Forum newbie needs help / advice

taz..ufos

Firstly hello all, my name is steve and I found this forum whilst searching the net looking for answers to my mortgage problem and would be greatfull for any ideas/advice anyone can give... I like many others decided to get on the housing ladder at the end of the 80s and being a self employed man that works with my hands and know nothing about finacial matters I decided to get in touch with my accountant/ financial advisor to talk it over, he said he could see no problems with it and would sort it out for me, and come up with a pension linked mortgage that would not only give me enough money in a lump sum to pay off my mortgage when the time come but also some money as a pension afterwards, so I took his advise and signed the paper work, a short time later my marraige broke down and I become divorced and payed off my ex wife and kept the house , all the way through this I was never late and never missed a payment I then re married and added my new wifes name to the mortgage (once again my accountant sorted this out for me) and all has been well for many years , ...untill about two years ago I received a letter from my life insurance company telling me that my policy might not have enough money in it to pay off my mortgage when it matures, so once again I got in touch with my accountant and told him what was in the letter, he told me he didnt think there would be a problem, so me thinking that it was a pension linked mortgage took him at his word and told the wife that the accountant had told me that he didnt think there would be a problem....I have now had a letter from the lender telling me that the loan finishes in June 2014 (and was quite pleased about that) so I dug out some paperwork from the life policy only to find out that the life policy does not pay out untill Feb 2016 which is nearly two years after the lender wants their money back....I have since spoken to the life policy people to be told that 2016 is indeed the date that the policy matures, and it is also projected to have a shortfall of £18000 when it does, and when the mortgage was only for £40000 I thought it was a fairly high shortfall, I am obviously not very happy about this but thought the lumps sum from my pension might help pay it off, but I have found out that my pension does not pay out untill sep 2020....as I said at the beggining of this post I know nothing about financial matters and have relied on others to sort things out for me,...But before I go any further on this matter and rather than jump from the frying pan into the fire can any offer any advise/suggestions or help with this matter as I am at the end of my witts......to me it just does not seem right that all we did was paid exactly what was asked of us and have never missed a payment and this is how we have been rewarded for it....

sorry about my first post being so long, but if you have read it many thanks for doings so....Steve

HarrowArrow

Ummm punctuation - NOT !;)

However, if you have proof that your mortgage broker said that your pension mortgage "would not only give me enough money in a lump sum to pay off my mortgage when the time come " then isn't that mis-selling and you may be entitled to compensation???:eek:

Others are more experienced than I to answer this - but seemed a shame to leave your fretting post unanswered !

Annisele

It sounds as though a visit to an an adviser might be in order! If you take all your paperwork along to your financial adviser, he might be able to help you out.

I'm afraid I'm a bit confused by your post.

You say that you have a "pension linked mortgage", and that your mortgage is due to be repaid in June 2014. However, you also mention a "life policy" due to mature in 2016 with a shortfall of £18,000, and you say that your "pension does not pay out until Sep 2020". I'm therefore not certain whether you have an endowment mortgage, a pension mortgage (both of which are effectively interest only mortgages together with a separate investment product), or some other plan.

From what you say, it sounds as though you have an interest only mortgage supported by some sort of life policy (probably an endowment). Is it possible that your adviser expected you to repay part of your loan using the maturity proceeds of your life policy, and then the remainder of the loan using a tax free lump sum from your pension? Remember that (unless your pension fund is tiny) you won't get all of it as cash.

Pension mortgages are a relatively high risk proposition, so may not have been suitable for you - but it very much depends on your circumstances and attitude to risk at the time.

If your mortgage term finishes before your endowment policy matures, it might be a relatively simple matter to just arrange for the mortgage term to be increased.

Some things you might want to think about before deciding what action to take:

• When did you think your mortgage was due to finish?
• How old are you now, and when do you aim to retire?
• What sort of life policy do you have? (If you aren't sure, ask the product provider).
• Can you afford to switch part of your mortgage to repayment?
• Are you in a position to make any lump sum repayments to your mortgage? Would your lender charge you if you did that?
• What is the current value of your pension policy? Are you still making contributions? Are you happy with the funds your pension is invested in?

Hope that helps, but it is not intended as advice - just something to think about.

taz..ufos

thanks for your help I will make arrangements to see a different financial adviser as well as the my accountant that originally arranged the mortgage for me (as he is still my accountant at the moment ) and look into the points you have mentioned,

thanks steve