Desperately Needing Advice and Help

Glenisis

I have just realised that our Mortgage is “Interest only and not “Capital and Interest”.
The original Mortgage was with an Endowment taken out in 1985. We struggled to make the Mortgage and Endowment payments and took advice from a Financial Advisor from Albany Life (Not Now in Business) This is where in all gets very confusing as this took place mid nineties . We were advised to change the Mortgage and cancel the endowment this would make the repayments affordable. I can only assume that the change and documentation was arranged by Albany Life
My recollection is that we would have been unable to make these changes by ourselves due to the Law? (we are in Scotland)or have I got this completely wrong, neither my Wife nor I remember contacting the Building Society to make the change . The only reason for twigging to this problem was a letter from The B.S. regarding a payment arrangement I had made with them and realised the balance was not reducing, I for some reason thought the balance was only calculated at the end of the payment period. The Mortgage is due to finish in two months time and at this moment it looks like we will have to repay the original loan of £19,000, and no capital to repay this amount I fear we are in terrible trouble. Please believe me I am totally confused as to how this has taken place an extremely worried as to what I can do to resolve the situation. I have contacted the Building Society, Financial Services Authority and Canada Life who took over Albany Life’s business but it is going to take some time to obtain all the documentation, can anyone give me any further advice please

Allan
Edinburgh

Money_Yoda

Allan - first off (and this is easier to type than it is to do) don't panic.

You've done all the right things so far. The main contact you need to make is with your Building Society with whom you now need to negotiate some type of repayment plan. Alternativly, and dependent upon your age, it may be better for you to remortgage to a new lender.

I'd suggest speaking to a reputable mortgage/financial adviser you feel you can trust - recommendation is always the best way to find someone you'll feel comfortable with. They will be able to assess you situation and, hopefully, recommend a suitable plan to help you repay the mortgage balance.

As a seperate issue you may have a claim against the insurer for whom your original adviser worked - but this is going to depend on what paperwork you and they have to get to the bottom of things.

In any event - best of luck with it all.

Glenisis

As we had the Mortgage for sereal years before we made the change would it be possibe that durring that period we did make payments to the balance? my main worry is that the B.S will demand the balance as soon as possible and not be willing to extend the mortgage,

beecher2

Glenisis wrote: »

As we had the Mortgage for sereal years before we made the change would it be possibe that durring that period we did make payments to the balance? my main worry is that the B.S will demand the balance as soon as possible and not be willing to extend the mortgage,

It sound like it was always an interest only mortgage from what you say. Sort out a meeting with an adviser as soon as you can to see what your options are.

Glenisis

many thanks for your help perhaps you could reccomend an adviser in the Edinburgh area

beecher2

Glenisis wrote: »

many thanks for your help perhaps you could reccomend an adviser in the Edinburgh area

no idea sorry - does your workplace or union recommend one? I used Blythswood Associates in Glasgow because they had a contract with the local authority I worked with to provide independent advice.

JA1000

So every year when you looked at the mortgage statement and saw the same balance it didn't ring any alarm bells.

I know you don't have any capital but can you put the mortgage for £19k into perspectective, what is the value of your house?

You are likely to be able to continue to pay the interest which I can imagine is quite a small amount anyway.

Glenisis

we have not seen a statement for many years, and to be honest and seemingly stupidy I was led to believe that the balance continued to show the amount borrowed until the mortgage was paid in full, the house is probably worth around £180K but we wish to leave the house to my daughter and certainly not to lose it

Snippa

Is there anything left from the endowment at all? You say you stopped paying it, but was there a balance on it when you stopped? If so, it should still be there. That would be the first thing to check. Even if the balance doesn't cover the fuill 19K, it might be a few grand to put towards it.

If the worst comes to the worst, and the full balance is outstanding, you should be able to get a mortgage for it, because the value of the house is so much more. Do you still ahve a salary or pension coming in? You could take a new mortgage over 5 or ten years, rather than the full 25 and get the amount paid off.

magpiecottage

There is no need to panic.

At current interest rates, based on a mortgage of £19,000 and a property worth £180,000, it would take about 40 years for the loan to compound up to produce negative equity - even if no payments were ever made.

Your lender is also unlikely to foreclose because you are still making payments.

However, the lender should, under FSA rules, have been providing annual statements for the last five years and under the Mortgage Code before that. You might want to ask why this has not happened - it is hardly as if they didn't know where you lived!

Glenisis

thanks, still have a saalry coming in and I am retired but have a small pension