endownment question?

silvercar

How about pointing some of the blame towards the mortgage providers?

In the late 80s, when endowments were so popular, we took out our first mortgage. We wanted to take out an interest only mortgage because we were new graduates on relatively low salaries that we expected to increase sharply over the next two+ years. Low intial costs were key for us. We were told we could only have a repayment mortgage (which was then expensive) or an endowment mortgage (in fact we ended up with a low-start endowment). The endowment was assigned to the mortgage.

Now 20 years on, we are looking to move house and increase our mortgage considerably. Again, due to a projected income stream, we want lower costs initially and so are opting for an interest only mortgage. We had to fill in just one line on the application form to state how we intended to pay off the capital. We wrote, "lump sum payments and maturing endowment policies." This was accepted without question, no requests for info on the policies or where the lump sums were coming from!

Had we had this option in 1986 we wouldn't have put money into the endowments, just used that money to make payments off the mortgage. We were effectively forced to take out endowments that we didn't want in order to secure the mortgage.

ReportInvestor

silvercar wrote:

We were effectively forced to take out endowments that we didn't want in order to secure the mortgage.

"Forced" is the wrong word.

"Persuaded" is more accurate.

And in 1986 house prices had not rocketed to the the 1989 overheated levels.

Why do we like to portray ourselves as victims? Can't we sometimes take responsibility?

EdInvestor

Times have changed,thank God)

In the old days, lenders required you to have an arrangement to pay off the mortgage if you took an interest- only deal and to prove it.Now they don't.

You're lucky you're not a bit older.

Back in the 70s, you couldn't get a mortgage at all if you were

#Single
#Female
#Wanting to buy in the inner City
#Wanting to buy an old property
#Wanting to buy a converted flat
#Had a deposit lower than around 20%
#Had a deposit but hadn't saved in the building society(banks weren't allowed to offer mortgages!)
#Had any job other than a very conventional 9 to 5 in an office one

Imagine!

Less than 50% of the population owned their home then.

dunstonh

When i started out with a bank, you couldnt get a mortgage until age 23, you couldnt have a house more expensive than the line manager without sign off from chief inspectors dept, you couldnt borrow anywhere near as much as today. Although the dirt cheap mortgage rates for staff did go some way to make up for that