Want to get a MortgageWould you like to take out a mortgage?
So, you've had your bid on the home you want to buy and you' ve just had acknowledgement of your mortgage commitment (great news!), so now all that's left to do is size out the insurance you need to make sure nothing is delaying you from getting the keys to your brand new home!
Having so many different types of insurances available, it is not always clear which ones you definitely need as a statutory requirement to obtain a mortgage, and which ones are optional. In contrast to what is commonly believed, you do not have to take out endowment policy to obtain a mortgage. A major reason why individuals take out endowment policy is to make sure that their family is able to continue to pay the mortgage in the case of their own deaths.
Failure to repay your mortgage could result in your home being compelled to move out and resell their home, which would not be the preferred choice at all. Do I need to know what kind of policies to get a mortgage? If you are receiving a mortgage, the only coverage you will need as a statutory requirement is building coverage.
The building policy will cover your house against all damages that need to be mended. Insurances of this kind apply only to the building aspect of your house, i.e. partitions, roofs, flooring, built-in components, etc., not to the content itself. Creditors need to know that you have building insurances as their main objective is the value of your real estate.
If, for example, a fire were to strike your home without building security to pay for the repair, the value of your home would fall so that the home would not be valuable for the amount of cash you lent it. That means that in the end the creditor would not be able to get back what he offered you for the sale.
In the end, this is why building assurance is a statutory requirement if you get a mortgage while endowment is not. Aside from that, it's a good policy to have anyway, because why shouldn't you care about what's probably your most valuable possession?