Could You Benefit From Mortgage Unemployment Insurance?

It is essential to keep on paying your mortgage, even if you lose your income to redundancy you would have to make the payment somehow. If you did not then you are looking at the lender choosing to take possession of your home through the courts. With this in mind you need to consider whether you could benefit from taking out mortgage unemployment insurance.

The Council of Mortgage Lenders predicts that by the end of 2008 over 45,000 homeowners will fall victim to repossession by the lender. This is based on the fact that by June this year there had already been over 18,000 repossessions by mortgage lenders and these people were evicted from their homes. By getting behind on just a single payment the lender would send out a letter, if you missed another you would have to come to an agreement to catch up on what you owe. However without an income you would not have the money to pay.

Mortgage payment protection provides an income that was tax-free once you had been unemployed for a number of days, which varies with the provider you are taking cover with. Some will ask you wait for 30 days and others could ask you wait up to 90 days. However, some providers will also backdate cover to the first date of you being unemployed. Once the policy has started to provide you with an income it would then do so for a certain period of time which is set out by the provider you are taking cover with. Some providers will give you an income that lasts for 12 monthly payments and other providers might give you 24 monthly payments.

Of course many homeowners believe that the State would step in and help by providing a replacement income to pay the mortgage. You would have to be eligible to receive help from the State and this means you would have to be eligible to claim income support. You must also not have savings over a certain amount and also not have a partner living with you in full time work. Even if you were eligible to claim help the benefit you would receive would only be towards the interest part of the mortgage and you could have to wait for many months before you would receive any money.

Mortgage unemployment insurance is a far better option and a more reliable safety net as once you have checked the terms and conditions for the exclusions you know you would be able to claim. All ethical payment protection specialists provide all the information you would need for you to ensure that a policy was suitable on their website. A lack of information when taking out cover in with the borrowing is what led to many problems in 2005 when the Office of Fair Trading and the Financial Services Authority began an investigation. It was found that the cost of buying a policy with the mortgage was extremely high when compared with standalone payment protection providers. Along with this policies were sold to those who could not hope to claim against them.

© Source: findinarticles.com/Author/61047-Simon-Burgess.html

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