Morgage Help

[Fidgits]

hi guys, i was hoping you could help me out with some morgage confusion...

I got a 'morgage in principal' from an estate agent 'financial advisor', and went back to see him today to go into more detail.

All of a sudden, the morgage jumped from £800 a month to £1200, because he added on house insurance, life insurance, sickeness/redundancy etc...

Now, I think that legally i need buildings insurance, but from what i know, this is cheaper not to get from your morgage provider...

But my question is, what else do I NEED, what is reccomended, and what is a rip off...

and what are my options regarding all these?

Thanks in advance!

[Dave-Ellen]

you wud be better to get everything else from other people.

redundancy protection wud be best with him....however i've never bothered with it....tis expensive but if your job is doddgy worth itt

[Steve ( West Mids )]

Think Nationwide are doing 10 years at 4.99 % at the moment.

Buildings

Contents

Life / Mortgaga protection on one / two lifes ;)

Sickness / Redundancy look at in a few months

Shop around ad the FA will be making a packet off you and you won't be getting the best deal.

[Mr Morse]

A mortgage in principle is exactly that.....and you are not bound to take out any other insurance unless it is a stipulation of the mortgage.

Sickness insurance = waste of time & money

Contents = shop around

Remember that "financial advisors" are on commission and will take a cut of everything they can sell you.

I have been with Nationwide for the last 15 years, can't fault them!

[Fargo]

redundency insurance, may cost you now, but will save you in the future as NO job is safe.... could still take you a coupl eof months to find a suitable job, so let someone else pay the mortgage for you, then you can relax and find the job you want rather than the one you dont....should you find yourself in the position..

[MacRS200]

Depends on the company offering the mortgage, and the type of mortgage you are going for. If it is a repayment mortgage they will insist on life cover if someone else lives with you (wife or partner), it's called Term Assurance and is fairly cheap, you die it pays out.

Buildings insurance is a must, some lender insist that you take it out with them, ends up expensive cos they add it onto your mortgage every year unless you pay a lump sum, most people forget and get whacked for interest.

Is the advisor charging you fee? If not he/she is making money on commission on the insurance they sell. They usually only offer products from one company so may not be the best deal!

As for sickness, accident and redundancy insurance, read the small print, usually you have to have a near death experience and even then they only pay out after XXXX months and probably only for a year or so.

Hope that helps

[peter026]

When we took out our mortgage, because I am self employed I paid a lump sum with the mortgage to cover in case of accident and not being able to work again ( my job is classed as dangerous,I don't know why,there is only a slight element of risk in it)

The buildings insurance we went elsewhere,the insurance company then sent a copy of our insurance certificate to the lender,which is one of the provisios from our lender.

No doubt this applies across the board

[ColinBarber]

Buildings insurance is a must, some lender insist that you take it out with them, ends up expensive cos they add it onto your mortgage every year unless you pay a lump sum, most people forget and get whacked for interest.

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I didn't think they legally can force you to take out insurance with them however most lenders don't highlight the fact you can go with who you like. The same as new car warranty - you can get you car serviced anywhere not just the main dealer.

[MacRS200]

Buildings insurance is a must, some lender insist that you take it out with them, ends up expensive cos they add it onto your mortgage every year unless you pay a lump sum, most people forget and get whacked for interest.

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I didn't think they legally can force you to take out insurance with them however most lenders don't highlight the fact you can go with who you like. The same as new car warranty - you can get you car serviced anywhere not just the main dealer.

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Thing is it's their money and their house till you pay off the loan. They have a right to protect their money and they can say that alternative insurance is not acceptable and of you don't like it borrow from someone else.

If the loan is high to value they take out insurance on you defaulting and you pay their premium, it's called mortgage indemnity.

In short they make the terms cos you have the option to go elsewhere.

[deejaygee]

Hi - am going to give you my two penneth, for what it's worth!

Building Insurance - is compulsory and your solicitor will not complete until it is in place, however always look around. I do know however that certain mortgage companies stipulate that you must have their insurance.

Contents Insurance - A must really, not compulsory though - again shop around.

Life / terminal illness cover - I would always recommend this for the cost of it, it is different to Sickness cover - basically if you die or are diagnosed terminally ill your mortgage is cleared (paid off) for your partner / spouse etc. Costs as little as £5.00 a month - mine costs £8 for a £200K mortgage.

Redundancy Cover - THE BIGGEST CON ON THE MARKET - AVOID AT ALL COSTS!!!! - dont' let people tell you that it is a good idea, the benefits are little and the cost of monthly premiums are extortionate! The broker WILL be rubbing his hands together however, as they get a nice big kick back!

Basically - Will only pay pay out if compulsory redundancy. i.e not voluntary, if they offered you anything else (and I mean anything) and you refused - your policy is void!

They will only pay out after about 3 months of unemployment - and then they will only pay THE INTEREST and YOUR SHARE of the INTEREST.

For me (£1200 a month joint Mortgage) they would only pay roughly £250 a month! The killer is they want to charge you about £80 a month at the same time (Oh yes thats right you have to continue paying the premium!!)

Best advice with redundancy cover - Stick that Premium in an ISA, and should the worst happen you'll actually have more money!!.

Good luck.

[terdancam]

Hi - am going to give you my two penneth, for what it's worth!

Building Insurance - is compulsory and your solicitor will not complete until it is in place, however always look around.  I do know however that certain mortgage companies stipulate that you must have their insurance.

Contents Insurance - A must really, not compulsory though - again shop around.

Life / terminal illness cover - I would always recommend this for the cost of it, it is different to Sickness cover - basically if you die or are diagnosed terminally ill your mortgage is cleared (paid off) for your partner / spouse etc.  Costs as little as £5.00 a month - mine costs £8 for a £200K mortgage.

Redundancy Cover - THE BIGGEST CON ON THE MARKET - AVOID AT ALL COSTS!!!! - dont' let people tell you that it is a good idea, the benefits are little and the cost of monthly premiums are extortionate! The broker WILL be rubbing his hands together however, as they get a nice big kick back!

Basically - Will only pay pay out if compulsory redundancy. i.e not voluntary, if they offered you anything else (and I mean anything) and you refused - your policy is void!

They will only pay out after about 3 months of unemployment - and then they will only pay THE INTEREST and YOUR SHARE of the INTEREST.

For me (£1200 a month joint Mortgage) they would only pay roughly £250 a month! The killer is they want to charge you about £80 a month at the same time (Oh yes thats right you have to continue paying the premium!!)

Best advice with redundancy cover - Stick that Premium in an ISA, and should the worst happen you'll actually have more money!!.

Good luck.

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Top marks answer--and you can check things like the motleyfool website for further advice, although this is somewhat basic--------------------SHOP AROUND ON THE NET, get life insurance (seen more than one young death ) and forget redundancy cover as the best money advice is always have at least 3 months living costs in an account sitting earning interest and only available for a rainy day!

[Fidgits]

thanks for the advice guys..

can you reccomend where i could get life/sickness insurance from.

[deejaygee]

thanks for the advice guys..

can you reccomend where i could get life/sickness insurance from.

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Again Shop around a good website is Money Supermarket, I went with Direct Line who were very competitive.

[lexus boy]

Im going through the same at the moment with buying a house

Ive gone with traffords as costs b*ugger all. Can give you number one at home if you would like.

[Fidgits]

okay, out getting morgage quotes for the next week - so open for any advice/guidelines..

whats this traffords thing LB?

[Jolliffee]

These people are regulated and need to tell you every thing; just remember like every thing in life they will try to sell you more n more stuff. If this guy is a IFA try going to an Independent Mortgage Advisor and get another quote. I just set one up with my daughter and we did that and got a great deal with Bank of Ireland but sorted out our own insurance coz it was lots cheaper…..

[SHAHZ]

Think Nationwide are doing 10 years at 4.99 % at the moment.

Buildings

Contents

Life / Mortgaga protection on one / two lifes ;)

Sickness / Redundancy look at in a few months

Shop around ad the FA will be making a packet off you and you won't be getting the best deal.

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Ian go to nationwide and see what they can do for you, i was getting quotes from a broker and the best he could get me was with C&G @ 5.29% and said nationwide couldnt offer me anything.....went to see the morgage advisor at nationwide who soon said that they could and walked away on saturday with 4.49% :D :D :D :D survey was carried out yesterday :D its all moving too quick at the moment

[Fidgits]

yeah, i've just had an offer on a house accepted!

although now completely confused as to whether its right!!

[SHAHZ]

I suppose thats down to you now mate....is the location right, do you see yourself living there, what are the neighbours like?? what are the transport links like how much do you need to spend on it IS THERE OSP or a GARAGE just some of the questions you should ask yourselves :)

[Fidgits]

I suppose thats down to you now mate....is the location right, do you see yourself living there, what are the neighbours like?? what are the transport links like how much do you need to spend on it   IS THERE OSP or a GARAGE     just some of the questions you should ask yourselves :)

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locations pretty good.

See myself living there, erm guess so...

Transport, not really... close to bypass up to M4..

shouldnt need to spend anything, might need a lick of paint in the next year

Have driveway and garage - just off to the side of the house...

[lexus boy]

okay, out getting morgage quotes for the next week - so open for any advice/guidelines..

whats this traffords thing LB?

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traffors like a big insurance company...do insurance for everything. Have aeroplae insured with them, now house too...move in next friday.

[SHAHZ]

I suppose thats down to you now mate....is the location right, do you see yourself living there, what are the neighbours like?? what are the transport links like how much do you need to spend on it   IS THERE OSP or a GARAGE     just some of the questions you should ask yourselves :)

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locations pretty good.

See myself living there, erm guess so...

Transport, not really... close to bypass up to M4..

shouldnt need to spend anything, might need a lick of paint in the next year

Have driveway and garage - just off to the side of the house...

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Well if it ticks the right boxes and it feels right dont delay mate, you dont wanna lose it ........has happened to me when i didnt act quick enough......i tell you mate i was sick of viewings its good to get my evenings & weekends back......well sort of now where out buying things for the place

[Fidgits]

well, they accepted my offer - im just sorting the solicitors and mortgage out...

[Dave-Ellen]

Good luck..........

[Mrs_Mop]

6-8 weeks!

far too long to wait!