In this brief guide we are going to answer the question “Do you need home insurance from exchange or completion?”.
Do you need home insurance from exchange or completion?
Yes, most mortgage lenders will insist that you have home insurance before they will allow you to complete your mortgage.
The reasons why most mortgage lenders will require you to have home insurance before exchange or completion is that from those points the property will contractually be owned by you and hence you will have the liability and be responsible if anything goes wrong with the property.
What may go wrong you say?
A fire, a burglary, natural disaster etc.
Once you exchange contracts on a property purchase you become legally liable for the property although you may not have completed on the property if you didn’t exchange and complete on the same day.
In some cases the exchange of contracts may require the seller to continue to maintain insurance on the property till the completion of the buyer’s mortgage on the property.
In some cases, you may be able to find short term insurance which covers youn between exchange and completion.
Most solicitors will also refuse to continue to represent a buyer who does not seek and obtain home insurance for their property at the point of exchange of contracts.
When to get building insurance when buying a house?
You should seek to get buildings insurance prior to exchanging contracts
In this brief guide we answered the question “Do you need home insurance from exchange or completion?”.
If you have any questions or comments please let us know.