Rather than I rave on about the need for income protection - have a read of this tragic story. If the father had owned an income protection policy then he most likely could have kept servicing the mortgage and stopped the mortgagee sale of his house. Income protection will pay up to 75% of your salary after a stand down period and up to the age of 70 if you are unable to work due to sickness or injury.................Please read the story

Family face ruin over forced house sale

4:00AM Friday September 05, 2008
By Anne Gibson sourced from NZ Herald www.nzherald.co.nz

The couple forced to sell their home received $445,000 but borrowed $540,000. Photo / Martin Sykes

An Auckland family who borrowed $540,000 for their home now have a month to leave after it was sold at a mortgagee auction for $445,000 yesterday.

Peter Cashmore, a real estate agent at Ray White, said: "It was a good buy at that price but I wouldn't call it a steal."

A young man and his father bought the house with a view to upgrading it.

In addition to repaying the bank loan, the family would also have to pay the bills for marketing the property and the agency commission "so they will end up owing a further $120,000 to $130,000 to the bank", Mr Cashmore said.

The family's options were either to work out a draft repayment schedule with the bank or consider filing for bankruptcy.

The couple who owned the house featured on the front of the Weekend Herald last month as the human face of mortgage misery.

They inherited their Kingsland villa eight years ago with a $200,000 mortgage.

The house had been in the mother's family for more than 40 years and she grew up there.

They borrowed a further $340,000 to re-pile, shift walls, renovate the kitchen and spruce up the place.

That meant their total debt to Westpac was $540,0000.

But when the father of the house suffered heart attacks and a stroke, the family was left without an income.

The house still appeared to need extensive work and was marketed extensively as a renovation purchase.

The mother has now moved to Australia to search for work.

Mr Cashmore said he had also marketed another property which went up for mortgagee auction yesterday. The Symonds St apartment sold for $173,000 but the vendor paid $290,000