Protecting your home and your mortgage

Your mortgage is likely to be your single largest debt and your home will probably be your single most important material possession. As part of the service at Purely Mortgages we offer not only the best mortgage for your circumstances but also the right mortgage-related insurance products to protect your home and your mortgage.

Life Assurance and Critical Illness Cover

Life Assurance is an insurance policy that pays a lump sum to the beneficiaries when the insured person dies.

Critical illness cover is often linked to the value of the loan and provides financial help if you suffer a critical illness (e.g. cancer, a stroke or some other pre-determined serious illness). The insurance company pays out a cash sum, which you can use to repay the mortgage or spend in some other beneficial way.

Some lenders will insist on you having life assurance in place, because they want to be sure that their loan will be repaid if you die. Ideally you should insure your life for the whole of the mortgage debt, so that if you die before the end of the term the entire loan is paid off.

As well as being a condition of mortgage lenders, life assurance is important as it ensures that, should you die, the property will become debt free and you are free to leave your property to your family clear of any mortgage debt.

Mortgage Payment Protection Insurance

Mortgage payment protection insurance is designed to help you meet your mortgage repayments in the event of accident, sickness or unemployment.

Did you know that 8 out of 10 homeowners do not qualify for any state help with their mortgage? If you or your partner works 16 hours a week or more or if you have more than £8,000 in savings, you will not qualify for state support. Even those who do qualify may have to wait for up to nine months before the benefit is paid and 4 out of 5 claims suffer shortfalls, usually because the payments only cover interest and not capital.

Buildings and Contents Insurance

House contents insurance covers the cost of replacing possessions lost or damaged due to unforeseen events (as detailed in the insurance policy). Contents insurance policies tend to be very comprehensive, so they will cover more or less everything that you own

When you take out a mortgage to purchase your home, the lender will insist you have house buildings insurance. If the property were to fall down, the lender would want to know that there is insurance to cover such a catastrophe. For this reason, most people are sold building insurance at the time they take out a home loan.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.