Endowement

pinkykat

I am on income support and have an endowment mortgage that ends in 7yrs. They have said that there will not be enough funds to pay off the mortgage and I was not mis-sold the endowment.
I do not have any savings or income.
I am disabled and will never be able to work.
What will happen? Will I have to sell my home?

opinions4u

The endowment will produce some funds that will reduce your debt.

What happens then is a matter for agreement between you and the lender.

I think it's highly unlikely that you will have to sell up and move on.

It's more likely that you will end up with a reduced mortgage debt (because of the maturity funds), an extended mortgage term for several years after the policy has matured and payments at a similar level (subject to interest rates) that you are currently paying for interest only + endowment policy at the moment. This will chip away at the debt which will, eventually, be repaid in full.

A couple of things you should consider:

1) Is there any way that you could afford to overpay the mortgage, even if only by a small amount? This would help to reduce the amount of debt that you are relying on the endowment policy to repay.

2) Does the endowment policy have a "Waiver of Premium" benefit attached to it? It so, there is a possibility (not a certainty) that your disability may be covered under this benefit which would mean the life company could pay the premiums for you.

Good luck.