interest only mortgage & existing endowments?

gentlepurr

hi,

looking at getting a mortgage, using 2 existing endowments.

1st endowment £27,000 due to mature in 3yrs time, and should acheive target, and produce some profit (albeit not as much as was originally forecast)

2nd endowment £33,000, due in 13yrs, probably a shortfall, maybe realistically it will produce upwards of £25,000.

are there any mortgage lenders out there that will take the face value of the policies, and allow a £60,000 interest only mortgage off the back of them?

(i'm hoping that some profit on the first will offset some of the shortfall on the other, and any balance not met at the end of the term will be met out of savings)

advice appreciated!

xx

herbiesjp

Most lenders should be able to take these policies into account and agree the interest only mortgage for you

gentlepurr

thanks herb, you're a star!

(sadly no smileys for "star")

xx

silvercar

On completing my mortgage application for a large interest only mortgage, there was 1 line to complete about how I was going to pay off the capital amount.

I wrote "various endowments maturing and lump sum repayments".

The mortgage was approved with no further questions.

Not sure if this is a good thing or shows a relaxed lending policy.

Coventry BS BTW.

darktrader

silvercar wrote:

On completing my mortgage application for a large interest only mortgage, there was 1 line to complete about how I was going to pay off the capital amount.

I wrote "various endowments maturing and lump sum repayments".

The mortgage was approved with no further questions.

Not sure if this is a good thing or shows a relaxed lending policy.

Coventry BS BTW.

A relaxed lending policy.

Lenders have very little interest in the borrower's abilty to pay, or indeed how they intend to repay the mortgage as they can take your house as payment if necessary.

I once had an interest-only mortgage for TWICE the top estimated combined maturing value of three endowments. Saw several lenders to get the best deal and NONE asked how I was going to repay the loan. (And the mortgage was repaid before the endowments matured.)

Was different years ago. The majority of lenders now though don't care so long as they can cover the debt with tangible assets

Rikki

I have a portion of my mortgage interest only. I don't have any endowment to cover it. I use mortgage over payments to reduce the amount owing and I have adequate life insurance to cove the full amount of the mortgage should anything happen to me.

I have a FA friend that only has an interest only mortgage which will be covered by his life insurance. He sees it as a cheap loan. He has no children to leave the house to