If you are planning to take out a UK mortgage, you should also plan what insurance protection you need as well. There is a bewildering array of insurance policies that are out in the market. This can be quite confusing for the first time buyer. Here is a quick run down of the types of insurance that you should consider.
Buildings Insurance - This will protect you if you house is seriously damaged in some way e.g. a tree falling on it. All lenders will insist that you have buildings insurance, so you won't be able to get a mortgage without it. If you live in a flat, there will be buildings insurance arranged jointly for the whole property. This is often paid out of a central fund for which you will contribute a service charge to.
Life Insurance - Contrary to popular opinion, life insurance is not necessarily compulsory when you take out a mortgage. Many lenders will not insist on it, but it is a good idea. Think how you would pay your mortgage if you or a partner were to die. Check with your lender or on the Key Facts Illustration document to see if there are any compulsory insurances that need to be taken out with your particular mortgage product.
Mortgage Payment Protection - this will allow your monthly mortgage to be paid if you are off work sick for a period of time. Again this is not usually compulsory, but maybe worth considering.
Here's a tip that could save you money on your insurance. If you are going through an independent mortgage broker they will find the best UK mortgage deal on the market for you. But many are tied to one insurance company. So the insurance that they offer you is not necessarily going to be the cheapest. It is always worth shopping around to see if you can get a better deal.
| Discover how to get the best mortgage deals in the UK by visiting http://www.ukmortgagefacts.co.uk. Get the list of mortgage lenders in the UK. |
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