Majority of home buyers failing to cover themselves for the worst
Leading property finance specialists, One77 Mortgages, has revealed that a high number of home buyers are failing to protect themselves for the worst by not taking out additional life or critical illness insurance.
A survey of over 5,000 current homeowners found that despite almost record levels of mortgage product affordability, savvy home buyers are still searching for the best deals with 46% opting for a mortgage broker instead of going direct to a bank or other lender.
Of those that opted for a broker, 65% made the smart decision of enlisting the help of a whole of market broker in order to get the very best deals available on the market. Perhaps worryingly, 30% didn’t know if the broker they used was whole of market and could have missed out on the best deals available to them.
While home buyers may be more switched on when it comes to the best rate for their financial position, the majority are choosing to ignore other vital aspects when obtaining a mortgage that could see them in financial difficulty further down the line.
Just 35% opted for life insurance via their broker, while even less opted for critical illness insurance (26%).
Personal health aside, just 13% of those asked stated they had taken out building and content insurance, with the majority again choosing not to.
Managing Director of One77 Mortgages, Alastair McKee, commented:
“Many home buyers, especially those doing so for the first time, will often go straight to their current banking provider for a mortgage quote and aren’t aware of the restrictions this can place on the potential deals available to them.
It’s encouraging to see that the majority are opting for a whole of market broker in order to find the best deal. Despite the current levels of affordability, who knows what could happen a year or two down the line and so securing the best rate now is a smart move.
That said, it’s worrying to see how many are continuing to take a risk, particularly where life and serious illness insurance is concerned. We appreciate that buying a house is probably the most expensive purchase you will make, and it may feel like you’re being upsold additional insurance cover that isn’t really necessary. However, when the worst does happen it can plunge people into severe financial difficulty if they don’t have the relevant protection, and we’ve seen this happen on numerous occasions.”
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Q1. Did you use a mortgage broker for your purchase? Or did you go directly to the lender?
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Answer
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Response Percent
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Broker
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46%
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Direct
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19%
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No mortgage
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36%
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Q2. Were they a whole of market broker?
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Answer
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Response Percent
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Yes
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65%
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No
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4%
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Don’t Know
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30%
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Q3. Did you arrange life insurance during this purchase?
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Answer
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Response Percent
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Yes
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35%
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No
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65%
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Q4. Did you arrange critical illness insurance during this purchase?
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Answer
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Response Percent
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Yes
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26%
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No
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74%
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Q5. Did you arrange home contents insurance during this purchase?
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Answer
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Response Percent
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Yes
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13%
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No
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87%
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