URGENT: Were my parents shafted?

Ape_grrl

My parents twenty year endowment interest-only mortgage is ending this month. The problem is not with the L&G endowment (that's giving them £600), but with the Northern Rock mortage itself.

They took out £5000 in 1985 and the balance now owing is £5965.12. How is that? I understand charges and the like, but is this unreasonable?

Both my parents are on a very low income (both are disabled) and if this isn't a case of mis-management I'm going to have to help them out.

Should I be :mad: or ?

Yours hopefully,

Ape_grrl

hobo28

Do you know where the £965 has come from?

robnye

do they have a second endowment policy....?
what do there annual statements show?

Robert_Sterling_3

There have not necessarily been shafted but this is the Northern Rock of which a chief executive once said we are "Lean, Mean and Keen".

I note in passing that if they were members of the Northern Rock they would have got a Windfall of about £2500 some time ago. The shares given out are now worth £4000 plus.

Let us know what the extra £900+ is all about.

Ape_grrl

The £900 seems to have come from charges - but shoudn't this have been taken care of in the repayments?

Having just spoken to my mum, she's worried that the account hasn't been managed properly. She said that she thought that the only money owed at the end of the term would be the initial £5000, because it was an interest only mortage, with an endowment.

Another problem is that she phoned NR to discuss this and they said "write a letter". What she really want to do is have a conversation with someone. None of this is easy for her - she's getting very stressed about it which is making her ill. :wall:

Arrgggg!!!
(thanks for the replies though - they are helping!)

robnye

so the L&G endowment was held against the northern rock mortgage.
yet the l&g endowment is only giving £600 back.........? did your parents make a complaint..... surely the policy should return more than that over 20 years?

as mentioned you need to ascertain what the £900 charges where for?

dunstonh

Did your parents add all the charges to the mortgage?

Ape_grrl

robnye wrote:

so the L&G endowment was held against the northern rock mortgage.
yet the l&g endowment is only giving £600 back.........? did your parents make a complaint..... surely the policy should return more than that over 20 years?

To be honest, I think they were just relieved that the endowment wasn't short!
Would I be able to complain on their behalf (just to take some of the pressure off) or does have to be them directly?

as mentioned you need to ascertain what the £900 charges where for?

I know that £250 was for something like the release fee (it was £95 two years ago). They also have the home and contents insurances with NR (I know, I know!) but shouldn't that have all been taken care of with the monthly direct debit?


All of this stuff is making my head hurt!

Ape_grrl

dunstonh wrote:

Did your parents add all the charges to the mortgage?

I'll have to get my hands on the statements, but I know that they were paying more per year than the total annual charges.
I'm going to have to get a calculator, aren't I? :rolleyes:

shaymenRup

This matter needs to be sorted out face to face.

Letters can take weeks to resolve matters and you don't have that long.

You need to ask your parents to find as much original documentation as possible.

Do they have their annual mortgage statements these will evidence the charges over the years.

Fees are now charged if you end a mortgage with a financial institute and also for releasing the deeds etc. Shouldn't amount to 900 though.

Go to your local branch, (if your parents can't come with you then ring first book an appointment and ask what they require you to bring to act on your parents behalf- usually a letter signed by them).

Ask for a breakdown of the fees and what will happen to the debt if as is obvious the endowment doesn't cover the amount outstanding. (continue as standard rate mortgage?)
Look into the share situation and don't dive into paying your parents debt until you are fully satisfied that everything is correct.

Also seek advice re the possibility of your parents being missold the endowment policy in the first place.

dunstonh

Mortgage statements are going to be your best bet. They will show the progression of how it went up.

Back in 1985, the payment method would have been standing order, not direct debit. They would have been responsible for all standing order amendments being done every time there was a rate change. It's possible that they didnt increase when they should have and a small shortfall appeared. Interest on the interest over the years would have built up.

Again, come to think of it, back in 1985, its unlikely the lender would have allowed the charges to be added to the mortgage as that is generally a more recent thing.

To be honest, it could be a lot of things and statements would help.