(Note: The following information is general guidance, and not specific
to any product provider - independent article by Simon Christopher):
Should you Buy Mortgage Payment Protection from your
Lender? by Simon Christopher
So, you've done your home work and found the best mortgage
for you with a great rate that should save you money.
This is where many borrowers let their guard down and
end up paying way over the odds for insurance sold to
them by their new lender.
Whilst, Mortgage
Payment Protection Insurance can be a financial life
saver should you be unable to work through illness, injury or even
redundancy, some borrowers are paying a significant proportion of their
monthly payment to the lender in insurance premiums.
Mortgage Payment Protection Insurance or MPPI for short is a protection
plan for mortgages which helps you to make your repayments for a specified
period of time should you lose your job or fall ill so that you are
unable to work. This ensures that you do not lose your home or your
property, and can pick up pretty much where you left off when you have
recovered.
It seems pretty obvious that if you can afford the monthly premiums,
this cover can be a good investment in your financial future should
the worst strike, which is why we insure anything anyway. Whilst MPPI is not compulsory, it can certainly come in handy and help you through
the rough times and even help you to keep your home. Before you head
to your lender to sign up, though, there is something that you should
know.
Lenders are not obligated to tell you that you can buy mortgage payment
protection from many different sources including the internet. Without
this vital bit of information, many consumers buy this cover unaware
that they can potentially save themselves thousands of pounds over
the term of a mortgage. Of course, at the time, most applicants are
so focused on being granted the mortgage they pay far less attention
to the value of any related insurance they are offered.
Therefore, buying MPPI from your lender can mean a lot of wasted money
that could easily be saved by shopping around for cover from other
providers. In such a competitive market, many insurance companies offer
payment protection plans to help cover your mortgage and will often
be able to provide premium rates that are significantly lower than
those offered by mortgage lenders for exactly the same or even better
cover.
So, do not let your mortgage lender fast talk you into signing up
for a payment protection plan that you do not have to buy from them.
The commissions these policies can pay are often significant which
can mean you receive a very well motivated sales pitch. Hold your ground
and politely tell them that you will consider it, and remember to explore
your options by using a broker or by comparing companies on the internet.
You are almost certain to find a company or two that satisfies your
requirements with nothing more than a simple internet search. Just
be sure to know what you need, read the small print and take advice
from an independent expert if you are unsure.
About the Author
For more money saving tips and customer reviews of mortgage payment
protection insurance, visit http://www.uk-insurance-index.co.uk/mortgage-payment-insurance-1.html.
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