my brain is frazzled - HELP Please :o)

oops_a_daisy

I am quite new to this money saving lark and have learned so much but I think I have hit overload and I am not sure what to do about my mortgage and endowment.
Just before Christmas I singed up with a solicitor to make a claim from my endowment provider ( before I came on here and saw that I could have done it myself :doh: aint hindsight a wonderful thing ) anyway the endowment was originally taken out 15 years ago and has 10 years left to run. I have chased my solicitor as I had not heard anything back and today have recieved an offer from L & G. They have offered for me to surrender the policy a large sum and an extreemly low sum for compensation only. I had never even thought of surrendering the policy before I recieved this offer. I will not accept the offer to surrender via the solicitor as this is not what I employed them to do and I would have to pay them comission. It has made me think though about the future of my mortgage and what I had planned to do over the next five years. I was planning to move my mortgage over to a fixed rate for 5 years and overpay so that after 5 years the mortgage would be paid off in full. As I had not thought about surrendering my endowment policy I was going to carry on making payments into it untill it matured so in 10 years would get a lump sum + be mortgage free. I am now confused as to whether or not I should surrender my endowment policy now - pay off half my mortgage immediately and overpay over the next 5 years then be mortgage free but with no lump sum coming along in 10 years. I would under this scenario be able to save the money that would have been put into the mortgage and endowment thus I would have savings. The other way is what I was originally going to do which is carry on with endowment and get lump sum in 10 years and pay off mortgage in 5 years enabling me to save the money from the mortgage when it was paid off. I just dont know which way will be best and am going round in circles. I am hoping that somebody that knows about these things can give me some advice. I have listed below the figures that I have.

mortgage for £55600 - min payments 232.32 per month 4.99% fixed for 5 years. Plan to pay £600.00 per month
endowment for £48950.00 payments per month £73.74 per month
also took out top up endowment 5 years ago ( they saw me coming ) which is £41.21 per month and should raise £12800.00 and will mature at same time as initial endowment.

My main endowment is showing a shortfall of between £5000.00 and £10000.00 sorry do not have exact figures as they are with my solicitor. L & G have also as part of my claim offered to 'redress' the second endowment and have offered me a cash lump sum. Again I am not going to accept this as it was not what I instructed the solicitor to claim on my behalf so they are not going to gain the comission.

The only other debts that I have are £3000.00 on 6 months interest free c/card and a bank loan which has 2 years left to run at £127.30 per month. I have no overdraft and am due extra payments in the next 2 months due to money owed to me and bonus of £5500.00.

Thankyou for reading and I hope that I have included enough information to enable somebody with more experience in these matters to give me some advice.

silvercar

I will not accept the offer to surrender via the solicitor as this is not what I employed them to do and I would have to pay them comission

.

What did you ask your solicitor to do? Make a misselling claim I would guess. If L&G found in your favour and offered you compensation then it suggests the solicitor has done his job. Do you have to surrender the policy or can you take the compensation and continue the policy?

The compensation would have been calculated according to set rules designed to put you in the same position you would have been if you had taken out a repayment mortgage in the first place. The compensation is not designed (unfortunately) to make up any shortfall on the endowment.

oops_a_daisy

thanks for the reply. I dont have to surrender the policy as I have been given the option of either surrendering it or taking the compensation as well as an offer to redress the other endowment. Thankyou for clarifying the amount offered for compensation - that answers another question that I hadnt posted. L & G seemed very interested in the mortgages that I have had since taking out the endowment and the dates. I have moved 3 times and one of the mortgages was for less than the endowment.
I did only ask the solicitor to make a claim on my initial endowment so if the figures are correct I will accept the offer. I had already decided that if I was offered compensation then it would be used on my house as I have a few jobs that need doing.

silvercar

L & G seemed very interested in the mortgages that I have had since taking out the endowment and the dates.

If you can provided details of the actual mortgages you had, L&G will use those rates in their calculations, if not they use an industry average.

Out of interest what did the solicitor charge? A straight percentage?

oops_a_daisy

I did provide acurate information so the calculation should be correct. Im sure the solicitors will be phoning me on Monday to discuss

ummmmmm yes they are a no win no fee 25% + vat charge :eek:

I have seen the light now and joined MSE

silvercar

You still keep over 70% of the compensation.

oops_a_daisy

yes and thats better than nothing

just need to work out now what to do for the best in the future with my mortgage and endowment - do I keep the endowment or cash it in