote: »

BTW Dave & ACG


We were discussing in the office that this year we are seeing a wider incidence of 'deposit from savings' that is clearly coming from gift once we get the evidence in.


Our perception is that the borrower population seem to be increasingly of the view that they can say 'savings' and wing it.


Have you noticed this?

Maybe a little, typically due to the nature of our cases being difficult and adverse orientated we usually sanity check as much as we can as early as we can in the process to minimise.














I think there is certainly a culture increasing where would be clients are telling us what they think we want to hear, rather than absolute facts.


Tony - you will see more of these indemnity insurances for sure, especially when using a conveyancing panel or the free legals crew. Not so apparent with the decent, local solicitors at present (in our opinion)