Mortgage Insurance - alternatives?

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IKnowNothing
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Mortgage Insurance - alternatives?

Postby IKnowNothing » Sat Nov 24, 2018 11:22 am

Our mortgage application at Caixa Bank has just been approved. It turns out both the bank and our lawyer agree that a mortgage insurance (life insurance) as well as a Damages/Fire/House isurance are mandatory according to Spanish law. The banks' quote for the mortgage insurance is 86 Euros/month minus a 0.2% discount on the interest rate. Net cost appx 78 Euros/month or 936 Euros/year.

The lawyer also tells me that Caixa have to give their approval if I want to buy the insurance from some other company, since the terms and conditions have to be equivivalent to Caixas' insurance.

I've asked for mortgage insurance quotes from several companies, have recieved two so far: 120 and 500 Euros/year. Quite a difference compared to the bank.

Any advice here? Should I go for the banks' mortgage insurance? Any pitfalls if I don't?

Caixas' home insurance isn't so cheap either, 360 Euros/year, unclear if this quote was net cost or gross as we'd get a 0.2% rate discount here too. But I'm more inclined to accept their home insurance offer. Are there any companies offering a combined Mortgage/Home insurance, btw?

wollie
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Re: Mortgage Insurance - alternatives?

Postby wollie » Sat Nov 24, 2018 2:49 pm

Go with Caixa for a few Months and then change, its easier in my opinion to tick all of their boxes until you have the money.
All you woll need do is cancel insurance d/d and present the new policy to the bank, if at this stage they ask just explain
price difference.
You are not obliged to take their insurance unless different in Spain but i doubt this be the case.

IKnowNothing
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Re: Mortgage Insurance - alternatives?

Postby IKnowNothing » Sat Nov 24, 2018 8:10 pm

Good idea. Hope it's "doable". The Home insurance they sell seems to be a three year insurance. Don't know about the mortgage insurance, will have to check.

wollie
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Re: Mortgage Insurance - alternatives?

Postby wollie » Sun Nov 25, 2018 10:04 am

The only insurance that i think is mandatory is life cover with minimum amount the amount of money owing to the bank.
I suspect they selling you more than you need and i never heard of 3 year cover. The fact that they are selling Monthly suggests to me that you can opt out anytime, they may `say you signed uo for 3 years but i doubt if this hold-up once you have the necessary cover to cover "terms and conditions" of loan. Insurance cover is not mandatory by Spanish law but the bank need all the boxes before they pass on the cash.
I had an instance with a bank 10 years ago where they sold me life insurance and it was twice the price elsewhere, i changed after a few Months, they were unhappy but all banks are effers...

markwilding
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Re: Mortgage Insurance - alternatives?

Postby markwilding » Mon Nov 26, 2018 9:16 pm

If there was a discount on condition that the insurance was taken out with the bank, there might be some sort of penalty if you cancel it

scotty
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Re: Mortgage Insurance - alternatives?

Postby scotty » Mon Nov 26, 2018 10:51 pm

I was a life broker for 35 years. What you want (if cost is important) is "Decreasing Term Assurance". So the death benefit reduces in line with your balance each year.
Next up price wise is "Level Term Assurance" where the cover remains at the amount borrowed for the full term.
Then finally "Convertible Term Assurance" where you can convert the policy at any time to a "Whole Life Policy" to run for the whole of your life.

IKnowNothing
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Re: Mortgage Insurance - alternatives?

Postby IKnowNothing » Tue Nov 27, 2018 4:10 am

Wow! Thanks. Will definitely check that up. We already have rather extensive life insurances and don't want more than the minimum coverage required by law, or the bank.

Any ideas on insurance companies/brokers to contact?

IKnowNothing
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Re: Mortgage Insurance - alternatives?

Postby IKnowNothing » Fri Dec 21, 2018 8:27 am

Some feedback: We chose Liberty Seguras for home and mortgage insurances.

elusive
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Re: Mortgage Insurance - alternatives?

Postby elusive » Fri Dec 21, 2018 6:10 pm

As others said dont believe its the law that you take out such insurances.theres been lots of cases where banks have been in trouble for telling people they must take out xy or z .


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