Is it possible to insure against loses due to inability to complete after exchange?

Shakin_Steve

Ok...in answer to the question you asked : No.

marksoton

6am wrote: »

The feeling is mutual, ha ha.

Best of luck pal...

saajan_12

AnotherJoe wrote: »

Such insurance would be very expensive, and for something with a very low probability. Something with low probability would be cheaper to insure against.. life insurance for the young is cheaper than for older people, bad drivers have higher premiums as they are more likely to crash.. etc As I said one in 50 or so chance That's 2%, a massive chance! The chance a building will burn down is significantly less but you still have insurance for that. for the small proportion of those moving who actually get made redundant in that critical week. That's most likely why no one offers it.

That doesn't mean people are "happy to accept the status quo" it just means they are being realistic there's no way to ameliorate it at realistic cost, and it's obviously not possible to pass it up the chain. I agree its not the done thing, and the rest of the chain may get scared off by such a proposition, but why is a sort of private insurance / contract IMPOSSIBLE to negotiate?

OP, what you're suggesting isn't common, hence some of the shocked replies, but you're right there is a risk when there's a gap between exchange and completion. I don't know of any insurance that applies, but you could try running it by a broker.

As far as other parties in the chain go, I don't think it matters whether they *should* have to take on the risk of you job status.. its all a matter of negotiation. You don't want a big gap and they don't want to underwrite your job risk.. something has to give or you go your separate ways.

However thinking about what you're proposing, it's unlikely any vendor would agree as it defeats the purpose of a long gap. From the point of exchange, they are paid back for their costs if you fail to complete (e.g. removal bookings, onward chain costs etc). If your vendor were to underwrite your liabilities, then if you fail to complete they would have to pay back these costs to you, so they are still out of pocket the removals, etc. So what would be the point in exchanging? They don’t get the ‘guarantee’ of you completing because you have nothing to lose.

ToasterScheme

AnotherJoe wrote: »

It doesn't follow at all. Far fewer people are made unexpectedly redundant than move. Even fewer of those will have that happen in the one "critical" week out of 52 (typical exchange to complete timeline) because if they are made redundant before exchange they will cancel the move. In a month about 100k house moves and maybe 10k unexpected redundancies

. So that's 1 in 10 x 1in 50 or a 1 in 500 chance they will get notice they may be made redundant, not even actually made redundant. So it's very rare.

Fairly badly flawed.

The chances of being made redundant are the number of redundancies/the number of people who have jobs. The number of house moves doesn't come into that.
So say 10k redundancies (your figure) / 10m jobs (just a number, not even a guess on my part) = 1 in 1000. Much less than 1 in 10.

I would have let it ride, but this sum is still being used further down the thread.

csgohan4

6am wrote: »

I have identified the risk that the lender can refuse to release the funds after the exchange with devastating consequences for myself. I want protection against that risk for piece of mind, not because I think it is likely to occur. I am surprised that the financial industry did not come up with the solution to mitigate that risk and everybody are happy to accept the status quo.

My other suggestion to pass the risk on the other party is clearly not acceptable to a lot of people. I apologise if my suggestion offended you.



Thank you all.

Why would it be the vendor's problem that you can't complete after exchanging and indeed why would they care??? You pay for all costs associated with not completing, why would anyone want to share your risk with you? Would you share your car with a complete stranger to share the costs and insurance?

Why would a lender recall the mortgage or refuse to give out funds, now that is a question for you to honestly answer, i.e change in job circumstances, new poor credit, lying on the mortgage app/ mortgage fraud.

If a lender finds you fraudulently obtained a mortgage with false information , you will be black listed and will find it hard to get credit

6am

csgohan4 wrote: »

Why would a lender recall the mortgage or refuse to give out funds, now that is a question for you to honestly answer, i.e change in job circumstances, new poor credit, lying on the mortgage app/ mortgage fraud.

If a lender finds you fraudulently obtained a mortgage with false information , you will be black listed and will find it hard to get credit

You just listed a reasons why the lender can refuse to release funds. I can control some of the reasons, for example by not lying on the application form, I cannot control other reasons. For example I cannot control change in job circumstances. The vast majority of employees cannot control change in job circumstances. If they could control it nobody would be made redundant.

Taking it to extreme would you be happy to complete in 2/5/10 years time? Will you be able to guarantee that you will not be made redundant in that timeframe. Would you gamble your life savings on that?

6am

OK, I exacerbated a bit (the life savings bit). If the lender refuses to release funds and I will not be able complete I will lose a chunk of savings and will have a legal case to deal with. Not the end of the world. Still I prefer to insure that risk. But we already discussed that and came to conclusion that it is not possible. So be it.

csgohan4

crap happens in life especially with jobs, you cannot predict the future, the lender only needs to know what happens between now and completion, not when mystic meg opens their mouth.


If your so scared and uncertain, perhaps house ownership is not for you. You can apply your logic to your house being burnt down or the boiler breaking the minute you move in.


Go on the now, not the what if, but of course try and have a contingency plan

6am

csgohan4 wrote: »

If your so scared and uncertain, perhaps house ownership is not for you. You can apply your logic to your house being burnt down or the boiler breaking the minute you move in.

By your logic anybody who wants to buy an insurance is scared and that thing is not for them. Anybody who wants to buy a life insurance is scared of life and should stop living. Anybody who wants to buy a car insurance should forget about driving.

The house being burnt down is an insurable event and that is why I will insure it since exchange. The boiler breaking down is not a big deal, I can self insure it (i.e. pay for repairs myself). Or I could take a british gas cover, they are very good (in my experience).

Buy the way it is an interesting question how events will play out in the event the house burns down between exchange and completion. The mortgage lender will probably not release funds, the completion will fall through, the buyer will lose deposit + will have a legal case to deal with.The buyer is not going to rebuild the house because they did not complete and it is not their house (or whats left of it). How much the building insurance will pay in this case?

csgohan4

you can't insure everything in life. Even life insurance becomes difficult for whole life insurance as it is too expensive in the long term.


You can only try and influence things from your end