Mppi

getting_my_life_straight

HI

I know that a lot of MPPI claims are not upheld, but I when I bought my first house I was told that I had to have it, and also the bank insisted on having my parents as guarantors. ould there have been any reason to have the policy as well?
thanks

dunstonh

ould there have been any reason to have the policy as well?

If the lender insisted on it as a condition of borrowing then you had no choice and it was not mis-sold. It was only required on a number of deals around the mid 90s. It wouldnt have been required other times.

Reasons for having MPPI would be to cover redundancy (especially important at times in the past when benefits were less and personal responsibility greater.

Also sickness to compensate for loss of earned income.

getting_my_life_straight

Thanks for this, yes it was in the mid 90's. I also worked for my parents and my husband was self employed(1st year) so did not have any accounts so to speak to have as proof of income. I remeber being told all the things that we needed to have with the mortgage and I am sure that there were a couple of different policies that we took out. We weren't given the option of going elsewhere for them - I suppose that wasn't the practice then was it?

dunstonh

We weren't given the option of going elsewhere for them - I suppose that wasn't the practice then was it?

If it was a cross subsidy deal, then they wouldnt give you the choice to buy elsewhere as that is the point of a cross subsidy deal. i.e. you get x% discount on your mortgage rate if you buy the insurance through us.

Also, it should be noted that there is and never has been any requirement to tell you that you can buy elsewhere. Nowadays, they can insist on insurance as a condition of borrowing but they cannot insist on it being bought with them. They are not required to say that you can buy it elsewhere unless you ask.

magpiecottage

It is also worth noting that if there was a guarantor, they would be personally called upon to meet repayments on the loan if you could not.

In those circumstances it would perhaps be appropriate to say you "had" to have cover because, whether it was a contractual requirement or not, it would have been irresposible not to protect the guarantors with it.