Declined for Mortgage Protection and about to close purchase

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ogtmoreno

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Hi ,
I need a bit of advice as of how to proceed here and realistically what are my chances in this situation from your experience/ knowledge.
basically my wife and I went sale agreed and Signed the contracts on a house, we were shopping around cover when hit us on one of the questions my wife had to routine exams coming up ( letters came the week prior two before) as a result we were declined / postponed. We tried all insurances and went to the bank’s one (Irish life through EBS) . When doing the form I was ok but my wife needed further checks.
I will leave the main points of our situation and what we are trying to do, but time is running out as the keys should be ready in 3 weeks or so.

Me-38, PAYE, main earner and with no issue getting cover.
- have through work death cover for x4 times my salary and long illness protection salary giving me over 70%
-have a life insurance from my previous mortgage already cleared worth over 74k that covers death and serious illness

Wife-37, self employed/ paye- issue getting cover due to two appointments for check ups with cardiologist due to one event palpitations during pregnancy around 2 years ago.
1 baby

mortgage: around 250k 48% LTV
Term:25 years
Monthly repayment is 500 euros below my monthly savings.
So, we want to apply for a waiver and we are trying the following :
  • getting a letter from the specialist with whom she has the appointment saying that the checkup is routine one and that from his previous test and evaluations he has no concerns about her health, having no life threatening issues. This is to be provided to Irish life and the bank
  • Looking for private appointments to get the test and result before drawdown in hopes this will satisfy the insurance.
  • We have savings that could throw in and reduce the mortgage to 190k -200k pushing the LTV to below 40%, this amount is under the 3.5x if I were to get the mortgage on my own, the monthly payment if we did that could be reduced by 400 to 500 euros monthly if we kept the same 25 years term.
  • If we reduced the term to keep the same amount as on our original mortgage, we could reduce it by 10 years. Reducing the risk from their side.
  • I have proof that I can save over 1500 euros regularly with 1500 being the minimum with statements for over 12 months backing this up.
We want to show the bank that the decline on my wife’s protection and the low chance of her getting seriously sick or god forbid, passing away, is not impacting our payment capabilities and that me as the main earner is the one that should have cover , which I do, plus also I have different other protections in place. Also adding that in a matter of 4 months all test will be done publicly or privately even earlier and as soon as they are done and test show everything is clear we can add her to the policy if the insurance is happy.

my questions are around:
  • what is the best approach when bringing all this to the bank to get a waiver on her ,they obviously have my financial information as I provided it to them, but what is more important to them our joint capability for repayment , both cover or what else could be on their tick box list.
  • Do I need three decline letters or just with the postpone from IL done through the bank would suffice.
  • Would any insurance take any of the information above into account to provide cover to my wife?
  • how fucked are we as of getting a decline from EBS regarding the waiver?

thanks
 
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I feel I have answered this same query elsewhere :)

But anyways I wouldn't even bother going with that much info to bank initially, ask them for the waiver based on the postponement/refusal you have, as you say they have your income details already. Don't offer to reduce the mortgage down as a first offer unless that is what you actually want to do yourself, save that for in case they do decline the waiver. I don't think anything is going to speed this up medically for you quickly enough for what you want. Better to concentrate on trying to get a waiver from a lender and then you can be sorting her insurance when the issues are cleared up.

Not sure if you have gone with a broker or direct, if broker then ask for their experience with the different lenders re waivers, I'm always saying it but UB were great in that regard!
 
Thanks! we went directly with the bank. We just wanted to show that her appointments are not due to any serious condition but a routine checkup, thus getting the letter from the specialist as proof. Regarding the finance front we were thinking on putting more after as we are going variable, but wanted to clear any worry on their side around repayment capability on my side alone proving that in the worst case scenario anything were to happen while she is out of the policy, I would still be able to do so. We will call tomorrow to follow up on the IL application. Do you know if EBS is any good with the waivers on mort. Protections? Read a few posts saying they were good but those are over 2-3 years old. Thanks again
 
No idea about EBS I'm afraid, no experience with them. I don't think the bank are going to have any interest in consultants letters etc, there is no one there who will make a decision based on that sort of stuff in my opinion. The letter of postponement/decline should cover their ass under the Consumer Credit Act and gives them a watertight reason for allowing a waiver, they need to have either a waiver or life cover in place on drawdown date to be compliant with the Act. Knowing or thinking they might get the cover in a few weeks/months time is not the issue really. Your income seems strong enough to hopefully swing it.
 
Have you tried other providers? I got my mortgage protection with Royal London, applied for it online. My husband had heart palps due to stress from divorce, they accepted all the medical questions we gave no further investigations needed.
I would go try other providers today asap.

Make sure you over insure by a few bob and extend the term to keep you covered for any payment breaks you might take.
 
Sarah Ryan said:
Make sure you over insure by a few bob and extend the term to keep you covered for any payment breaks you might take.
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I don't think that this is something that should generally be advised or done. Most people stick to their mortgage repayment schedule and taking out the cheapest decreasing term cover for the actual amount borrowed should be sufficient. If additional life cover is needed or desired then take it out separately and not assigned to the lender.
 
@ClubMan with 3 house purchases and working in finance (touching on mortgage protection / life cover at times) I would disagree.
But each to their own.

If you take payment breaks, and your term is extended you could be left without cover if you do not factor that in at outset. Royal London made a point of pointing it out to me when I was doing my business but it was already in my plans. A couple of euro extra for piece of mind and no extra hassle a few years down the road.

Most people do plan to stick to their schedule but this little thing call life dictates other plans sometimes.
 
As I said if you do decide to take out excess cover then taking it as standalone cover not assigned to the lender is arguably a better idea as it offers flexibility. But I don't think that most people should be taking excess cover. If there's a small shortfall in mortgage protection life insurance cover and the policyholder dies then the implications are not serious. The lender isn't going to repossess or force a sale.
 
It's far more likely that the monthly repayment is increased than the term is extended after a payment break. The interest rate on the mortgage protection policy already includes a margin so that you would still have surplus cover even after taking a break. Sounds like Royal London were "upselling" to be able to charge you for more than you need.
 
We are currently in talks with RL and IL, we have a letter from the specialist saying basically she is healthy and the reason of the test is a common symptom that is usually benign and he expects all results to be normal as she is extremely healthy. We got appointments for today also to get the tests done should they decline that letter. The issue is that the bank every time I update them about this and ask them if we have to take the route of the waiver given that we can reduce the mortgage to be within the 3.5x my salary only and provide me cover and a waiver for her whilst the conditions of the insurance are met if that would be under their opinion a viable solution, they always say not to jump the gun and wait for all other routes. I don’t know if they don’t offer waivers or they just want my wife in the policy rather than a more secure deal. I can afford the monthly repayments as the monthly payment would be around 1/4 of my salary and well below my confirmed monthly regular savings
 
The bank would rather have both of you on a higher mortgage, than only you on a smaller mortgage. They make more money and have more protection.
 
@Corola No not upselling at all, this was my plan to do this. They flagged something I was planning on doing anyway so a win in my book as it was aligning with my wants and needs.

I like to plan ahead for any future issues, and I know I have all my basis covered based on my experiences. I took out the independent policy and have assigned it to the bank for the purposes of the mortgage.

An extra 1 to 2 years on the term is leaving nobody bankrupt.
 
So got a call from IL and no surprise that despite having the letter from the specialist saying she is fine and expects the results to be ok. they said that until the test aren’t finished and she is in the clear there is no cover. So would this count as a refusal to the bank given that this was through their life insurance? Or will they need letters of decline from other insurances ? And if I get those , would that affect for when we add her into the cover ? Thanks for all the ideas
 
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It's a postponement, grounds for a waiver. In theory they don't need more of the same but the granting of a waiver is up to the lender's discretion so they can ask for anything really. But in general all they want to do is ensure their file stands up to scrutiny should it be audited for any reason. I would push them on the waiver to get the drawdown done if closing the sale is imminent with the assurance that when everything is sorted she will reapply for the cover required.
 
I had similar issues more due to being in the middle of covid and doctors not responding to questions.

I understand there are 3 or 4 providers. They do ask if you have ever been refused, it was a bit confusing as we were getting requests for further information or offers for one rather than refusals. I found the below list online, someone can confirm they are all providers and not agents.

We were first refused by VHI who were just selling Zurich insurance. It's all very well using a middle man when it goes well but it added confusion and delays when trying to understand what they wanted. I think Royal Londan also refused by Aviva approved with a 50% loading on one of us. Not bad, some people have multiples as a loading. I think smokers get a 50% or more.

Personally I would be applying to them all with the intention of getting an approval. They all have different risk profiles and different exposures to different risks that might influence their decision. By all means talk to a broker, Lion.ie are ment to be good. Unless you fell they have something to add I would be tempted to submit the forms yourself as they you control everything. I didn't use Lion but I found brokers to be another middle man who could delay things, ours use only work a 3 day week...
  • Aviva.ie
  • Irishlife.ie
  • Newireland.ie
  • Royallondon.ie
  • Zurich.ie
 
faketales said:
Personally I would be applying to them all with the intention of getting an approval. They all have different risk profiles and different exposures to different risks that might influence their decision. By all means talk to a broker, Lion.ie are ment to be good. Unless you fell they have something to add I would be tempted to submit the forms yourself as they you control everything.
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I'd second this, they might load you by 50% but even that is better than an outright refusal. Try around other brokers - you are not obliged to take the banks insurer.
 
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