Single mortgage protection on dual mortage

H

Helen

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Hi

I'm just wondering if anyone has managed to get single mortgage protection for a dual applicant mortgage?

Both broker and the bank are saying cover is necessary for both - which costs double - however cover is only desired in the event of one applicant dying.

Thanks,
Helen
 
Helen said:
however cover is only desired in the event of one applicant dying.
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By you maybe (why exactly?) but the lender will want to be covered and so will generally insist on mortgage protection life assurance for all joint owner occupier purchasers.
 
I think what you are being asked for is cover on both individuals payable when the first dies. This is a requirement to cover eventually where either the male/female dies, and more so where there is only one person earning, as how could the non-earner pay the mortgage, and the constitution/family law act protects the family home, so banks reluctant to repossess family home.
 
Yeah - I should have been as clear as cloughy. Joint cover means that the policy pays out if either joint buyer dies not only if both of them die! The [broken link removed] requires that (all) owner occupiers have mortgage protection life assurance cover except in certain limited circumstances (e.g. where one or more buyer cannot obtain cover for a "reasonable" fee and the lender is willing to waive the requirement for mortgage protection life assurance).
 
There are a number of exception see [broken link removed] but unlikely you qualify if the only cost is double.

Mortgage protection is relatively cheap in the overall contex. If both in your 30 should not cost any more than 200 to 300 p a each

Contact labrokers here

Post crossed with clubmans
 
I understand what Cloughy is saying - that in the event of the main earner dying, the bank would want the mortgage covered. However I don't understand why it needs to be covered if the non earner died.
why exactly?
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The situation which prompted me to post the question was on behalf of a friend who is divorced but still part of a joint mortgage on the family home and also has a mortgage for himself.
He is not interested in cover if his ex partner dies, as the house would be sold anyway. So as it stands he has to pay mortgage protection 3 times over - twice for the original family home and once for his own home. He is also over 40 so the cost per person covered adds up to a substantial amount each month.
 
The bank don't want any hassle if someone dies so it is easier for them to insist on life cover even if another alternative seems more beneficial to the borrower. If your friend's ex-wife dies, what if there is negative equity when the house is sold? What if the house doesn't sell for a few months/years? What if someone living there (new partner, new child?) tries to claim the right to stay and not sell the house? No bank wants to be associated with throwing widow(er)s and orphans onto the street. All hassle hassle hassle which the bank just don't want. Much cleaner to get their money back from the life company, settle the mortgage and be done with their involvement. Presumably your friend was not in his 40s when he took out a mortgage with his ex-wife and property was cheaper then too so the older policies can't cost that much can they?

And as to why cover is needed for the non-earner, this is usually because they would normally be doing childcare/housekeeping if they are not earning - these are costly activities to replace so the surviving earner would have to pay someone to do them.
 
Helen said:
The situation which prompted me to post the question was on behalf of a friend who is divorced but still part of a joint mortgage on the family home and also has a mortgage for himself.
Click to expand...
Then surely he is an only an owner occupier in relation to his own home and is effectively an investor on the other property? As such the lender should be made aware of this and may waive the requirement for life assurance since it is not mandatory for investment mortgages. Of course this could have other implications...
 
Helen,

he maybe able to get the bank to waive the requirement as maybe viewed as an investment, but it is still the family home of ex so banks reluctant to repossess.

as an aside, if you could have posted more details in initial thread would have been helpful and could have directed the responses from more general to specific query.
 
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