Lender paid out mortgage protection insurance directly to me

Had mortgage protection on buy to let property which didn't cover full amount of mortgage. Mortgage is 120k and bank paid out the 80k to me and not off the mortgage. My partner died and have a 13 yr old. Is it possible to get another mortgage protection policy on this property. Or should i just pay this off and sell the property in case house prices drop. House is worth about 180k.

bank paid out the 80k to me

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Do you mean the insurance company?

Or did the bank act as agent for the insurance company?

Was the mortgage protection policy a condition of the mortgage in the first place or was it something you took out just in case?

If it was a condition of the mortgage , you should contact the lender and ask them if they want it paid off. They might not.

If it was not a condition of the mortgage, then you are free to do with it as you see fit.

Dorothy5 said:

should i just pay this off and sell the property in case house prices drop. House is worth about 180k.

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For any major decision like this and where you have had a sudden drop in income, you should do a full Money Makeover and not attempt to answer a very important question in isolation.

Thank you. Yes i will check with Pepper if it needs to be paid off. Whats the best option to do financial makeover as my partner was main income and i only work partime. Life insurance sitting in bank as not sure what to do.

Hi Dorothy5,

If you click on the Key Post link that Brendan has provided above, you will see the instructions for setting out your financial situation in a new thread in the Money Makeover forum on AAM. You just need to copy the layout and add your information in a new thread. If you are having trouble with this let me know and I will try to help.

Sue Ellen.

@Dorothy5, sorry to hear of your sad loss and its probably a very difficult time for you right now. I'd suggest you visit your solicitor with the paperwork to help work out your options and obligations.