It was 1989 and I decided to take the leap and buy my first property. As an estate agent I knew property was a good investment. So how could I lose? But there were no buy to let mortgages

Then There Was None

No one could have known the crash that was just around the corner.When I applied for my mortgage (pre the financial crash) the bank manager asked me to come in for a chat.
He gently suggested insurance against possible repossession.

The Options Were Few

Well my choices were few. Correction, I had only two options and one of them meant no mortgage.You can probably guess what I did next. I took the supposed “advice” and signed the papers.But at least I had the protection of the insurance so how bad could things get?If you want to know what happened next go to mortgage insurance and read the conclusion to my mortgage disaster.

You need to check carefully how much cover your insurance policy provides.If there is anything you don’t understand ask for clarification. If you are still not happy get third party advice.There are times when insurance can really save your backside. I just get really angry with companies that claim to offer great cover only to try all they can to get out of making payment when you call on them to help.You can find further advice on insurance and general buy to let mortgages on the Hayes Mortgage Solutions website.

It didn’t take long before a manageable mortgage of 7.5% jumped massively to 16%It was very hard to make the payments and I really couldn’t see anyway out. What could I possible do to survive this?And when you have the very real possibility of unemployment too.

Don’t panic it really doesn’t help. If you are repossessed in reality it’s just a house. If you stay focused you can buy another.

Seems Like a Tall Story

So what’s the plan when the inevitable repossession comes?Now I could have tried positive thinking to get me out of this mess but there’s positive thinking and there’s the debt that mounting while you practice thinking positive thoughts. All the time with one eye on the increasing balance. The negative balance. The one I would have to pay back. And who knows how long this will last. Could I actually end up bankrupt? At this point I’m still only twenty one.

The Mortgage Nightmare.

Needless to say many sleepless nights followed. And what sleep I did get was far from enjoyable. It almost seemed easier to stay up watching late night TV. Anything to keep from allowing my mind to visit my mortgage hell.

Quick Get Out The Insurance Policy – We need IT!

So did the insurance save me? Did it hell. The insurance it turns out was to protect the bank not me. It covered the banks cost of repossession my home! And that wasn’t the end of it either. Having repossessed my home the bank proceeded to sell it at auction far below market value. They then pursued me for the shortfall, some sixteen thousand pounds.

So I paid for the insurance and the bank got protection. You work it out.

Filed under: Finance

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