spanish Mortgage Life Insurance Confusion Costs del Sol

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13 Sep 2014 11:26 by Jayneejay Star rating. 5 posts Send private message

A Mortgage has been pre approved for us by banco Sabadell spain..

But.... Their life insurance .. Is not covering the mortgage term of the 17 years,

And we are told by the broker that you cannot have a separate life insurance  ..
Yet other general insurance brokers say you can ..

The mortgage term is 17 years and we are only getting cover for the term of 10 years.

This is in no ones best interests and we are so confused about it 

Mortgage is actually for 163,000€ property we interested in is 240,000€ 

They are wanting to add and extra 18,900€ for a 10 year (not 17 year)  life insurance cover for the both of us but to only cover 71,000€  not the mortgage amount .. 
adding this 18,900€ on top of the 163,000 mortgage  making it 181,900€

Scary situation..
We are ages 51 & 50

anyone have any info at all ..

 

 





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14 Sep 2014 09:16 by Jarvi Star rating in Halifax UK and Sucin.... 727 posts Send private message

My advise to you is to avoid the life insurance altogether if you can.

We have a mortgage with Sabadell. A condition of the mortgage is that we took out Life Insurance with them. Unlike yours ours will cover for the full term of the mortgage, however it is an absolute rip off. We are paying almost 1000 euros a year for the insurance cover, and it goes up every year even though the amount owing on the mortgage goes down. I can get the same life insurance cover for around £220 a year in the UK. If anyone knows how I can get out of this rip off situation please let me know.





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14 Sep 2014 09:41 by Jayneejay Star rating. 5 posts Send private message

Hi jarvi

 

thanks so much for replying

we have been told by broker its complusary... To be included ....added on top of the mortgage and spread over the term, but its not even over the term ..

sounds like the UK mis sold scam doesnt it..

when did you get your sabadell mortgage was it recently or a few years ago..

my next question to them is life insurance with the same bank but separate annually keep the mortage a serperate outgoing..

but we have asked this before and got no no no ..

jay   





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14 Sep 2014 09:53 by Jarvi Star rating in Halifax UK and Sucin.... 727 posts Send private message

jay

We got it in 2008. It was supposed to make the mortgage cheaper, however having paid around 5000 euros so far I know we've been ripped off. If they had suggested adding ther lump sum at the start of the mortgage I would definetley have refused. Are you getting a mortgage through a broker? If so they will be getting a massive commision or worse still you could be saying goodbye to your money. I have never ever heard of a life insurance policy where you pay all the premiums up front.

Try get a mortgage from another bank or broker, I would.





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14 Sep 2014 10:03 by Jayneejay Star rating. 5 posts Send private message

hi Jarvi

our quick story.. We bought a property here in 2007 when prices sky high, paid cash for it.. ( no mortgage)

sold it and lost half our money as property prices dropped.. We had to sell it as moved to different part of spain now.

so now need a mortgage to buy again..

Yes it was via a broker.. And we spoke to 3 and all the same .. Non mentioned this life insuance in the beginning, they inform you of that when the banks said yes as pre approval show you the term and figures and sneak this life insurance on top.. Never explained initially.. ( totally wrong) 

so i realise the commissions on the life insurance can be up to 50% i am told  ..

also .. Small print on life insurance .. Check it all..

Although we have residencias .. We are not classed as residents as salary not paid through Spain system.

we have read ( not sure if true) hopefully some one may comment ) if push comes to shove and god forbid we need to claim on life insurance .. Small print may say no... As not classed as residents ..

all scary stuff

we are looking at other options but non are very easy

 

jay 

 

 

 





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14 Sep 2014 12:27 by Jarvi Star rating in Halifax UK and Sucin.... 727 posts Send private message

Anyone on here got any ideas?





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14 Sep 2014 18:43 by JackieKippax Star rating. 4 posts Send private message

Hi

My husband and I bought in 2007, no Life Insurance included in mortgage about 2 years later the Bank added life insurance, we were not consulted, needless to say we contacted them but were told we had to have it, we were naive but at the time the cost was not too high, over the years it went up and up, until 2012 when it was abt 1000 euros, visits to the bank / emails ignored etc, so eventually I went to Maria's firm, having seen some of her other advice on the forum.

I had to provide all my mortgage documentation etc and once they had reviewed for a fee which was extremely fair they got the Bank to agree to remove completely the Life Insurance, we were more than adequately covered in the UK with Insurance so did not ever need this rip off... the Bank even had the cheek in the desparation to keep us paying to offer to reduce the fee for reduced life insurance, when in reality we never had any legal requirement to have it in the first place.

I realise this may noy help someone taking a mortgage now, but for those like us who bought several years ago when it was not normally compulsary to have Life Insurance, challenge them but do via a good solicitor if we had gone to Maria intially we could have saved a few thousand euros...

 

 

 





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14 Sep 2014 19:18 by Jayneejay Star rating. 5 posts Send private message

Hi Jackie kippax

wow thanks for sharing your experience..

it doesnt encourage anyone this does it..

the UK have all this mis sold policy claim back going on..

yet here they knowingly rip you off maybe charging us up to 50% commisions on these so called compulsary mortgage life insurances they insist on..

its not pointed out at first intitial enquiry either, you can go down the route with the brokers, this figure or warning is not mentioned, quotes and terms are sent to you, you think oh thats not too bad, then.. when you go further, providing all the neccesary documention proof of earnings etc, its still not mentioned and six weeks later the final terms etc has an additional umpteen thousand euros slapped in it.... and no copy of the policy to read nothing at pre approval stage ..

then you still have to ask them ' whats this' 

its either pay it or go away..  'if you dont wamt our life insurance you dont want our mortgage'

and to think in your case they just helped themselves two years later ..OMG ..

i have read articles about people getting a mortgage with no compulsary life insurance mentioned, then when notary day comes they are asked for 7,000€ life insurance there and then pay it now, or it doesnt happen .. 

i just hope more people tell their experiences as this is wrong and we need to warn people, what they are up against, whilst planning their dreams ... 

 

jay 

 

 

 

 

 





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08 Oct 2014 08:13 by fortenmerd Star rating. 1 posts Send private message

Life insurance will be classified into five types such as term insurance, endowment policy, money back life insurance policy, group insurance and unit linked insurance policy. Each of them has different benefits. Before we can choose any of them, We must completely go through its rules and regulations.

 

commercial auto insurance houston tx

 

 


This message was last edited by fortenmerd on 08/10/2014.


This message was last edited by fortenmerd on 08/10/2014.



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10 Oct 2014 14:17 by mariadecastro Star rating in Algeciras (Cadiz). 9290 posts Send private message

Legal Questions? Speak to Maria Direct

http://www.eyeonspain.com/blogs/costaluz/12255/Legal-tip-1102-Mortgage-and-related-products-Obligatory.aspx

EL BLOG DE MARIA

YOUR DAILY SPANISH LAW REPORTER. HAVE IT WITH A CAFE CON LECHE. WWW.COSTALUZLAWYERS.ES

 

Legal tip 1102. Mortgage and related products. Obligatory? 
06 February 2014 @ 18:59 
 

Three useful tips to take into account when negotiating a mortgage:

1. Only obligatory Insurance by Law ( Mortgage Law) is a  home insurance that provides basic coverage against flood, fire or earthquake. There are certain rules that can make this insurance cheaper: coverage needs to be made on the house but not on the soil or content . House has an specific value " for insuring purposes" on the valuation.

2. Any other insurance offered by the Bank is not obligatory. Banks offer better interest conditions for the mortgages when these are hired with them or associated entities. This is a legal practise.

3. It is always possible to waive the insurance taken "by mistake" when you can prove lack of information or deception by the Financial entity. 

Costa Luz Left

Zahara de los Atunes - Entrada (2005), Zahara, Cádiz, Costa de la Luz, South western Spain, by Juan Jimenez Martinez, at flickr.com



_______________________

Maria L. de Castro, JD, MA

Lawyer

Director www.costaluzlawyers.es

El blog de Maria



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08 Nov 2014 10:57 by Smiley Star rating in San Pedro de Alcanta.... 2502 posts Send private message

Smiley´s avatar

Hi Jaynee Jay - I think you may have contacted me after you received your mortgage offer. As Maria states the only legal requirement is for home insurance however the reality is that Sabadell insist on single premium life cover if you want their mortgage - it has been challenged in court and the court has found in favour of the plaintiff but to date I have yet to hear of Sabadell rectifying the situation or reimbursing any single premium insurance payers. I guess at point of completion one is in desperation to secure the mortgage to complete the purchase and so the client proceeds. I think I also said at the time that we always notify a client at very first quote the existence of the single premium life cover and recommend a lower LTV product in order to avoid this (there arent many lenders offering 70% to non Spanish taxpayers). I might also add that it is not the broker that benefits from the high level commissions paid on these single premium policies but it is the bank itself - exactly in the same way that UK banks were paid excessive commissions by insurance underwriters to sell the add on.



_______________________

Smiley - patrick@marbellamortgages.com  www.marbellamortgages.com   www.comparetravelcash.co.uk




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