Mortgage Protection UK Explained

A mortgage protection UK policy could keep you from losing the roof over your head if you were to suffer an accident or illness or lose your job to unemployment. It can be taken alongside your mortgage from the lender but a better option is to shop around among the standalone providers and get a better deal.

The cover will give you a tax free amount every month to help towards your mortgage repayments should you lose your income due to redundancy, or because of recovering from accident or illness that prevent you from working.

In some cases in the past lenders would add in the cosy of mortgage protection UK cover without making the consumer aware of the exclusions and other essential information they needed. There are exclusions in all forms of mortgage payment protection insurance policies and you have to check these against your circumstances if you want to ensure that you would be eligible to make a claim on the cover. However some were sold policies without being aware of this including those who had reached retirement age and who were self-employed. All ethical payment protection specialists should include this information on their website so that you are able to check for yourself if taking out cover is a viable solution. Once you have done so then you would have a back up plan on which to fall if you needed it due to a loss of income.

Mortgage Protection UK from Burgesses

When taking out a mortgage protection UK policy with a standalone payment protection specialist you are able to tailor the policy to your needs. You can choose to take out cover for accident and sickness only, unemployment only or for accident, sickness and unemployment together. This along with your age and the amount you wished to cover each month would go towards setting the premium. If you take out age based cover then this means the younger you are the cheaper you get your protection. In the past many first time home buyers who had taken on huge borrowings could not afford to cover their mortgage, with age based cover they can. The amount you choose to protect is the amount that is paid back tax-free when you have to claim. All payment protection specialists would allow you to insure up to a certain amount each month and this is set out in their policies terms and conditions which should be available on their website.

Mortgage protection in the UK would begin to pay out after a certain length of time of unemployment or of incapacity. Usually providers would set this amount at least 30 days and in some cases with some providers it can be right up to the 90th day. Once you have made a claim on the cover you would then have a certain length of time in which to find work or make a recovery. Providers will usually sell mortgage payment protection for your mortgage which provides you with either 12 monthly payments or 24 monthly payments. This is usually enough time as the policy would allow you to concentrate on looking around for work knowing your mortgage payments were safe of to make a full recovery and get back to work.

Mortgage Protection UK

When you take into consideration what could happen if you are able to keep up with the repayments of the mortgage you can see why paying a small premium each month for mortgage protection UK cover is essential. In the very least you would see your credit rating being affected if you are late or miss a mortgage payment. As this is the very first thing that all lenders deciding whether to give you credit look at your chances of obtaining credit in the future are severely affected. It also takes a lot longer to repair your credit rating and find yourself credit worthy again than it does to see it decline.

If you miss a couple of payments then the lender will expect you to come to an agreement with them to pay off what you owe while at the same time catch up on the arrears. As you have not got an income and do not know when you will find work or recover and get back to work this would be impossible. The lender would therefore have no option but to take you to court and seek repossession of your home. Without a steady income and no chance of catching up the judge could grant the lender possession of your home and you would be given an eviction date, if you are not out of the property by this date the lender will apply to the Court and have bailiffs remove you.

Payment protection in the past has earned itself a bad name. In 2005 the Office of Fair Trading highlighted many problems with policies including high cost and mis-selling. While mis-selling did occur consumers have to realise that in the majority of cases problems occurred when cover was sold alongside mortgages, loans and credit cards. If you take out protection after being given expert advice from a standalone payment protection provider then the cover would work in the way it is designed to work.

Finally, if you already have existing mortgage insurance cover, do bear in mind that you do not have to stay with your current provider. If you find a better deal, in most cases you can switch providers – and pay less for the cover!

A mortgage protection UK policy can provide a financial safety net – choose yours with care.