Does switching mortgages require new protection policy?

[fullerand]

Hi,

Have been considering switching mortgage for a while (want to fix our ECB+0.95% tracker with ICS).

Unfortunately before we got the opportunity to look into it, my girlfriend (with whom I share the mortgage) was diagnosed with cancer. We've been presuming that it's not worth pursuing the switch as we'd have to either open a new mortgage protection policy or renew the existing one, which would be loaded due to her illness - is this accurate?

Thanks

 

[LDFerguson]

Check how much cover is currently on your existing Mortgage Protection life assurance policy, and the remaining term. If you arrange your new mortgage so that the amount and term tie in with the existing policy, you can carry your policy over to be used for the new mortgage, rather than having to increase or replace it.

Liam D. Ferguson
www.ferga.com

 

[fullerand]

Thanks Liam, will look into it.

 

[alfabeta]

You should also check if your original lender will release the policy document prior to the mortgage being repaid as many lenders will not release the money until such time that they have the original policy in their hands in order that they can assign it. Bit of a catch 22 !!

 

[Cashstrapped]

Unfortunately before we got the opportunity to look into it, my girlfriend (with whom I share the mortgage) was diagnosed with cancer. We've been presuming that it's not worth pursuing the switch as we'd have to either open a new mortgage protection policy or renew the existing one, which would be loaded due to her illness - is this accurate?

Thanks

Firstly sorry to hear about your girlfriend, hope she's on the way to a speedy recovery.

Now I don't mean to sound like cashing in on hardship or anything but have you looked at your current mortgage protection to see if it pays out anything based on your girlfriends illness before moving to another provider. I only ask this because I know of someone who was struggling with mortgage repayments following an illness and was on the point of repossession, he went down to try sort something out with his mortgage provider and it turned out his specific illness was covered by the Mortgage Protection he had in place and this has never even crossed his mind.

Best wishes for the future.

 

[LDFerguson]

You should also check if your original lender will release the policy document prior to the mortgage being repaid as many lenders will not release the money until such time that they have the original policy in their hands in order that they can assign it. Bit of a catch 22 !!

The same principle applies to the deeds of the house. You get around it by getting a solicitor's undertaking to hand over the original policy when the old mortgage is redeemed.