What you must know about Buy To Let insurance

Posted by Credit expert

January 31, 2009

Back in the late 80’s I bought my first property. I was working as an estate agent at the time so I knew property was the way to go. How could I go wrong property was a solid investment, everyone knew that. But there were no buy to let mortgages back then.

Then There Was None

No one could have known the crash that was just around the corner.Before the bank would give me a mortgage I was summoned for a “chat” with the branch manager.
He very kindly explained that I should take out some insurance just in case the unthinkable happened.

The Options Were Few

What choice did I have? He was saying all be it in a very friendly manner, take the insurance or you don’t get the mortgage.You can probably guess what I did next. I took the supposed “advice” and signed the papers.But at least I had the protection of the insurance so how bad could things get?If you would like to read the conclusion of this mortgage disaster go to mortgage insurance and learn what happened.

Make sure you read the insurance terms and check what it covers.Don’t just take the sales persons word for it. Get it in writing and seek advice if you are unsure where you stand.I am not anti insurance just cautious after my experience with so called indemnity.If you want more advice why not check out the Hayes Mortgage Solutions website.

It didn’t take long before a manageable mortgage of 7.5% jumped massively to 16%Ouch! Yes it really did hurt, in more ways than one. What do you do when your mortgage payments double but your income stays the same.Add probable unemployment to the problem of extra expense and it all seems so hopeless.

It’s vital to stay calm. Contact your lender and keep them informed of your financial problems. And remember that you can recover and buy another house.

Yes I Was Repossessed

So if you reach court stage and the mortgage company are asking for possession what do you do?Now I could have tried positive thinking to get me out of this mess but there’s positive thinking and there’s the debt that mounting while you practice thinking positive thoughts. All the time with one eye on the increasing balance. The negative balance. The one I would have to pay back. And who knows how long this will last. Could I actually end up bankrupt? At this point I’m still only twenty one.

Mortgage Bad Dreams

Needless to say many sleepless nights followed. And what sleep I did get was far from enjoyable. It almost seemed easier to stay up watching late night TV. Anything to keep from allowing my mind to visit my mortgage hell.

Quick Get Out The Insurance Policy – We need IT!

So did the insurance save me? Did it hell. The insurance it turns out was to protect the bank not me. It covered the banks cost of repossession my home! And that wasn’t the end of it either. Having repossessed my home the bank proceeded to sell it at auction far below market value. They then pursued me for the shortfall, some sixteen thousand pounds.

So I paid for the insurance and the bank got protection. You work it out.

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