May 25, 2023
Fees Free Mortgage Team

What is Home Buyers’ Insurance?

May 25, 2023 - Fees Free Mortgage Team

What is Home Buyers’ Insurance?

So, you’re ready to embark on your home buying journey. You’ve saved, scoured the market, and are ready to submit your mortgage application. Or maybe you’re an early bird and are simply doing a bit of research! 

As you prepare to send away those all-important papers, there’s an equally important step to consider – protecting yourself during the buying process itself. Home buyers’ insurance is the perfect solution – but what exactly is it, how does it work, and do you really need it? Our experts are here to break things down. 

It’s no secret that buying a house can be expensive. Outside of your deposit and actual price tag, things like conveyancing and application fees can quickly add up! Home buyers’ insurance is designed to protect the money you put towards these purchasing costs – giving you a cushion to fall back on in the instance of your purchase falling through. 

How Does Home Buyers’ Insurance Work?

So, why would you need to protect yourself at this point in the buying process? Well – home buying requires a lot of investment. Accounting for everything from stamp duty to solicitors and conveyancing fees, buyers’ additional costs can often build up to tens of thousands of pounds. 

But what would happen if your sale were to fall through after the payment of these costs? In most circumstances, you’d, unfortunately, be left footing the bill. Home buyers’ insurance, however, keeps you covered. 

Here’s how it works. When you submit your mortgage application, you’ll often be given the option to add home buyer’s insurance. In some circumstances, you can opt-in up to 14 days after sending away your documents – meaning you might not be too late if you’ve already begun your journey! 

Most home buyer insurance policies cover sale failures occurring as a result of a variety of mishaps, such as gazumping (when another buyer swoops in with a higher offer), property defects discovered during surveys, property damage, circumstantial changes, and more.  

Should something covered within your insurance terms go awry, your provider will work to reimburse you accordingly. 

What does Home Buyers’ Insurance Cover?

What exactly your home buyers’ insurance will cover depends on your policy and provider. Generally, this insurance type aims to protect every element of your investment during the buying process. Common coverage points include:

  • Conveyancing Issues: If your sale happens to fall through as a result of issues relating to conveyancing or your solicitor, your home buyers’ insurance policy may be able to offer reimbursement.
  • Surveying Issues: Should issues or property defects resulting in sale failure be discovered in the surveying phase, your policy should have your fee expenses covered.
  • Mortgage Lender Issues: Issues with your lender? Whether your offer has been withdrawn or reduced, your insurance may be able to offer some protection.
  • Seller Withdrawal: Your home buyers’ insurance should be able to assist financially should your vendor withdraw the property from the sale as a result of circumstances beyond your control, or not be legally entitled to sell the property in the first place.
  • Job Loss or Relocation: Job loss, redundancy, and relocation are difficult to face in the best circumstances – never mind when buying a home. Should your sale fall through as a result of this, your policy may be able to help. 
  • Gazumping: If another buyer swoops in with an offer higher than yours, causing you to lose the property, your policy should be able to help recover some of the costs already incurred. 

Of course, your exact level of coverage, as mentioned above, will be determined by your provider and policy. Be sure to read the fine print before signing! 

How Much Does Home Buyers’ Insurance Cost?

As there are many providers out there offering home buyers’ insurance, there’s no one set cost. With this being said, UK averages tend to sit at anywhere between £50 for a minimal level of coverage to £150 for a comprehensive package. Generally speaking, lower-cost packages will protect you up to a certain amount of funds, whilst premium cover takes things a step further, working to safeguard larger investments.

Fees Free Mortgage’s chosen home buyers’ insurance provider, Rhino Home Protect, offers packages in conjunction with our mortgage protection experts. Our exclusive prices include a standard package starting from £59, an essential package starting from £69.00, and a premium package starting from £139. 

Keep in mind that home buyer’s insurance is a one-off premium – meaning the prices you see above will keep you covered for the duration of your policy.  

Do You Need Home Buyers’ Insurance?

Although home buyers’ insurance isn’t completely necessary, it’s a great thing to keep in mind. At such a low relative cost, ensuring you’re covered for mishaps outside of your control during the buying process could really pay off. Plus, the peace of mind you’ll get on purchasing is nothing to be overlooked! 

If you’re unsure as to whether or not home buyers’ insurance is the right fit for you and your home buying journey, why not get in touch with our mortgage protection advisor, Adelle Bright? She’ll be happy to help assess your suitability and guide you towards the right package deal should you want to proceed. 

Don’t Know Where to Start with Insurance?

If you’re in the market for a new home, insurance should be one of your top considerations – but choosing the right option for your unique circumstances can be tricky with so many plans available. If you’ve read through the above and don’t know where to start, or want to sign on for all important financial protection, Fees Free Mortgages can help. Our Insurance Advisor, Adelle Bright, is ready to help you select and secure the best possible insurance deals in line with your mortgage. 

We’ve built a page allowing our clients to discover our Rhino Home Protection home buyers’ insurance deals directly, however, advise most clients, whether new, in need of guidance, or looking for a bit of expert support, to fill in the contact form at the bottom of our mortgage protection page. Do so, and Adelle will be in touch shortly. 

Otherwise, visit us in our flagship branch, or give us a call to get started. 

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