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[L108]Late On Mortgage Payment

by Simon Burgess, Sim

If you want the best deal on cheap mortgage payment protection insurance then without a doubt the only way to go is by purchasing shopping around and getting the cover independently from a specialist provider. A specialist provider can not only help you to make substantial savings when it comes to the premiums charged for the policy, but will also be able to ensure you get the policy most suited for your needs and, if they are reputable, should provide free advice.

When looking for a policy, never be tempted to take what the high street lenders and banks offer you when you take out your mortgage without first doing a bit of research. The cover doesn't have to be taken alongside your mortgage regardless of the pressure techniques the lender might use to persuade you it does. While it's true some lenders will insist that you do take out cover to protect the loan, you can choose where to buy the cover from. High street lenders in the majority simply don't have the experience needed when it comes to selling mortgage payment protection and, as recent finings from the Financial Services Authority have proved, sales techniques are very poor. This has led to wide spread mis-selling of policies and has left many unfortunate people not being able to make a claim on their policy when needed.

All policies will have exclusions and these are often hidden in the small print and these are what you should be aware of when it comes to taking out the policy. A mortgage payment protection policy is taken out to ensure that if you should come out of work through an accident, prolonged sickness or unforeseen unemployment then the cover will provide a tax-free monthly income which means you can still pay the mortgage. However there are certain illnesses which are excluded and medical conditions that you have at the time of taking out the policy will normally be excluded, this is why it's important that you check the small print of a policy.

When it comes to getting the best deal on a mortgage payment protection insurance policy then you simply have to go independently to a specialist for it, this is probably the only way to get a quality product while making savings on your premium.

If you want peace of mind that you would not be at risk of losing your home to repossession then consider taking out mortgage payment protection. A policy would provide you with an income after so many days of unemployment or incapacity and would payout for a certain length of time which is set by the provider. You would not have the worry of falling into arrears with the mortgage and the lender taking you to court to seek possession of your home. You would be able to make a recovery or look around for work knowing that your mortgage payments were safe.

Lenders will not repossess at the drop of a hat, but they will as a last resort and if you cannot continue paying your mortgage while catching up on the arrears then repossession is a strong possibility. Repossession means losing your home and the memories built up in it. It also comes with stigma of eviction and of course your credit rating is in tatters, which makes borrowing again extremely hard in the future. One way of ensuring that you are not faced with this possibility if you lose your income is to keep up with the payments of the mortgage by taking out mortgage payment protection. Relying on any help from the State is not the best option. You would have to meet criteria set out and even then you would only receive help with the interest part of the mortgage. You could also expect to wait several months before you would see any benefit. If you were relying on savings as a way of keeping up with the mortgage then savings could soon deplete if you were to be unable to work or could not find work for many months.

Mortgage payment protection can be taken cheaply with a standalone provider. This is a better way to take out protection than having it included into the mortgage. High street lenders charge highly for their protection when adding it onto the mortgage at the time of borrowing. A standalone specialist will also provide you with all the information you need to ensure that a policy is right for you. You are able to choose the level of protection that is most suitable. You could insure against accident, sickness and unemployment together, accident and sickness as a standalone policy or just for unemployment. This will reflect on the cost of the cover as will your age and the amount you wish to protect of your mortgage repayment.

When your policy would begin paying out and for how long would depend on the provider. Some policies would provide you with an income tax-free after the 30th unemployment or incapacity date. Other providers could ask you defer from claiming until the 90th day and some could back pay to day one of you being made unemployed or of suffering accident and sickness. Once the term of the mortgage payment protection policy has been reached then the policy would expire regardless of whether you had found work or recovered and gone back to work.

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Simon Burgess has sinced written about articles on various topics from Mortgage Insurance, Finances and Income Protection Insurance. Simon Burgess is Managing Director of the award-winning British Insurance, a specialist provider of low cost ?> cheap mortgage payment. Simon Burgess's top article generates over 74000 views. to your Favourites.