You may have recently read our Let to Buy and Purchase Multi Million Pound Mortgage Solution case study in which our client borrowed a substantial amount in order to fund their purchase of a new country house, whilst maintaining their city flat as a pied-a-terre.
This client had a young family and worked within the financial sector, so had a fairly sophisticated understanding of the level of premium mortgage protection insurance to support this level of borrowing. As such, when Maria Deschamps, their mortgage broker, referred the client to me – the in-house insurance broker at Enness – I already had a firm understanding of the circumstances and context.
After having a discussion and working out both the goals and their lifestyle, we decided that an adequate amount of premium mortgage protection insurance for the home purchase would be to £2 million. I advised that the lowest cost solution to structure this would be a decreasing term basis in line with the rate at which she planned to pay off her mortgage with income and bonuses.
I agreed with my client that it would be a good idea to review this settlement in four years as this tied in nicely with how they forecast their financial situation would have changed. I further suggested we arrange this life insurance in trust to ensure the proceeds went swiftly to the correct beneficiary should the worst happen and I was able to make an introduction to a reputable will-writing service.
My client was very busy and time-short and consequently the bulk of this premium protection for home purchase was arranged via email as that suited their requirements. My clients are not 9 to 5, or able to attend multiple meetings, so I tailor my approach to suit.
It’s important to remember that as soon as you start your mortgage application process you should inquire about protection for home purchase services as the actual underwriting process can take up to 8 weeks. The underwriting process will usually require a GPR (General Practioner Report) which takes time to arrange. Ideally, you want to be protected when you are exchanging contracts as that’s when your liability starts – rather than leaving an interim period during which you are exposed to financial risk.
This level of protection for home purchase was secured at an excellent premium – my client was only paying circa £80 per month which is almost insignificant compared to £2 million of cover and a mortgage of even more.