Home Buyer Protection Insurance – Is it something I should consider?
Buying a home is stressful enough without the financial worry of a sale falling through. Home Buyers' Protection Insurance helps cover legal, survey and mortgage lending costs should your purchase fall through.
What is Home Buyers’ Protection Insurance?
So you’ve found a home you want to buy and are ready to put in an offer. Then you start paying for solicitors, surveyors, mortgage advisers and other services to help you with you purchase. This soon adds up to thousands of pounds – a big investment that could be lost if the purchase falls through.
Home Buyers’ Protection Insurance can protect you in the event of being gazumped, or if the seller changes their mind.
What is the risk of a purchase falling through?
1 in 3 property transactions are reported to fall through
You find a house, make an offer that is accepted by the seller and then it’s yours, right? Buying sounds straightforward until you actually try and do it. Frustratingly, conveyancing completion statistics indicate that one in three property transactions fail. And, a recent survey conducted by emoov in August 2015 indicates that 13% of buyers experienced gazumping during their purchase (down from 22% in 2014).
Common reasons for a sale falling through include:
- The seller changes his mind and withdraws the property from sale
- The mortgage lender valuation is lower than the accepted offer
- The mortgage lender insists on rectification work
- The survey identifies necessary repair work
- The buyer withdraws due to a change in circumstance (such as job relocation or redundancy)
Key Benefits of HOA Home Buyers’ Protection Insurance
Cover costs £50 and provides:
- Conveyancing fees protection up to £750
- Survey and mortgage valuation fees protection up to £500
- Mortgage arrangement and lenders fees protection up to £250
- Gazumping protection if the offer accepted is at least £1000 higher than yours
- No excess
- Policy is valid for 120 days
Premium packages are available from £60 and provide up to £500 cover on moving fees.
Longer cover for 180 days is also available.
Home Buyer’s Protection Insurance cover applies in these circumstances:
- The property owner withdraws the house from the market
- Local authority search indicates the property is subject to a compulsory purchase order
- The property valuation is less than 90% of the accepted offer
- The mortgage lender applies a retention on the loan which is more than 10% of your accepted offer
- Ratification work is required by the mortgage lender
- The property is damaged during the period of cover and it costs more than 10% of the property value to repair
- Redundancy or relocation of full employment (unless redundancy is voluntary)
- The vendor is not legally entitled to the property
Restrictions to cover:
- Property in England, Wales or Northern Ireland and be a permanent construction; policy holder must be over 18 years of age
- The purchase of the property must not be subject to a contract race or sealed bids
- You must use a solicitor or licensed conveyancer to conduct the conveyancing of the property
- You cannot be reimbursed for costs incurred before the policy start date
- You knew that the house purchase would not complete before you bought HomeBuyer’s Protection
- You deliberately caused a delay which caused the house purchase not to complete
- You withdraw from the house purchase for reasons not covered by the policy (you can’t just change your mind for instance)
- You must not have had a survey carried out on the property before the policy start date
- You are aware of a previous survey having been carried out in respect of the property up to 90 days prior to the start date, that may give cause for the house purchase to fail
- Where you are able to obtain a refund on your fees
- In the case of redundancy, you took voluntary redundancy, are self-employed or a company director or partner of the company giving notice of redundancy
Get Home Buyers’ Protection Insurance with HomeOwners Alliance
We’ve teamed up with Qdos Broker & Underwriting Services Limited to bring you protection during the home buying process.
Our Home Buyers’ Protection Insurance provides cover for conveyancing, mortgage and survey fees incurred by an insured purchaser when their purchase of a property falls through.
With many reasons causing a property purchase to fall through, no one likes being left to foot the bill for the wasted costs. By reimbursing these fees, a purchaser who has Home Buyer’s Protection Insurance is provided with peace of mind should the purchase not go ahead.