Home Buyers Protection Insurance: What is it and do you need it?
Those who have had the experience of buying a home will know just how stressful it can be; never mind having the sale fall through. This is where Home Buyers Protection insurance comes in; it helps cover your legal, survey and mortgage lending costs should your purchase fall through for a number of reasons.
In this post we’ll tell you all you need to know about this type of cover.
What is Home Buyers Protection Insurance?
It is a form of cover which protects you in the event of your home purchase falling through by enabling you to claim back the expenses you may have incurred in the process of buying a home.
What exactly does it cover you for?
This form of insurance will generally allow you to recover your upfront expenses if any of the following happen:
- Your offer is gazumped
- The seller changes their mind and takes the property off the market
- The mortgage lender valuation is lower than the accepted offer
- The survey identifies necessary repair work
- The mortgage lender insists work needs to be carried out
- You are forced to withdraw due to unexpected changes in circumstances (such as job relocation or redundancy)
However, there is a limit to the amount you can claim back. You’ll be able to claim a maximum of;
- £1,000 in conveyancing fees
- £750 in survey/valuation fees
- £500 in mortgage/lender fees.
When should you take out the cover?
You can purchase Home Buyers Protection Insurance as soon as you have had an offer accepted on the property you want to buy. But it will also have to be within 14 days instructing your solicitor to start on the conveyancing work.
Once you have taken it out, the cover will be valid for 180 days.
Is there an excess to pay?
No, you will not have to pay an excess if you make a claim.
What about in Scotland?
Even though gazumping is not an issue in Scotland, as an offer must be honored once it has been accepted, there are still other reasons which can lead to a deal falling through.
It is up to you whether or not you feel you need to take out Home Buyers Protection Insurance.