Remortgaging -long term sick but income insured
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I'veforgotten
Posts: 9 Forumite
Hi, I am new to these forums and wondered if anyone could give me some advice. I am a medical practitioner and recently had to undergo brain surgery for a long term condition. Long story short I now have some cognitive difficulties making it hard to do my job properly. It is only 4 months post surgery but it looks likely that I may not work again in my profession as there is not much improvement so far. Luckily I have income protection insurance which will pay me 55% of my wage until I am 67 (I am 41 at the movement). This covers the mortgage plus bills currently and my wife also works but is self employed. My question is - how will this effect me when I come to remortgage in two years time. I may not have a job but I will have insurance that will cover the mortgage as long as I am unable to work? (I also have mortgage protection insurance to cover the bulk of the mortgage debt if I die - though not currently planning on doing that anytime soon!). Will I be able to get a mortgage offer or will I be stuck with my current deal? Thanks in advance - we just want to be able to plan our long term financial future with a bit more clarity.
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Comments
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Most lenders have fairly decent client retention or product transfer rates that are there or there about on competitiveness. There are some exceptions. These can usually be picked online without any underwriting or questions asked.
Alternatively there are some lenders who accept income protection income, not all will, so a broker would be a decent starting place for you.I am a Mortgage AdviserYou 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.0 -
I'veforgotten wrote: »I may not have a job but I will have insurance that will cover the mortgage as long as I am unable to work?
Do you receive the income protection directly from the insurance company or do you receive it from your previous employer. If the later then you are still employed, even if you aren't going in to work.
If you were self employed and took the policy out yourself then I'm not 100% sure if claiming you're still self employed is technically correct, theoretically you're off sick.
If you were employed and took the policy yourself and your employer has terminated your employment then I have no idea what I'd put on any application.
I expect they will have stated clearly at the start of your claim that you aren't medically retired, because they will want you to return to work. It will depend on the particular IP scheme how long they will continue to pay you all the time you say you can't work.I'veforgotten wrote: »Will I be able to get a mortgage offer or will I be stuck with my current deal?
It will obviously have some effect on affordability calculations as the only income you can prove is 55% of your old salary.
Your existing lender is the safest option for not asking too many questions. It's probably in your T&C that you should have informed them when your income dropped, although it's something that most people would not remember to do......0 -
Hi, thanks for all the advice. I am employed and the policy is taken out privately by myself. It is insurance for being able to do a specific job (doctor) and the insurance covers my entire working life as long as I continue to be affected.
I’m fine in myself but can’t beat my 6 year old at noughts and crosses or do my 8 year olds maths homework. I wouldn’t want to be treated by me at the moment and I can only assume the insurance company will agree (there have been more scientific tests done to support this as well!). It is unlikely to improve significantly.
The 55% of salary is not taxed as far as I can see and as I am on a low rate tax the drop in income isn’t too bad. Especially as we are paying less childcare etc and me being at home for the kids allows my wife to work a bit more if needed.
Thanks for advice - think I will start with my current lender and keep you informed. I hadn’t even considered telling my current provider - will check my small print! Thanks again0
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