Are you looking for the best deal on the market for your mortgage protection for first time buyers?
To keep it nice and simple, first time buyers should focus on;
- What mortgage protection policy should I buy as a first time buyer
- What companies are the best for first time buyers
- What’s the best cover for first time buyers
Stressful isn’t the word trying to understand everything!!
What is Mortgage Protection
Mortgage protection is a basic type of life insurance that pays off your mortgage should you die during the term of your mortgage.
Mortgage Protection is a requirement for most banks in Ireland, but maybe (Banks discretion) waived in the event of;
- A person who purchases a rental or investment mortgage.
- Health reasons.
- If you’re over a certain age when loan is approved. In most cases this would be over 50.
John takes out a mortgage protection policy for €300,000, the mortgage protection/life assurance is assigned to the lender/bank and the purpose of this policy, is to clear debt to bank if John dies within the term of loan. The mortgage protection policy reduces over time so the idea is that once the mortgage ends, the mortgage protection policy will end too.
Getting a mortgage for €300,000 over 35 years;
- You die in 5 years’ time and have an outstanding €264,000 on the mortgage – your policy pays €264,000 to your bank.
- You die when the mortgage is in it’s last year and have an outstanding €1,000 on the mortgage – your policy pays €1,000 to your bank
!!!It’s there to make sure that the loan is repaid back to your bank if you die!!!
What is Life Assurance
Life assurance (or also known as term life insurance) differs from mortgage protection because it can leave lump a sum amount for your family, estate whereas mortgage protection is all about paying the bank!!
John (he is a busy fella this john) is getting a mortgage for €200,000 over 22 years.
- John dies in 3 years’ time with €180,000 remaining on the mortgage – the policy will pay €180,000 to his bank and €20,000 to his family.
I would personally try to separate the two
I would recommend taking out a mortgage protection policy with the bank and then having a personal policy for yourself and your family!! You can look at serious illness cover too but again it’s all about cost and being able to afford the policies!!
I hope you’re like these guys and not Zzzzzzzzzzzzzzzzz!!
Please get in touch with me if you need any help!! It’s tough work trying to understand everything between solicitors, banks, and estate agents when buying your new home..
Looking forward to our chat