do i have to have endowments if i dont want to pay repayment rates

nursekaz

If I wanted to transfer the equity from the endowment mortgage i have in joint names with my ex, is it possible to remove his name, via a solicitor ( with his and the banks permission) but continue on the same terms.
He would have the endowments, but could i still keep paying at endowment rates. I would then have 8.5 years to raise the remaining 21k. so i could pay it off. I would have some life insurance so the kids could pay off the mortgage if i dropped down dead. Or do i have to change to repayment or buy more endowments.

silvercar

I think your asking if you can have your mortgage payments on an interest only basis. What you are doing at the moment is paying the interest only to a mortgage lender and the endowment go to a different company where they would originally have been set at a level designed to repay your mortgage capital at the end of the term.

There are moany mortgages available on an interest only basis. You just have to be disciplined enough to make sure you have the capital available to pay off the mortgage when it ends.

As for taking your ex's name off the mortgage, that depends on getting the lender's agreement. They might want proof that you can afford the repayments on your own.

Mikeyorks

I think there's a dependency on whether the endowments are 'assigned' to the Mtge? Sorry, but I can't see the Mtge provider allowing the endowments to go out of the relationship with the Mtge - as they are their 'assurance' the capital will be repaid

I did have an endowment Mtge where the policies were not assigned. But there was a caveat in the Mtge that I had to maintain the policies. So - 'assigned' or not - I can't see your Mtge provider (with this Mtge) agreeing to your ex taking the policies - as he could cash them in at any time. But - it's worth the question if they would allow you to continue on 'interest only' on a new Mtge?

I'm assuming you're getting some legal advice on the separation? Think you would be well advised to make this one of the questions?

EdInvestor

Hi nursekaz

It's really not at all clear what you want to do.

nursekaz wrote:

If I wanted to transfer the equity from the endowment mortgage i have in joint names with my ex, is it possible to remove his name, via a solicitor ( with his and the banks permission) but continue on the same terms.

You don't have "equity" in an endowment mortgage.There are two products here, the endowment policy, which will have a surrender value (ring up the insurance company to find out how much) and the interest-only mortgage loan.[If you count the life cover there are actually 3 products.]

He would have the endowments

So you want to give him the money built up in the endowment, while you keep on paying off the loan, is that right? You realise that this loan will not pay off the mortgage when it ends?

but could i still keep paying at endowment rates.

There's not such thing as "endowment rates".You can remortgage to a different interest rate at any time, regardless of what you do with the endowment.

I would then have 8.5 years to raise the remaining 21k. so i could pay it off.

How do you mean "the remaining 21k"? This seems to siuggest you plan to surrender the endowment and use the money to pay off part of the mortgage? Or just your share of the endowment surrender value?

I would have some life insurance so the kids could pay off the mortgage if i dropped down dead.

Life assurance these days is cheap to buy.

[quote Or do i have to change to repayment or buy more endowments.[/QUOTE]

This depends on what your aim is, which is as clear as mud.

Try explaining again

nursekaz

Sorry, I realise that I did not explain clearly.
My house is in joint names at present. Divorce is nearly finalised. I have to give him £20k cash and he is going to have the endowments worth 11.5k. So he gets about 30k.
There is £21k left to pay on the mortgage. I will stay in the house and I wont ever have to see him again.
I was going to change to a repayment mortgage, tripling my payments. I can remove his name with the help of a solicitor, I have permission from the bank, and a judge has ordered that this is done. But I was wondering if I could keep paying the same amount as I have been doing, and raise the 21k over the next 8 years, so i have enough to pay it off. The endowments would not have covered the capital anyway. Or do I HAVE to have either endowments or be paying repayment prices.

EdInvestor

But I was wondering if I could keep paying the same amount as I have been doing, and raise the 21k over the next 8 years, so i have enough to pay it off.

You really need to check with the lender. In the old days, they would insist you had an endowment or other repayment vehicle and the endowment would be "assigned" to the lender, meaning you couldn't sell it, or cash it in or transfer the endowment without them agreeing to it.

The endowments would not have covered the capital anyway. Or do I HAVE to have either endowments or be paying repayment prices.

To pay back a mortgage or cover a shortfall (whatever it's caused by) you can remortgage to repayment, overpay the mortgage ( using lump sums now and then or increasing the amount you pay per month) or set up an alternative repayment vehicle ( eg an ISA).

These days most lenders don't care what you do. So just ask.

nursekaz

Thanks for your replies, but I think this is clearer . What I want to know is I want to take over the existing endowment mortgage and maintain the existing payments. We are going to transfer the equity with the help of a solicitor, i.e take his name off. The lender has offered me a repayment mge which has tripled my payments. I want my payments to remain as before do i have to remortgage or can i insist on maintaining my old agreement.
I dont want to increase my payments to them, I want to pay off my mtge at the end of term using capital from a different source. Can i insist that my mtge and repayments remain the same. my income is high enough to cover this.

EdInvestor

Have you considered asking the lender to extend the repayment mortgage term? That will reduce the monthly premum.

silvercar

Tell your lender you have a different source of funds to pay off your mortgage at the end of the term (I resume this is true). You therefore want an interest only mortgage, ask what the payments would be.