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Insurance companies know who the lender is at the start of the loan. They inform the lender if the insurance has lapsed....
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50% deposit on a $25k job is not chicken feed. If they have been in business long enough and, as you say, have trading accounts, nearly all jobs can be completed within the invoice parameters of their suppliers.
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Consider putting the deposit into your solicitors trust account as proof you have the funds. To be released upon completion of the work.
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It is a pity that the hand wringers do not experience that....
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