Mortgage Term Assurance (when to start / end policies)

[MovingStress]

Hi,
Hopefully someone in the know could clarify this for me (our mortgage consultant has chosen very unfortunate timing for her holiday!!)

We will hopefully be exchanging contracts today for our sale and purchase.

We have a mortgage term insurance policy ready to set off - i assume it is today we need to start it (exchange date) rather than completion when the mortgage will start - as we are liable for the cost of the new house once we have exchanged?

We have a policy on our existing mortgage. Can we cancel that one once we have exchanged (as I assume our buyers become liable to pay the cost of this house - which would cover paying off that mortgage)? Or do we need to wait until completion for some reason (& therefore pay for 2 policies until completion)

We are not due to complete for a few months, as we are buying new build.

Thanks

anyone?

You aren't liable for the cost of the new house though, are you? If you pulled out after exchange, you forfeit your deposit but you don't have to pay off the mortgage as it's not drawn down until completion. So I don't think it should start till completion?

If you speak to your existing insurance company to insure your new property from completion they will usually cover your old and new houses from exchange

Mortgage term assurance is a life insurance policy so that if you die, the mortgage will be paid off.

You therefore need it in place from when the mortgage funds have been "drawn down" and your solicitor has used them to pay for the house - i.e. when you have bought the house.

So the new policy needs to be in place from the day of completion (when you will owe the new mortgage amount) and presuming you pay off your old mortgage with the funds you receive from your purchaser, you can terminate your existing on your existing mortgage when that is paid off (which will also be the day of completion). That's assuming that the sale and purchase completes the same day.