Endowment Plan/Mortgage puzzle

luv_my_brass

I took out an endowment/mortgage and had always assumed that they would mature at the same time, but I have received notification that the Endowment plan ends in October this year, yet the mortgage end date is October 2012. I am baffled by this, and wonder where it leaves me. The endowment will pay me whatever amount has accumilated, not enough to pay off the mortgage, I know, but luckily I only borrowed 6k. I think the outstanding amount I will have to find will be around £1,800, which I have available.
I have spoken to the Endowment Company and they insist that the Endowment matures this year, haven't spoken to the mortgage company yet, but as things stand, I'm wondering what is the best thing to do - perhaps I should be grateful that it is not the other way around :-/
I can see that I will be able to take whatever is in the endowment pot and put it into my savings account until the mortgage company ask for it in 2 years time, but I will no longer have a life insurance.
Please give me your fourpennorth on this situation and advise please!

dunstonh

I took out an endowment/mortgage and had always assumed that they would mature at the same time, but I have received notification that the Endowment plan ends in October this year, yet the mortgage end date is October 2012. I am baffled by this, and wonder where it leaves me

Have you re-mortgaged over the years? If you have then its very common for the mortgage and the endowment to go out of sync with each other.

luv_my_brass

dunstonh wrote: »

Have you re-mortgaged over the years? If you have then its very common for the mortgage and the endowment to go out of sync with each other.

Thanks for your response.

Well I don't want to complicate the story too much, but the whole of it is, that after originally buying my property for cash, I took out a 6k building loan to complete works on the house, after my available cash ran out. At the time, I was offered much more, but declined it, then a couple of years later, wanting to do more work on the house, borrowed a further 3K, again with an endowment.
During the 'endowment mis selling' fiasco, I made a successful claim, which paid off the 3k and the mortgage company agreed to 'freeze' payments on the 6k until maturity, so I have only been paying the endowment premiums. I'm not sure how all of this would affect the discrepancy in the mortgage/endowment end dates, but thought I would tell you anyway, to see if you can pick up on anything.
ps I am going through my documents at the moment to see if I can see how the discrepancy came about, I wonder if your theory may be correct?

dunstonh

When you borrowed a bit more and paid some off etc, then the dates may have realigned with the date of those transactions. Whereas the endowment would have been the original, very first, date.

luv_my_brass

Thanks for your reply dunstonh, I am still wading through my documents, but I suspect that what you say is the answer. I will have to see what the mortgage company have to say about this situation, as I'm wondering how to deal with the 2 years that are left on the mortgage when life insurance/endowment won't be in place. :-/

dunstonh

You cold go with early repayment on the amount you have from the endowment. Then keep the monthly payments the same from now until the end on the mortgage. This will help reduce the shortfall and may even clear it without even having to use your personal savings.

Most lenders will allow a part capital repayment. You just need to check if you are charged or not for doing so. Or, if you are on a very low interest rate, see if you can put the endowment into a savings account paying more than the interest on the mortgage.