Mortgage protection refused

I own my site and have full planning permission. My first mortgage application resulted in refusal as the company would not grant me mortgage protection. The reason for this is because I have a heart defect called hypertrophic cardiomyopathy and take medication (beta blockers). Other than this I am a healthy 26 year old. Stable income. Single.
Can anyone advise me on how to go about getting mortgage protection so as to get money to build my house.
Also what's the legal standing on this situation? Can all companies refuse me or does one have to oblige?

Talk to your lender - There is a process for proceeding with the mortgage without insurance for those who are declined for medical reasons, but you need to be conscious that you are bearing substantial risk yourself.

Hello Roisin,

It may be worth putting in an application for mortgage protection with other life companies, as not all have the same underwriting guidelines, speak to a multi agent or AA that would have agencies all life offices, and would could save yourself time and efford, they could submit a case to most life companies on your behalf. Also find out who has declined you before you start as this may help the broker

Going directly to the Consumer credit act 1995 shows
[broken link removed]

This states you do not have to have mortage protection where

( b ) loans to persons who belong to a class of persons which would not be acceptable to an insurer, or which would only be acceptable to an insurer at a premium significantly higher than that payable by borrowers generally,

Basically if you cannot get life insurance or the cost is prohibitive then you cannot be required to take it out. Now I don't know what the banks position on this will be , whether they will give the mortage or not..

I think you can bypass having mortgage protection if you have been turned down by more than 3 life assurance companies. Perhaps a mortgage adviser/broker could advise you.

If you have no spouse or dependents, it shouldn't be a problem for the bank to proceed without the protection. You will have to sign a waiver. You may have to get two more life assurance refusals (in writing) before you can proceed.

No, you only need one letter of decline to waive life cover however the lender *can* withdraw the mortgage offer if there is no mortgage protection in place. Do you have any dependents? Who is your mortgage offer with? (the banks are more likely to be conservative than the PLC's and building societies). Do you have any existing life cover or death in service benefit with your employer?

Sarah

www.rea.ie

ETA - sorry, just reread your original post. Given that you are single with no dependents you should be able to waive the life cover with all the lenders without a problem. Good luck with the house!

Thank you for your input and advice. I shall decide on my next move and then no doubt come looking for more.

Roisin said:

I own my site and have full planning permission. My first mortgage application resulted in refusal as the company would not grant me mortgage protection.

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mortgage protection is normally only mandatory when the loan is 70% of the value of the property or more (house + site) so if you got a valuer to say in writing that the house would be worth 300k when built on a 100k site then the site is 33% of the value and the 200k to build the house is 66% of the value so you therefore may not even have to have insurance.

Also what's the legal standing on this situation? Can all companies refuse me or does one have to oblige?

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find a lender that does not require minimal insurance, namely Mortgage life insurance and get the mortgage below their ceiling.

owning a site with FPP means its possible.

Rosin,

I had a similar heart problem to yourself and had to get a doctors letter explaining the situation. I went through a company called alan kidd in nutgrove for my insurance it was onaly about €20 a month for a joint policy

Hello,

Interesting question! All Life Companies use different criteria when approving or declining a mortgage protection policy. Some companies even have different criteria for underwriting level term and decreasing term cover.( i.e. they may approve you for level but decline you for decreasing term)

Go through an insurance broker explain that you have been declined due to medical history by company XYZ Ltd. I know many clients who have been declined by certain life companies only to get approved by one of their competitors simply because their underwriters rate you in a different risk catergory.

As Sarah stated below: "Do you have any existing life cover or death in service benefit with your employer?"

If so the Mortgage Provider may accept this plus a signed life waiver and a letter of decline from the life company!


Let us know how you get on.......

(Always seek personal financial advice from a Qualified Mortgage Broker and take all advice on these boards with a pinch of salt)

Pexus1976 said:

(Always seek personal financial advice from a Qualified Mortgage Broker and take all advice on these boards with a pinch of salt)

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Always watch out for the super duper extra gold plated products that you most certainly do not need but that some qualified brokers seem to insist you need. Brokers make their money selling and not advising