Compulsory Insurance and conditional insurance for mortgages and help available
When it comes to Mortgages, a Compulsory Insurance policy is a mandatory insurance policy that must be provided in order to comply with the mortgage conditions.
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Here we detail the two aspects of compulsory insurance policies that will be demanded by a mortgage lender as conditional insurance. We also go on to explain how we can help with a mortgage along with its associated compulsory insurance, whatever your circumstances.
Table of Contents:
Compulsory Insurance and mortgages
So, compulsory insurance may be viewed from two aspects:
- a policy type that must be entered into and provided in order to comply with the conditions of a mortgage, and
- a policy which the lender insists on arranging through their insurer
Thus, it can be seen that as Buildings Insurance is always mandatory, and if the lender also insists that the buildings are insured through its own insurer's policy, then in this case, the buildings insurance is both compulsory and conditional.
The only compulsory insurance demanded by the mortgage lender nowadays is Buildings Insurance. Without the buildings being protected in the event of loss or damage by fire, flood, lightning, explosion etc., the lender's security for the mortgage funds they have advanced to the borrower could be at risk.
Conditional Insurance and mortgages
Although the practice is frowned upon, thankfully, there are very few mortgage lenders in the marketplace that actually make it a condition of the mortgage that borrowers must purchase insurance from them. However, many lenders charge a fee if you do not purchase their own insurance product. This may be a one off charge, usually of between £25 and £50, or a charge levied annually whilst the mortgage is in place.
Help available from Shire Direct
Hopefully, that has explained how insurances may be both a compulsory insurance and conditional insurance with regards to mortgages and we have answered any initial questions you may have had.
If you are looking for a mortgage or remortgage, why not talk to one of our friendly and professionally qualified Mortgage advisors on Freephone 08000 282 281 (lines are open seven days a week, from 8am 'til 10pm) or enquire online at any time. We can often help even in the trickiest of circumstances, so get in touch - we'd love to hear from you!
The overall cost for comparison is 9.8% APR.
The actual rate available will depend upon your circumstances. Ask for a personalised illustration. APR variable and based on a usual case. Most customers are likely to receive a lower rate or the same rate as our overall cost for comparison rate - learn more about APR.
There are no upfront broker fees.
However, a fee may be charged on successful completion. An indication is that on conforming cases (straightforward applications with no or minimal adverse credit) a fee may be charged of up to 1% of the amount advanced, typically £795 and will depend on your circumstances.
For non-conforming cases (where case research and processing may be more complex due to adverse credit or unusual circumstances), a fee may be charged of up to 3% of the amount advanced, typically £1,995.
THINK CAREFULLY BEFORE
SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED
IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
Adding existing debt to your mortgage will increase the repayment term and overall cost.
Are you worried and becoming stressed because you are having problems getting a mortgage or remortgage? Worry and stress no more! Here at Shire Direct we provide tailor made mortgage solutions to suit you, and can usually help with all kinds of circumstances including...
Remember, we're here to help, and would love to hear from you!
Shire Direct and Shire Direct Mortgages are trading styles of Shire Processing Centre Limited which is
Authorised and regulated by the Financial Services Authority in respect of regulated mortgage products and general insurances.
Registered No: 302389. Commercial funding and Secured Loans are not regulated by the FSA.
Licensed Credit Brokers. Consumer Credit Licence Number: 349999.
Shire Processing Centre Limited is registered under the provisions of the Data Protection Act by the Information Commissioners Office: Registration No: Z6795249. Registered in England & Wales. Company number: 2732202. Telephone calls may be recorded for training, monitoring and security purposes. All applicants must be aged 18-years or over.