Whether you are a first-time buyer or a seasoned pro, understanding the insurances that you need to take out when starting with a mortgage can be a minefield.
Here we advise on the 5 main insurance policies you need when taking out a mortgage.
In much the same way that it is a legal requirement to insure your car, you can’t have a mortgage without insuring the building you’re borrowing money against. Most reputable mortgage brokers will help you find the best buildings insurance for your circumstances and ensure that you get the best deal you can.
While this is an optional insurance when taking out a mortgage, it is one that we heavily recommend that you think about. Imagine if you picked your house up now, turned it upside down and shook it around – everything that falls out is what your contents insurance would cover. Sofas, appliances, clothes, cushions, lamps, computers and more – none of this is covered by buildings insurance, so it is very important that you have enough contents insurance to cover your needs.
Whether you are unable to work due to illness or injury, income protection insurance does exactly that – it protects your income to allow you to maintain your lifestyle when unable to work, typically until you are due to retire so for the whole of your working life. No need to worry about mortgage payments and bills; talk to your mortgage adviser now to find out how much you could receive and for how long.
Critical illness cover can either be taken out by itself or bought as part of a package with life insurance.
Unlike income protection insurance, critical illness cover pays out a lump sum when you meet one of the listed definitions. Critical illness cover is there to help to support you and pays off your mortgage so that you don’t need to worry about losing your property while dealing with your diagnosis, treatment and prognosis.
In the unfortunate event of your death, life insurance makes sure that your family have a safety net to fall back on by paying out a lump sum to pay off the mortgage, so you don’t leave them with large amounts of debt. After deciding on the amount of money that your family would need to survive should you die, your adviser will help you to find the best deal.
In most instances the life insurance will run for the term of the mortgage, although some people take out life insurance just until their children are financially independent.
With a good mortgage adviser or broker, the insurances you need when taking on a mortgage need not be complicated.
At Visionary Finance, we can help to walk you through the mortgage maze and ensure that you have all relevant insurances in place for safety and peace of mind in your new home.
For more information on insurances and mortgages, contact the Visionary Finance team on 01908 465100 or fill in the contact form on the right.
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