mortgage protection

[angela9914]

i was told i had to take mortgage protection out with my loan, is this correct for companies to do this, or should i have been allowed to shop around

[DaveP]

You should be able to shop around. Some mortgage companies require you to take out their Buildings and Contents insurance (or pay them an admin fee if you go elsewhere) but I am not aware that it is mandatory to take out the Mortgage Protection supplied by the lender.

[vicars]

The only compulory insurance needed is buildings insurance and even this can be bought separately. Another possible product that may have to be taken is a repayment vehicle such as ISA if you take an interest only loan with a few companies - but again you can shop around. Ask the company for its terms and conditions and ask where it specifically mentions you have to take out mortgage protection. In the past lenders have made it compulsory but their terms and conditions will settle the matter (the adviser will probably backtrack and say he/she meant it is highly recommended).

[NoGood Boyo]

If someone offers to lend you money, they can impose whatever conditions they like (within reason). If you don't like the conditions, you don't have to take up their morgage offer, so you will need to shop around for the loan, not the insurance policy. It is common practice and quite legal for insurance to be a condition of the loan.

[BenDToy]

I second NoGood Boyo's opinion. They can't force you to take out their morgage, but if you do, they can impose conditions like this one. You pays your money, you takes your choice.

[BillyNoMates]

It's certainly illegal for a Lender to insist that you take out House & Contents insurance with them so I would think it would be the same regarding mortgage protection.

Unfortuna terly, often the way they sell it is on the basis of 'you won't get the loan if you don't ...'

You have every right to shop around and more than likely will get a better deal.

[J3TUN]

You should check the small print of the lenders terms & conditions. Most lenders do not insist on life cover and only recommend you take it out out as part it is good advice to do so in many BUT not all cases. Quite simply, if you doubt the advice seek the second opinion of another mortgage broker to see if you are being told pokies by the first advisor.  If you are being told porkies and the advisor is either a high street lender employee or a MCCB registered independant broker then they could be in deep poo if you made an official complaint about their "conditional sale". Good luck.

[EverClean]

They can impose conditions to the loan - if they tell you that you must take out their policy as a condition of the loan then the choice is yours - take their loan and the attached conditions or go elsewhere. They should have made this clear at the outset but many companies don't - they just hide it in the small print.