Life Insurance shortfall for Mortgage

M

Mark_jmc

Registered User
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Hi,
We are buying a new house - purchase price €440k.
We have been approved for mortgage of 80%- €352k pending poof of life cover.
My wife's life cover is higher than the €352k.
My life cover was reduced by the amount of a successful critical illness claim 2 years ago and now stands at €339k.
I have just been told by my insurance cover that I cannot increase my life cover until 4 years after the all clear (2 years time).
I will be asking the bank but does anyone have experience of a bank allowing a mortgage with a small shortfall in life cover?
If they don't then we will just come up with the money and reduce the mortgage to match my life cover but would much prefer to have this money to put into the house
Any thoughts?
Thanks,
Mark
 
Hi,

You'd need to first meet the exemption requirements of the consumer credit act before a bank could legally take you without insurance. You probably do if you can't get insurance.

http://www.irishstatutebook.ie/eli/1995/act/24/section/126/enacted/en/html

In practical terms, I think there's a requirement to get rejected for cover, and then you apply for a waiver and the bank can accept your application. I'm not familiar with this area, but others here might be able to advise better.
 
I forgot to mention- we also have an Investment of €50k- could we use this as 'collateral' for the €13k shortfall in life cover?
 
Ask the bank can you do a waiver, you have asked your insurance company and can't get an increase so that's one refusal. They may want you to apply to another company but that's probably just a formality and you will get another refusal. They have standard waiver forms to allow for people who cannot get cover for one reason or another but it is at the bank's discretion.

Your case is different to most in that you actually have quite a good level of cover already in place so I wouldn't imagine you should have difficulty with the bank. You will have to do the waiver same as someone who has no cover but then they probably would that policy assigned to them anyway.
 
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