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Helpful ReplyMortgage underwriting and insurance queries

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theiopener
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2009/07/15 12:07:27 (permalink)

Mortgage underwriting and insurance queries

Anyone here know their stuff about the above?

What happens to the bank if i havent got buildings insurance and the building is no longer standing? Am i still liable for the mortgage? Can i get out of it?
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Re:Mortgage underwriting and insurance queries 2009/07/15 12:14:58 (permalink)
As per the conditions of your mortgage you would have had to have had building iinsurance, if you didn't the lender would take it out on your behalf, as essentially it's their security for the loan. did you cance; a policy or something

Festar: You can't plead poverty with 2 cars. That's like a little Kenyan chap pleading poverty with 2 packets of uncle bens rice hidden under his bed.
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theiopener
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Re:Mortgage underwriting and insurance queries 2009/07/15 12:16:33 (permalink)
I have buildings insurance.

Im just curious what happens to the lender if i dont have it. I thought the insurance only covers the building and not the loan itself.
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Re:Mortgage underwriting and insurance queries 2009/07/15 12:20:11 (permalink)
If you have a mortage and the building burns down, the insurance is used to rebuild the property to its original state. This will obviously be far less a cost of what it is actually worth, as you already own the land blah blah blah. When the builing has been reinistated this is the banks security for the mortgage again

Festar: You can't plead poverty with 2 cars. That's like a little Kenyan chap pleading poverty with 2 packets of uncle bens rice hidden under his bed.
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theiopener
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Re:Mortgage underwriting and insurance queries 2009/07/15 12:22:04 (permalink)
Thought as much.

I take it the mortgage will not go up when the property is rebuilt if the property is of a higher spec?
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Re:Mortgage underwriting and insurance queries 2009/07/15 12:27:54 (permalink) ☄ Helpful
No, you owe what you owe, The insurance you have would be to put it back to it's original condition/value. If the money from the insurance company, paid to the builders made a better job and the new house is worth more, you would see the benefit when you remortage as you will have more equity and portentially get a better mortgage deal.

Festar: You can't plead poverty with 2 cars. That's like a little Kenyan chap pleading poverty with 2 packets of uncle bens rice hidden under his bed.
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theiopener
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Re:Mortgage underwriting and insurance queries 2009/07/15 12:30:27 (permalink)
Cheers RB!
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Re:Mortgage underwriting and insurance queries 2009/07/15 12:32:41 (permalink)
no worries

Festar: You can't plead poverty with 2 cars. That's like a little Kenyan chap pleading poverty with 2 packets of uncle bens rice hidden under his bed.
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