What is the process for Mortgage Protection Re-assignment?

lau1247

I'm new to this mortgage switching process so please bear with me. Letter of offer is ready and received.

My question is what is the process for Mortgage Protection re-assignment? Do I need to contact the Mortgage Protection underwriter or what is the process?

luketitz

lau1247 wrote: »

I'm new to this mortgage switching process so please bear with me. Letter of offer is ready and received.

My question is what is the process for Mortgage Protection re-assignment? Do I need to contact the Mortgage Protection underwriter or what is the process?

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No shilling or blatant advertising please.

phormium

It's unlikely though if switching that you have the original policy document if it's assigned to bank you are switching from and you are not taking out a new one.

I thought but could be wrong that it was included in the undertaking from solicitor to new bank as old bank won't release assignment until their loan is cleared so it can't be done ahead of drawing down the new mortgage.

Henry Ford III

If it's a classic mortgage protection policy (decreasing term assurance) it's unlikely that the original term and sum assured will fit the new loan.

That being the case you should effect new cover and simply give the policy document to your solicitor for assignment. The old policy can then be released and are free to cancel it at that point.

Trish56

If you are doing a straight switch as in outstanding balance and term then your existing mortgage protection policy should suffice. For the new lender you need to get a statement of benefits from the Life Company and then your Solicitor will deal with assigning that policy to new lender when the mortgage is cleared. Lenders may differ so best to check with your new lender exactly what they need.

If you are borrowing extra or increasing the term you more than likely will need to provide a new policy.

lau1247 wrote: »

I'm new to this mortgage switching process so please bear with me. Letter of offer is ready and received.

My question is what is the process for Mortgage Protection re-assignment? Do I need to contact the Mortgage Protection underwriter or what is the process?

fafy

lau1247 wrote: »

I'm new to this mortgage switching process so please bear with me. Letter of offer is ready and received.

My question is what is the process for Mortgage Protection re-assignment? Do I need to contact the Mortgage Protection underwriter or what is the process?

We switched several times, each time it was a simple case of, contacting life assurance provider, and asking them to replace the name of the new bank with the old one, a letter may or may be required from yourself.

Once the change is made, with name of new bank, give a copy of this to the new bank, their requirement is that they need to be named as an interested party.

I recall, one has to do the same with the House Insurance (Buildings and contents)Policy also, eg name the mortgage bank, shown as an interested party

hanaimai

If you reduce the term when switching the mortgage, does this effect the protection policy? I know there is an impact if you were extending the term, but not sure about reducing?

Sarn

For KBC, we signed the letter of assignment with our solicitor, KBC will have it dated on the date of drawdown as it can’t be reassigned until the previous mortgage is cleared. A statement of benefits dated within the previous 3 months was also required. We then just had to confirm that we would send the original policy document on once received.

We reduced the term of our mortgage and there was no issue with the policy.

Henry Ford III

hanaimai wrote: »

If you reduce the term when switching the mortgage, does this effect the protection policy? I know there is an impact if you were extending the term, but not sure about reducing?

MMPA policies aren't flexible.

hanaimai

Henry Ford III wrote: »

MMPA policies aren't flexible.

I suppose what I meant was is there negative consequences to having a mortgage protection policy of say 28 years, but a mortgage term of 25 years? We've been overpaying our mortgage and were going to reduce the term a bit when switching, but want to make sure this won't affect our cover under the policy (if the terms are misaligned).

If there is, we will just keep the mortgage term as is I guess.

Sarn

There is no issue if your mortgage term and balance outstanding is less than what your MPP covers.

Trish56

No reducing the term wouldn't have an impact once the amount that you are borrowing is covered on the policy.

hanaimai wrote: »

If you reduce the term when switching the mortgage, does this effect the protection policy? I know there is an impact if you were extending the term, but not sure about reducing?

lau1247

Henry Ford III wrote: »

If it's a classic mortgage protection policy (decreasing term assurance) it's unlikely that the original term and sum assured will fit the new loan.

That being the case you should effect new cover and simply give the policy document to your solicitor for assignment. The old policy can then be released and are free to cancel it at that point.

Thanks, no I have a dual life level term (non decreasing). The current policy will still be valid so long as I keep paying. New switching mortgage is deliberately requested to have the same years in line with original (current) mortgage.

lau1247

Trish56 wrote: »

If you are doing a straight switch as in outstanding balance and term then your existing mortgage protection policy should suffice. For the new lender you need to get a statement of benefits from the Life Company and then your Solicitor will deal with assigning that policy to new lender when the mortgage is cleared. Lenders may differ so best to check with your new lender exactly what they need.

If you are borrowing extra or increasing the term you more than likely will need to provide a new policy.

Yes straight switch, essentially balance carry over to the new lender. No extra term or borrowing extra.

Noted, will get in touch with Royal London to get the benefit statement.

Thanks.

lau1247

fafy wrote: »

We switched several times, each time it was a simple case of, contacting life assurance provider, and asking them to replace the name of the new bank with the old one, a letter may or may be required from yourself.

Once the change is made, with name of new bank, give a copy of this to the new bank, their requirement is that they need to be named as an interested party.

I recall, one has to do the same with the House Insurance (Buildings and contents)Policy also, eg name the mortgage bank, shown as an interested party

Would I be right to think the name of bank changes after drawing down from new lender as Trish has said.

Thanks for letting me know about house insurance. I just checked the policy and related documents, it does include the current lender.

fafy

lau1247 wrote: »

Would I be right to think the name of bank changes after drawing down from new lender as Trish has said.

Thanks for letting me know about house insurance. I just checked the policy and related documents, it does include the current lender.

You have to action this yourself, by calling the Insurance Company, and requesting the Bank Interest, to be changed to your new lender, when the change is done, ask for a copy of the document showing this, and give to your new lender.

I would have done this in advance of drawing down from the new lender, as this is a requirement of your new lender, so they need both the Life Insurance & House Insurance assigned to them in advance, of issuing funds.

Trish56

The existing lender will not release the policy and deed of assignment until their mortgage is redeemed and the new lender will also need that policy to be assigned to them.

The Solicitor will redeem the existing mortgage from the funds issued by the new lender and then the policy will be returned to the Solicitor who will have arranged for borrower to sign a Deed of Assignment for the new lender. The Solicitors undertaking will have this covered with the new lender. Solicitor then forwards policy and deed of assignment to the new lender.

fafy wrote: »

You have to action this yourself, by calling the Insurance Company, and requesting the Bank Interest, to be changed to your new lender, when the change is done, ask for a copy of the document showing this, and give to your new lender.

I would have done this in advance of drawing down from the new lender, as this is a requirement of your new lender, so they need both the Life Insurance & House Insurance assigned to them in advance, of issuing funds.