Bad situation - Divorce. Help appreciated.

ggecko

Hi there,

Well we purchased a home in the 80's for £24k, and had an endownment attatched. I unfortunately divorced my husband 7 years ago, he has carried on payin the interest only mortgage which finishes with A&L in 2 years 7 months. The situation however, is that when I divorced I stop paying the endownment not knowing what it was (how stupid of me, I already have become ill about this so please don't stress me:o). I just really at a time of need, with two children didn't understand the implications, and couldn't afford it at all at the time. (How ridiculous of me).

So, just checking paper work, I have realised what has occured, I am in need of paying £21k to sort the other 'endownment' with A&L, I can save this over the threee years if I keep my mind to it so I am not worried about collecting the money (well I am, but it can be done, even if a small amount has to be cleared with a small loan) but the majority I can get together when the mortgage finishes.

Am I right in thinking, that when the mortgage finishes in 2 years 7 months, the endownment payment is due to A&L ? - Which would be covered if I had paid the endownment, but because I haven't they will take the cash from me correct?

Please get back to me, its the last bit I am concerned about - My home won't be taken from me if I get the £20k together, they will just take it cash, and you don't need the endownment to fully pay the home?

I understand my loss, however I am also thinking of starting the claim for the endownment, as I didn't fully understand the policy when I had taken it out, and to be honest with you was pushed into it, and didn't know the longevity of it.

Bottom line: I can pay the endownment which A&L would have covered for me in cash, and own the home out right in 3 years correct?

Also, if you can point me in the right direction in regards to claiming something about the endownment? - If I apply against the endownment, it will not affect my mortgage correct? - I will just most probably owe a (smaller) amount of the endownment, in comparison to the £20k ? - And then I can pay the remainder myself? - Or will A&L mess everything up? Or just carry on as usual, and with the money I get from my claim, they just put it against the current endownment I owe them?

Much appreciated, I can't thank you enough.

theoretica

I am no expert, but will give it a go. As I understand it A&L will want 24k when the mortgage finishes, but don't care where that money comes from. Some will come from the endowment, which should be worth a little from the payments you made right at the start. Actually from what I read about endowments not paying into it may have been a sensible decision!

I am not sure how claiming miss selling works if you haven't been paying into the endowment but have you read this?
http://www.moneysavingexpert.com/reclaim/endowments-miss-sold

ggecko

Hi there, bear in mind we paid 15 years into the endownment

Poppy9

Re missing selling of the endowment I think you will find you bought it before you could make a complaint. Not sure what the year was, think it was 1988 as I took out an endowment in 1985 and I can't complain because the leg. doesn't cover that period. I even have a letter setting out that the endowment was more expensive to take out but the return better!

ggecko

I took the endownment out in 1987, can anyone shed any light on this?

Mrs_Bumble

Have you checked to see if it still has a value?

Rockporkchop

I wouldn't even think about the endowment for now, I would just keep it until it had run its term.

Is the mortgage in your name, even though your XH is paying for it? If it was me, I would switch the mortgage from interest only to repayment straight away. Let your XH continue paying the interest only amount and you pay the repayment amount on top of that, plus as much extra as you can every month. When the endowment matures you can knock it off the outstanding mortgage balance and hopefully shouldn't have to find much, if any, extra money when the mortgage term ends.

If the endowment is found to have barely any value, you can ask to increase the term of your mortgage to 5 or 10 years or whatever is affordable for you to pay back the £21k.

tanith

Just a thought, did you cash in or sell the endowment or did you just stop paying?

Muhasib

Rockporkchop wrote: »

I wouldn't even think about the endowment for now, I would just keep it until it had run its term.

Is the mortgage in your name, even though your XH is paying for it? If it was me, I would switch the mortgage from interest only to repayment straight away. Let your XH continue paying the interest only amount and you pay the repayment amount on top of that, plus as much extra as you can every month. When the endowment matures you can knock it off the outstanding mortgage balance and hopefully shouldn't have to find much, if any, extra money when the mortgage term ends.

If the endowment is found to have barely any value, you can ask to increase the term of your mortgage to 5 or 10 years or whatever is affordable for you to pay back the £21k.

If you followed the advice to switch to a repayment mortgage then your ex would be paying less each month as the interest got lower on the outstanding amount - why not save your own money in a separate interest bearing account and pay it off against the mortgage when it matures

Rockporkchop

muhasib wrote: »

If you followed the advice to switch to a repayment mortgage then your ex would be paying less each month as the interest got lower on the outstanding amount - why not save your own money in a separate interest bearing account and pay it off against the mortgage when it matures

When I said let the XH pay the interest only amount I meant let him continue to pay that same amount until the mortgage ends, which will work out better for the OP. That was another reason why I asked whether it was in her name. Unless her mortgage rate is very low, she won't earn as much from savings.

ggecko

Yeah,

I will be saving £350-400 a month now until the three years is up, and let my XH continue paying the mortgage (It is my name first, but he has been paying it for the past 7 years).

I will save the money for the three years so when they ask for the money I won't have to find a large amount from a bank, worked out I can get around £15k before that anyway.

Do you guys think I should phone the endownment people, and ask if it is worth anything and if so how much of the £21k owed will you be knocking off? - Then I have a relativley decent goal to achieve, so glad I found out all this now, rather than in three years.