Credit check when getting home insurance before completion date

Sunshine012

Hi
I am writing because I am concerned.
I am a week away from completion and started sorting out home and life cover.
I had an option of once of payment and monthly instalments so I went for monthly direct debit option when was quoted.
I approved my quote and now received the e-mail that I need to enter the credit agreement when I want to pay my home insurance by direct debit and there will be a credit check done on me.
I am thinking to pay once of now as I do not want to enter into credit agreement before the completion date and if the bank will run another credit check before completion I do not want to get to trouble.
On the other hand I have life cover and once off payment would be too much at one go and I am worried that I will have to enter into the credit agreement.Would this hurt my credit score and decline my mortgage?
What are your experiences on this?I am not sure what is right here...
I pay my car insurance by direct debit.Is that also a credit agreement which I never knew it was one?
Thank you for replies in advance

Mortgage_Expert

Hi Sunshine012, what will be the total sum each month for the home and life cover?

Sunshine012

Home insurance £20 a month
Life cover £80 a month

Mortgage_Expert

Hi Sunshine012, firstly, it is highly unlikely that the insurance credit searches will have such a material impact on your credit score that the mortgage would be compromised late in the process. Furthermore, it is totally reasonable and right for you to arrange insurance now that you are taking on such a significant financial commitment, being a mortgage. Your lender would expect you to arrange insurance, and infact home insurance will be a condition of the mortgage. Assuming that the insurance is affordable to you on monthly basis, and was part of the affordability budget, it will not be a problem for you.

rosieflowers

Hi Sunshine, I've just done this and had the same concern as you, especially after being so careful around credit in the lead up to getting a mortgage.

I could have paid the whole annual fee out of my remaining savings (probably more moneysaving :money:) but would rather have kept the chunk in my savings as I have just spent the majority of my savings on the deposit (£25k to deposit, kept £4.5k) and it seems more sensible to keep the remainder in case of emergencies etc in the new house.

As Mortgage Expert says surely this is an expense that the lender will find reasonable anyway.

Long story short I just went for it (£38 p/m insurance premiums, mortgage is £1k a month), had no issues whatsoever and we completed today.

My Natwest OLB app now shows my mortgage owing of £287k ish :eek: but so excited to get keys later on, best wishes to you too :beer:

Old_Lifer

The premium is really an annual premium but you have chosen to pay it in monthly instaments That is where the credit aspect arises.