Non Existant endowment/Equity release

emperess

Hi guys,wondering if you can help me on this. A good friend/neighbour of mine,works part time due to retire soon recently had the shock of his life (he is a widow). He thought he had an interest only endowment mortgage for years and thought the morgtgage was nearly clear. By chance at the bank last week he happened to ask how it was going only to be told to his horror that there was no endowment in place(never was!) and he had only been paying off the interest and there is a balance of £8000 left on the mortgage,not massive to many I know but for this "almost" pensioner it is. He has alot of equity in the house and was wondering if he should release the equity in the house and pay off the mortgage as he cant afford to get a loan,would this be a good option,how would that work? Any help asap please would be very much appreciated.

opinions4u

I think his best option is to talk to his lender about his options. I would hope that they would be quite happy to agree an extension to the term to enable him to repay it within a reasonable period of time.

£8,000 at 5% should come in at less than £90 a month over 10 years on a repayment mortgage, less than £55 for 20 years.

When was the policy arranged (but not set up) and who by? While he probably isn't entitled to claim compensation there is the possibility of poor administration contributing to his position.

Finally, a word of advice to anybody else reading this post.

Check your bank statements. If you don't appear to have a direct debit to a life assurance company and think you have an endowment mortgage take action now!