Protect Home From Repossession

By: Simon Burgess

Suffering an illness which was to keep you from working would be devastating enough without having the additional worry of where you would find the money to be able to continue paying your mortgage. If you were involved in an accident that meant you couldn't earn a living would also leave you in the same predicament and could mean you would have to take months off. If you were to become unemployed by cutbacks in the company then you could also be looking for work for many months before finding a suitable position. Mortgage protection insurance would be able to get you through by providing you with a tax-free income each month.

Depending on your circumstances you can protect against all three possibilities or you can choose the level of cover which would be more suitable for your lifestyle. If you only want to protect against losing your job through unemployment then just take out unemployment insurance. If worried about losing your income to an accident or sickness then take out cover for this alone. The level of cover you choose to take out when getting a quote for mortgage protection insurance will reflect on the quote as does your age. This means that younger homeowners can protect their mortgage repayments far cheaper.

Mortgage protection insurance will be offered, and in some cases pushed, at the time of borrowing with the lender on the high street. However just because you got an excellent deal on your mortgage this does not means you will be given the cheapest quote to protect the borrowing. In the majority of case if you choose to buy cover independently you can get cover a lot cheaper.

Policies vary in cost and what is and is not included, this means that you have to take your time when comparing and also compare the terms and conditions. Exclusions can be found and some providers add-in more than others, along with this the starting and end dates will vary with providers. Some will start to provide the policy holder with their income after becoming unemployed or incapacitated for 30 days. However other providers might have you wait for as long as the 90th day before paying out. There are some providers that will backdate their policy to the first day of unemployment or incapacity which means you do not lose out.

Never be tempted to rely on receiving help from the State automatically if you should lose your job or have to take time from work due to accident or sickness. State benefits can take months to start providing for your mortgage and then only for the interests part up to the first £100,000. You also have to meet many terms and conditions which could mean you are not eligible for benefit. If you do not keep up with your mortgage then you are risking having your home repossessed. A far better back-up plan if is suitable is mortgage protection insurance. You would be able to relax and just concentrate on getting well and getting back to work or the cover would give you the time needed to find work again.

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