January 28, 2009 at 9:51 am #54690
We are just about to complete on a mortgage with Bankinter for a property that we already own in Spain. We didnt take a mortgage out when we bought the property and are taking a cash out mortgage now to release some money. After waiting 6 months for the relevant paperwork to get sorted and get to the offer stage – Our lawyer in spain is due to sign the papers on our behalf next monday. The bank has now emailed me with some forms to be signed. They have now said we have to take their life cover to cover the amount borrowed – which is fine but its over 400 euro a month for a 67000 mortgage!!!!! Does anyone know if we agree to this so that we can complete on the mortgage can we then cancel the life ins after?? Or is there a way they can force us to pay back the money they lend us if we cancel the life ins. Dont have a problem with covering the mortgage but the life cover is a rip off.
Thanks on advance for any advice
January 28, 2009 at 11:25 am #89704InezParticipant
Be careful with this. Banks have tried this one loads of times, a friend of mine is a broker and used to get this removed.
However in recent times, banks are also trying to make money and insist on these covers.
I suspect they will refuse you the loan if you refuse the cover and you must check the small print as you may have to keep it for a certain period of time therwise they fine you. They may take a years premium up front as well from the money you have raised.
Get your lawyer to explain the small print to you.
January 28, 2009 at 11:51 am #89707mariosParticipant
If you are saying 400 month for life insurance then that figure is outrageous,we have just took insurance to cover our mortgage outstanding amount and it was 800€ a year for cover on €235,000 equates to 60 odd euros a month with 200€ setup fee.
January 28, 2009 at 12:20 pm #89708
Ozgirl, you will find this interesting:
January 28, 2009 at 12:51 pm #89709mariosParticipant
Ours was a condition of being allowed to swap from a repayment to a Interest free for 2 years.
January 28, 2009 at 4:21 pm #89716
its over 400 euro a month for a 67000 mortgage!!!!!
That surely can’t be correct! Are you sure that’s not the annual premium you have been quoted?!
January 30, 2009 at 1:15 pm #89771
ozgirl: While I agree with Inez postings. First of all are you sure that it not €400 per year. The insurance premiums also depends on the age, health, life style etc of the borrower.
As it seams that you making an equity withdrawal the banks sees you as rich & would like to squeeze all they can. If you can delay in your equity withdrawal until the mortgage market come to some senses it would be better. On the other hand if you wish to convert into £, than this a good time.
At the end of the day as this is an equity withdrawal and it seams not a necessity you have to calculate your cost benefit.
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