Mortgage protection - arranged before contract deposit or before drawdown?

N

NineMoons

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Have read several of the threads relating to mortgage protection and am a little unclear as to when I should be getting it sorted out.

My partner and I put down a booking deposit on a house in a new development last Friday. We have four weeks to sign contracts and pay the balance of the contract deposit. The house itself won't be completed til September / October, so we won't be drawing down the mortgage cheque until then.

I got a few online quotations for mortgage protection but haven't done anything else about it. Is this something we need to sort out now, before paying the contract deposit? Or is it something we sort out over the summer, before completion?

I have read about some people having difficulties with delays over GPs signing forms, so if we need to get this done in the next month, I'd like to get the ball rolling now. I don't anticipate any problems as such (we're both approaching 27, both non-smokers and with no history of any life-threatening illnesses TG :D) but I don't want it to be something that causes problems.

Thanks for any help and apologies if I missed the answer among the threads I read! :)
 
I think that that is a really good question. Mostly, buyers are only aware of having a loan offer in place before signing contracts but not worrying unduly about having life cover in place until a few weeks/months before drawing down the loan cheque. I have come across a few instances lately where life cover has been declined or has caused problems - something that might easily have been dealt with prior to signing contracts has caused dreadful aggravation just before completion. The primary issue will be the cost but for a few hundred(?) euro it might be worth putting in place before signing contracts for extra peace of mind. And I assume if the deal falls through the policy can be cancelled.

mf
 
Hi there,

You don't need insurance for signing contracts. You have to have it in place before your mortgage can be drawn down. Mostly banks or brokers, etc need to receive your policy documents something like two weeks in advance of closing. However, you can apply for it now if you wanted. When filling in the application form you specify when you want the policy to kick in, which could be when your house is finished. This way, you'd know you've been approved and don't have to do it later.
 
Thank you both - that's very helpful. We'll get it sorted sooner rather than later, just in case there are any problems. Thanks so much!
 
we have our mortgage cover, (we've opted for life cover, but I assume the same principal applies), drawdown expected in next month or so, and once we were approved for cover, we signed the policy, but are able to wait for cover to start until we advise them of a date, they also give the first month free, which is handy. organised it through a broker, I know they get a commission, but it didnt cost us anything directly and the hassle involved, was worth what ever it cost indirectly.
 
Don't count on the no hitches. Both Mrs Wonko and I are non-smokers 27 and 29 respectively with only a football injury between us. For some reason I needed a medical which showed trace blood in my sample. The second sample showed up nothing. The insurers are humming and hawing and time is a-ticking.

Bottom line, get moving ASAP.
 
also be careful as we applied for mortgage protection when we were going for mortgage approval. We were given a quote from the insurance company, i disclosed all medical info at the time. This was fine.
However sale of house took longer than expected. Apparently the insurance quote only lasts three months, so when we went to draw down we had to reapply for mortgage protection, the week before we were due to close. It was merely a case of filling the exact same form out, which we did, repeating all info we gave in the first one. A different underwriter looked at it this time, and said no to us!
 
Ok, so we should get moving quickly just in case there are problems that slow things down. But in case the offer lapses, we shouldn't move TOO fast.

We'll probably be closing around September or October. So if we sort out mortgage protection in around mid-July, that seems early but not too early.

Everyone's so helpful here! Without AAM to run my odd little questions by, I'd probably be climbing the walls. Instead, I'm feeling pretty mellow about the whole thing. Thank you all! :)​
 
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