What Is A Mortgage Insurance Guarantee Premium Question Answer
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What Is A Mortgage Insurance Guarantee Premium Question Answer

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What Is A Mortgage Insurance Guarantee Premium Question Answer What Is A Mortgage Insurance Guarantee Premium Question Answer Document Transcript

  • What is a Mortgage Insurance Guarantee Premium? Question We are buying a house for £145,000, but do not The MIGP provides no protection for you. have a deposit. We have been told by our Indeed, if the insurance company has to pay bank that they will provide a 100% mortgage, your lender, they have the right to take legal but we have to pay a mortgage insurance action against you to recover their loss. guarantee premium (MIGP) of £4,350, which can be added to our loan. This seems Unfortunately, like most insurance, you receive expensive. What is the money for, do we need no refund if your lender does not claim on the to pay it and what does it cover us for? policy. The premium can either be added to the loan or paid in cash (most people add this to the mortgage - if you had the cash in the first Answer place, you wouldn't be looking for a 100% The market for 100% mortgages is limited. There loan). are a lot fewer lenders for you to choose from. Lenders look for a degree of comfort. They feel Adding it to your mortgage does mean that that there is more chance of a client not you will also pay interest on the amount over keeping up loan repayments when they have the term of the loan. The interest payment on either no deposit or a small deposit. your MIGP will cost you an additional £260 in the first year (based A MIGP is a single-premium on current interest insurance policy that rates). The only way to protects the lender. escape the fee is either to obtain a deposit large enough to avoid the charge Lenders got their fingers burned in the 1980s (the vast majority of when house prices fell and people lost their lenders impose no fee jobs and were unable to maintain their if you have a 10% mortgage payments. Those lenders that deposit) or to choose Andrew R Dawkins ACII, provided high-percentage loans found that one of the small Chartered Insurer they were losing money as the property they handful of lenders that (Independent Financial owned was worth less than the mortgage do not impose a MIGP Consultant) secured on it. at 100% lending. As a consequence, some lenders decided not to lend to customers with small deposits, and To ask a question about your those lenders that stayed in the market for 100% mortgage or any of your financial loans imposed MIGPs. A MIGP is a single- needs, call A.R.D. Consultancy on premium insurance policy that protects the freephone 0800 028 4258 lender. It provides the lender with an important safeguard - if the lender has to repossess a home because of non-payment of the Brought to you by Andrew R Dawkins ACII, mortgage, and if the property is sold by the Chartered Insurer (Independent Financial lender for less than the mortgage outstanding, Consultant). For more advice on all your the insurance company will make up the financial matters visit A.R.D. Consultancy at difference. www.ardconsultancy.co.uk. A.R.D Consultancy. Suite 8, Callendar Business Park, Falkirk. FK1 1XR Freephone 0800 028 4258