Mortgage Protection/Life Cover

U

Unregistered

Guest
Going to start investing in property on a small scale and borrow to buy-to-let 4 or 5 properties.

Is there a Mortgage Protection/Life Cover policy on the market that allows you to keep topping up the mortgage amount or do you have to close/open Mortgage Protection/Life Cover policies each time you buy a property?
 
I wouldn't consider 4 or 5 buy-to-let properties as 'small scale'. That's a €1 million portfolio, so unless you have €5m-€10m of other investments in your back pocket, this is a big deal.

I strongly recommend you do some serious financial analysis and get independent professional advise from someone who has no vested interest in this matter before you proceed with this deal. I heard the retiring CEO of IIB Homeloans on the radio yesterday saying that there was no value in Irish property today. Have you considered the risk of a property slump? Are you putting your home at risk to fund the deposits on these properties?

But to back to your original question, I'm not sure why you would want mortgage protection/life cover on each property/mortgage. If the worst came to the worst and your family were unwilling or unable to keep up the investments, surely they could just flog them off? If you want to buy an extra €1 million in life cover, why not just go out to the market & buy it - Why link it to your properties? I know there may be a slight tax advantage, but even this is going to have negligible impact in the early years when your mortgage interest will be high.
 
Good advice. Intend to look at somewhere like South Wales (lower end of the market).

My question relates to most (all?) financial institutions requiring you to have life cover to get a mortgage. If I get a mortgage on house 1 and life cover to cover the value and a month later I get a mortgage on house 2, I have to scrap the life cover on house 1 & get a new policy to cover house 1 & 2 etc. etc.
 
Hi

By law, you must have life cover on your own Homeloan, however you do not have to have it for every investment property you acquire. Some lenders may try to insist on it, just tell them where to get off ... unless your looking for particularly high LTVs, you sould not have to get cover.

Having said the above, Life Cover can be a very good way to help protect your family in the event of your death (no ill will intended :)).

Regards

G>
 
Unregistered said:
Intend to look at somewhere like South Wales (lower end of the market).
Click to expand...
To be honest, this has me more concerned than reassured. You are now adding foreign exchange risk, FX costs, local agent costs into the mix. Have you got a good understanding of the macro-economic factors at play in South Wales that will impact property prices?

IMHO, you'd be crazy to buy multiple properties in any one location unless this investment is a relatively small part of your overall portfolio.

But I guess the real question is why would you want life cover on these loans in the first place?
 
You must log in or register to reply here.
Back
Top