Re-Mortaging Existing House & Life Assurance

[louthman2013]

I may have to re-mortgage my existing house to buy out my spouse due to a marriage breakdown. The house has an existing mortgage of 100k with 15 years to run and with life assurance of 200K. I would have to re-mortgage for a further 100k with my existing lender, but would need a longer loan of say 25 years at least. The loan to value ratio with the re-mortgaging would still be very low (<50%). Question.; Will I be forced to take out life assurance to cover the full term of the new loan, or will lenders allow a top-up mortgage without matching life assurance where there is very good equity in the house? This house will not be a family home. Thank you in advance.

 

[wbbs]

Depends on the lender, some will allow you use a waiver for non family home property, others may insist on it as a condition of the loan approval.

 

[PadKiss]

Hi Louthman2013
Life cover is normally required for your home but you may be able to waive the life cover if its an Investment however this is now not the case with all lenders. However a couple of points, being a male its very likely your life cover will now be cheaper following the gender directive in Dec 2012, also the life assurance premium is a deductible expense from the rental income so this could make it quiet inexpensive to get, it is also worthwhile as it leaves the asset free of debt on your death. However if there is a health issue it might be worth checking out before approaching your bank on your options re the loan and its term etc investigate getting the cover first and the price and then you will know it will cost nothing to propose for it hope this helps Padraic.

 

[louthman2013]

This is not actually an investment property- wife and kids would be living in another home and I would be living in this home; Looks like life assurance will be obligatory?