endowment shortfall

yorkie007_2

I have sent in a claim for endowment shortfall but i am not sure how to answer questions they may ask me. How can you claim when it says on my origional brochure that any shortfall must be made up by the borrower? Surely an element of risk is inherent with this financial product? Could anyone advise me on the procedure for paying off an endowment mortgage early?

EdInvestor

I have sent in a claim for endowment shortfall but i am not sure how to answer questions they may ask me.

There is no need to answer any questions where you do not know the answer.

How can you claim when it says on my origional brochure that any shortfall must be made up by the borrower?

You are not claiming for the shortfall, you are asking to be put back in the position you would be in if you had taken out a repayment mortgage, on the basis you were missold the endowment, usually because the salesman did not take into account your attitude to risk.

Surely an element of risk is inherent with this financial product?

Yes indeed.If you were aware of this and willing to accept the risk, you were not missold and cannot claim redress.

Could anyone advise me on the procedure for paying off an endowment mortgage early?

Surrender or sell the endowment, use the proceeds to reduce the capital owed and then increase the monthly mortgage payment by the amount of the endowment premium, thus overpaying the interest/only mortgage. If you want to repay early you will probably need to overpay by more than this.

If you are on a high interest rate you may wish to consider remortgaging.