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Mortgage Indemnity Guarantee


maybelline
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I have tried to understand this recently having looked it up. I understand it protects the lender and is a kind of insurance in case of default so that they get their money back.

 

My question is, taking out a secured loan against a property worth around a hundred thousand at the time, with 60 or 70K equity should it attract a MIG fee of £1000? :???: and what happens if they enter a default but make an arrangement to accept reduced payment, are they using the MIG to cover the shortfall or what?:???:

 

(sorry I am so ignorant of all this stuff but am certainly on a learning curve now)

'rise like lions after slumber, in unvanquishable number, shake your chains to the earth like dew, which in sleep had fall'n on you, ye are many, they are few.' Percy Byshse Shelly 1819

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My question is, taking out a secured loan against a property worth around a hundred thousand at the time, with 60 or 70K equity should it attract a MIG fee of £1000? :???: and what happens if they enter a default but make an arrangement to accept reduced payment, are they using the MIG to cover the shortfall or what?:???:

 

(sorry I am so ignorant of all this stuff but am certainly on a learning curve now)

 

Do you mean that you you borrowed 40K on a house valued at £100K and were charged £1K MIG? It will all depend on the lenders criteria at the time. A secured loan is different to a mortgage but the usual is MIG around 75%.

 

The MIG only comes into effect after repossesion or sale if the mortgage co loses out, accepting lower monthly payments wil lnot trigger the ins co to pay out on the MIG.

 

Hope this helps

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Hi, borrowed 7K secured against home, paid MIG of 1K then paid MIG twice again when increased borrowing to 9K, but owe 13K including interest etc.

 

I read somewhere that 8% is usual, 8% of the amount borrowed? basically I couldnt see any risk of them not getting all their money if the house was sold since there was enough to cover the morgage and the secured loan.

'rise like lions after slumber, in unvanquishable number, shake your chains to the earth like dew, which in sleep had fall'n on you, ye are many, they are few.' Percy Byshse Shelly 1819

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  • 1 year later...

still do not understand this MIG or HLC situation? how can you pay MIG on such a small sum compared to equity, as you say it is to protect them but surely not nec if borrow 10% of equity value.

'rise like lions after slumber, in unvanquishable number, shake your chains to the earth like dew, which in sleep had fall'n on you, ye are many, they are few.' Percy Byshse Shelly 1819

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