Query relating to my Dad’s mortgage protection policy.
He took out a re-mortgage 5 years ago; he is 59 now and has approx. 20 years to run on re-mortgage. The money was used basically for living expenses when his work dried up, so he had the cash in his bank and is paying the re-mortgage from this – not a great strategy I know but he had been self-employed for 20 odd years and didn’t think he was eligible for social welfare.
Anyway the upshot of it all is he has approx. 20K remaining on deposit and a balance outstanding of 170k on the re-mortgage. Currently he is receiving social welfare (for him and my mother – who doesn’t work) and is up to date with all payments, bills etc… he has no other loans. At the moment he has a shortfall each month of about €600 which he pays from the money on deposit. My sister and I are committed to helping my parents out and can hopefully help him out by transferring €200 – 400 a month to him.
Ok getting to my question now, he is paying approx. €350 per month in mortgage protection (smoker) on a reducing balance to cover the re-mortgage. I’m wondering if perhaps we should cancel this as it is costing a lot and if he outlives the mortgage he will have paid over €80,000 to this policy. Will the bank be notified if he cancels it? I don’t see how he can afford it, would he be better saving the €350 per month? He would be a bit nervous about cancelling it, in case the bank starts sending letters.
We were thinking that maybe he should take out a life assurance policy for say €100k and so if he does die my sister and I can use this to help us pay the mortgage until the house can be sold (i.e. if my mother remains in the house) he has another life assurance policy which will be paid to my mam if he dies, which we don’t want to include, we are considering that as her money for living expenses, if that makes sense. He has a small pension which will pay out about €15k in 6 years and then €2.5k per year afterwards.
We have taken his monthly expenditure down as much as is possible, but are concerned about the €600 per month shortfall when there is only €20k left on deposit. I would appreciate any advice regarding the mortgage protection?
He took out a re-mortgage 5 years ago; he is 59 now and has approx. 20 years to run on re-mortgage. The money was used basically for living expenses when his work dried up, so he had the cash in his bank and is paying the re-mortgage from this – not a great strategy I know but he had been self-employed for 20 odd years and didn’t think he was eligible for social welfare.
Anyway the upshot of it all is he has approx. 20K remaining on deposit and a balance outstanding of 170k on the re-mortgage. Currently he is receiving social welfare (for him and my mother – who doesn’t work) and is up to date with all payments, bills etc… he has no other loans. At the moment he has a shortfall each month of about €600 which he pays from the money on deposit. My sister and I are committed to helping my parents out and can hopefully help him out by transferring €200 – 400 a month to him.
Ok getting to my question now, he is paying approx. €350 per month in mortgage protection (smoker) on a reducing balance to cover the re-mortgage. I’m wondering if perhaps we should cancel this as it is costing a lot and if he outlives the mortgage he will have paid over €80,000 to this policy. Will the bank be notified if he cancels it? I don’t see how he can afford it, would he be better saving the €350 per month? He would be a bit nervous about cancelling it, in case the bank starts sending letters.
We were thinking that maybe he should take out a life assurance policy for say €100k and so if he does die my sister and I can use this to help us pay the mortgage until the house can be sold (i.e. if my mother remains in the house) he has another life assurance policy which will be paid to my mam if he dies, which we don’t want to include, we are considering that as her money for living expenses, if that makes sense. He has a small pension which will pay out about €15k in 6 years and then €2.5k per year afterwards.
We have taken his monthly expenditure down as much as is possible, but are concerned about the €600 per month shortfall when there is only €20k left on deposit. I would appreciate any advice regarding the mortgage protection?