mortgage protection

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
16:41 Wed 13th Oct 2004
 
Best Answer


No best answer has yet been selected by angela9914. Once a best answer has been selected, it will be shown here.

For more on marking an answer as the "Best Answer", please visit our FAQ.

1 to 9 of 9

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.
-- answer removed --
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).
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.
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.

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.

-- answer removed --

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.

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.

1 to 9 of 9

Related Questions

I have a mortgage which finishes next year. I took out Mortgage Payment Protection Insurance policy to run concurrently. It is designed to pay out a certain monthly amount for a maximum of 12 months...
If, when you took out your mortgage, you also took out a mortgage protection policy through their recommended company i.e. Woolwich Mortgage and General Accident mortgage protection, can you make a...
I'll lay it on the line - I work for HBOS, I have a mortgage but didnt taken out Mortgage Protection Cover I presume this is now too late to take out as although no job losses have been announced -...
Hi,need some advise.Im in the building trade and am just holding on to my job with everything thats going at the moment.I have been told to take out mortgage protection just in case.Is there one that...
i took out mortgage protection in 2005. In 2006 I rented and still rent out the property. From 2008 I work part time and now believe this policy is not valid due to the hours I work. So for the past 3...

Latest posts