You could make savings on mortgage cover if you chose to shop around
As with anything you buy if you shop around for it you can make great savings and mortgage cover is the same. Each year homeowners wanting to protect their mortgage repayments pay well over the odds for protection by having it added in with the mortgage at the time of borrowing. If they were to shop around online and take a quote from ethical payment protection provider British Insurance they could save as much as 40%.
A policy can be taken by protecting up to so much of your monthly mortgage repayment, which your provider would pre-agree upon when you take out the policy, against the possibility of being unable to work through accident, sickness or unemployment. This sum of money would then be paid back as an income each month for the term set by the provider.
The income you received would go a long way to allowing you to keep on top of your mortgage repayments and stop you from falling into mortgage arrears. Mortgage arrears can lead to you losing your home if you are unable to come to an agreement with the lender to repay. Most lenders will give you some leeway by allowing you to payoff what you owe as long as you are able to continue meeting the agreed repayments. However without an income coming into the home this would not be possible and they would take steps to seek repossession of your home.
Some providers such as ethical British Insurance will offer mortgage cover with no excess. They backdate the benefit to day one of you being unemployed or from suffering incapacity and allow you to claim from day 30. You would then be secure for 12 months as this is how long British Insurance would supply your income. When shopping around for the protection always check to find out when you would be able to claim as there are some providers that could ask you wait as long as 90 days. You also need to check to find out how long you would receive payments as some providers would continue providing you with benefit for 24 months.
Mortgage cover is a better lifeline compared to relying on State benefits to provide you with the sum to maintain your mortgage repayments. You would have to meet certain requirements set out by the State in order to be eligible to claim and even if you were you would only get a sum of money towards paying the interest part of the mortgage repayment. Currently you would also have to wait for several months before you would see any benefit and by this time you could already have fallen into mortgage arrears. If your safety net is savings then again you should think twice as savings might have to be relied upon for many months and they might not last.
