Term Assurance - This is life assurance
which pays out the insured sum on the death of the policy holder
providing it occurs within the policy term. This is a common
method to protect the mortgage in the event of death and to
ensure that the mortgage debt is repaid. The most common types
of this insurance are Mortgage Protection or Level Term Assurance.
Mortgage protection is normally used in connection with a
capital and interest mortgage and the level of the insured
cover reduces in line with the reduction in the mortgage debt.
Level Term assurance is more likely to be used in connection
with an interest only mortgage as the level of cover remains
constant as does the mortgage debt. With Term Assurance cover
there is no pay-out if the policyholder survives the policy
term and the policy simply lapses with no value. This factor
makes this type of cover relatively inexpensive.
Tracker Mortgage - This is a specific
type of variable rate product. The interest rate charged tracks
a base rate and this means that the interest rate is variable
also. When the mortgage is set up customers are advised of the
appropriate margin to be applied to the mortgage. When base
rate changes this will be reflected in the amount you pay, whether
up or down.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.