Releasing Equity - Numpty Question.

advent1122

I know nothing about how mortgages or endownments work so bear with me.
I bought my house for £37,000 10 years ago and it is now worth £165,000.
As the kiddies have now nearly gone we are thinking of upping sticks to start somewhere fresh with the equity.
My question.....
If we sell the house for £165,000 is it a simple case of paying off the £37,000 we owe on the mortgage and cashing in the endownment, leaving a nice wedge of cash to buy somewhere outright?... or am I missing something obvious?

silvercar

sell the house for £165k pay off the mortgage of £37k leaving you with £128k. buy a house with this if that is enough.

Post details of your endowment on the mortgage board. (monthly premiums, company, assured sum, projected amount etc). There are 3 options with it: sell it, make it paid up ie don't pay anymore into it but not cashing it in, or keep it going. Cashing it in is usually a last resort. Remember that it gives you valuable life insurance.

advent1122

Thanks.
£128k is more than enough for us to buy a smaller house.
I think I will keep the endownment going as it is only £61 a month.

So it is as simple as I thought.....decisions decisions.

Mrs_pbradley936

I would keep your endowment going. My sister-in-law was in this position a couple of years ago she originally bought for £24k sold years later for £180k and bought her new place for £120k. The edowment when it did mature was all theirs and none of it spoken for by mortgage.

Ian_W

pbradley936 wrote:

I would keep your endowment going. My sister-in-law was in this position a couple of years ago she originally bought for £24k sold years later for £180k and bought her new place for £120k. The edowment when it did mature was all theirs and none of it spoken for by mortgage.

I'm sorry pbradley but that is very poor advice indeed!
There are umpteen insurers who who issued endowments and some are still good policies despite their adverse image. However, others [even with the same companies] are complete dogs and you'd be better surrendering them and sticking the money in a moderate savings account. Which your S-I-Ls was is anyones guess, it might have been a good one, it might not and the lump sum could have been much so much bigger if it was the latter if they'd cashed it in earlier and invested it elsewhere.

As silvercar says, post some details on the mortgages and endowments board and I'm sure you'll get a better idea of whether it's worth keeping. Company, current surrender value [ring and find out], projections for matuity, premiums and start/end dates should be enough.