askpaul explains about Mortgage Protection:
In this video and content piece, we’re going to have a chat about the insurance policies you need when you’re taking a mortgage from a lender. So, why do you need insurance? Well, you need insurance in case anything goes wrong and you don’t have to foot the bill, the insurance companies will pay. This is a good idea. It’s a legal requirement in Ireland, which is good as well in my opinion.
Let’s talk through them. The first one’s a Mortgage Protection policy. A Mortgage Protection policy is a Life Assurance contract. So, if you have a case where a couple is going for a mortgage, you’ve got two people and the mortgage is €300,000. Both of those people will be required to have what’s called a Mortgage Protection policy. In the event, one of them dies, the Life Assurance company will have a €300,000 policy on them and that policy would pay the lender, if something happens.
It’s a really good idea because if somebody does die, the income is taken away from the household. There might be an affordability issue when paying the mortgage. So, it’s a great get out of jail card for the mortgage company and for the surviving person in the house to make sure that there’s no mortgage in place.
Now, this is important. If you have Mortgage Protection, you need to get in contact with askpaul to review that mortgage protection policy. If you’re going for a mortgage, you, again, need to contact askpaul to check that Mortgage Protection policy. The reason is, I don’t want anyone reading this content to ever go to the bank to take out the Mortgage Protection policies. All the banks in Ireland will deal with two companies. That’s Irish Life and New Ireland.
In my opinion, those policies aren’t the best Mortgage Protection policies. They’re all the same price. Mortgage Protection policies are the same price, no matter where you go because all the different companies will price match down to the lowest price. So, it’s a bit of a weird market environment when it comes to Life Assurance. They’ll all price match each other.
Then, what you’re looking for is behind the price, what’s the best policy that’s suitable for you and your family? Please don’t go to the banks to get these policies. Make sure you contact askpaul, and we will be able to talk you through the best plan that suits you and your family. The cost is not going to be a factor, trust me in that. They’re all the same price anyway. You need to get the best policy that suits you. So, very important, if you have a Mortgage Protection policy, get in contact and we will review it for you. More importantly, if you’re going for a mortgage, make sure you use us to get your Mortgage Protection policy.
The last thing we want to talk about on this insurance stuff is Household Insurance. You are also required to have House Insurance. So House Insurance is there in case the house burns down, that it can be rebuilt. And very, very simple. There are loads of different internet sites available or websites available on the internet that will give you Home Insurance.
A couple of things to look out for is the excess. When it comes to Home Insurance, the excess is the amount that you have to pay towards each claim. The requirement from the bank is that you have Building Insurance. That’s basically if your building burns down. You can also put on these policies what’s called Contents Insurance and I recommend everyone take content insurance too, in case anything does go wrong such as a fire or theft. That means that anything that’s not fixed to the building – tables, chairs, sofas, your electrical stuff, your beds, all that kind of stuff – that’s covered in your Contents Insurance and that’s paid out usually €50,000, €20,000 or €25,000 worth of Contents Insurance.
Make sure you do take that when you are looking for your Building’s Insurance. The reason you need to be careful on both of these policies is that the bank will not issue the cheque to your solicitor when you draw down for your mortgage if you don’t have those two policies in place. So, it’s very important that when you start the application process at the very beginning, you also apply for those two policies.
The last thing you want is on the last day when you’re drawing your cheque down from the mortgage company to buy your new property, to have a situation where you haven’t got one or both those policies in place, and it delays everything by a week or two. I have seen that happen in the past and it’s a nightmare for all parties involved. Make sure you are prepared. Get in contact with us and we can help through the whole process, as always. If you have any questions, please don’t hesitate to ask.
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