We will all experience some tragedy or difficulty in our lifetime, either financial (perhaps the loss of one’s job or the loss of money due to legal action or an unforeseen calamity), physical or mental health or even, eventually, one’s death. After all, there are only two things certain in life, so they say; death and taxes. But perhaps there are three things - death, taxes - and the subsequent need to keep up your mortgage repayments!
Failure to keep up repayments on your mortgage is likely to result, eventually, in the repossession of your home. It is, therefore, of critical importance that you make provision for your mortgage repayment in all circumstances.
If you have dependents it becomes more important to protect your home in the event that you are no longer able to keep up mortgage repayments because you are unable to work - or you are no longer here! This is where mortgage protection can help.
There are a variety of different types of protection available to you and if you have a mortgage it’s worth considering which type best suits you and your family.
In brief, there are products available to pay your estate (or a selected third party) a fixed sum on death. This might be for the amount of the mortgage or a larger or smaller sum. In many cases a lender will require a borrower to take out a life Insurance or Assurance Policy when entering into a mortgage agreement.
In addition, you are able to insure for the consequences of poor health. The types of critical illness insurance vary and revolve around either a fixed lump sum or a periodic payment.
The lump sum is usually calculated so as to be able to repay the outstanding loan and help the family to live after the insured risk has taken place (i.e. a serious heart condition or cancer). If you are ill or diagnosed with one of several chronic and debilitating or even fatal illnesses the policy will make a payment. The terms vary, but the advantage to this type of cover is that a lump sum or monthly payment is made whether you die or not - thus covering the period of illness and protecting your home and family during what is already a terribly painful time for all concerned.
You can also insure against the loss of your job - a risk that is now significantly higher than it might have been 40 or more years ago. It’s worth noting though that this type of insurance usually pays out only after an initial period of time has elapsed (perhaps 6 or 12 months) and so you must be confident that you can cover repayments in the interim.
For more details on the types of risk you can insure against and what best suits your particular circumstance and needs, take a look at our Insurance Products or contact us on 01628 507477.
Related articles:
The average age of a first-time buyer in the UK is two years older than 10 years ago. This is understandable with managing the cost-of-living and challenges within the economy such as high interest rates making it difficult to get onto the property ladder.
9 days ago
Skipton Building Society launches ‘Delayed Start’ mortgage meaning first time buyers won’t be required to make repayments for the first three months.
According to a survey by Skipton, first time buyers who bought their home in the last five years found that in the first three months of living there, they were spending upwards of £30,000.
14 days ago
If you have recently moved into a property with a garden that requires a little TLC, or you’d like to get on top of your current green space, check out our tips.
17 days ago
High street lender, NatWest, have launched a new product to help first-time buyers purchase a property with assistance from a family member or friend to get them on the property ladder sooner.
18 days ago
‘Buy Now, Pay Later’ (BNPL) schemes, such as ‘Klarna’ are short-term loans that allow shoppers to make a purchase, but delay paying for it for an agreed amount of time.
Klarna is one of the most popular BNPL services with 18 million customers in the UK alone, and offers interest-free payment options which is appealing to shoppers. However, does it affect a mortgage application?
23 days ago
We look at how to get the best Buy to Let mortgage rate, what's in store going forward, and options as a landlord with increasing costs.
14 Apr 2025
Throughout this past week, lenders have continued to reduce their mortgage rates giving borrowers in the UK some welcome news following the change in global tariffs under US President, Donald Trump.
14 Apr 2025
Did you know that buying a house, or relocating is in the top 10 most stressful life events?
Stress of course is an unavoidable part of life and there are many reasons why people experience stress, not just buying a house!
There are lots of effective ways to manage and reduce stress, check out our tips to help you.