According to the Central Banks recent Residential Mortgage Arrears and Repossessions Statistics Release, there were circa 97,000 private residential mortgage accounts for principal dwelling houses (PDH) in arrears of more than 90 days at end-June 2013. For this same time period, approximately 79,000 PDH mortgage accounts were categorised as restructured.
Restructuring arrangements include a switch to an interest-only mortgage; a reduction in the payment amount; a temporary deferral of payment; extending the term of the mortgage; and capitalising arrears amounts and related interest.
Restructuring arrangements will also have an effect on the insurance policies people have in place for their mortgages. Perhaps the most tragic circumstance is that in which a person dies and the surviving spouse then faces a repossession order. Sometimes when money is tight the first thing to go is the ‘life assurance’ as it is seen as un-necessary. However, this is a mistake, as in the unfortunate event that you die and don’t have life assurance in place then your debt passes to your survivor. The only way to prevent this is to make sure you keep up-to-date on your life cover payments.
Make sure that your Life Policy is accurate, if you have omitted any ‘material facts’ it may turn out that you won’t get paid or you receive only a very small sum / premium refund. This could happen if you said you were a ‘non-smoker’ when your records show that you actually are a smoker. As well as this, you should make sure that you are not underinsured as this can have an impact on clearing a mortgage in the event of death [if you did an ‘unsecured top up’ this could be the case or changed to interest-only payments. In both instances your loan amount would have been altered from inception in comparison to your original protection plan that was taken out against your mortgage from day one].
Protection policies offered by life companies in today’s market have been updated in structure and benefit to ensure a consumer’s need is met in the event of death or serious illness at competitive pricing. Please contact us at Quintas Wealth Management to avail of a free review to ensure that you and your family are protected at the best price.
Lynda McAuliffe, Client Relationship Manager