Endowment Mortgage - Too late to claim?

SallyJane_2

Hi

Worried sick because I have stupidly ignored warning letters for several years about our endowment mortgage not doing well enough - it has just under 2 years to run and there's a shortfall of nearly five thousand pounds. My only excuse is stress because of two close members of my famiy being killed in separate accidents together with looking after my elderly father who was and is still unwell, and the last eight years have been tough emotionally and financially, although the money side of things eased because of the help and advice I was given by people on this forum, for which I am still very grateful!

Anyway, I was wondering if I can claim for mis-selling. All I can remember is that we switched mortgage from a building society to a bank in 1991. I can remember someone, either at the bank or at our house, saying that there would be enough money left over when the mortgage was paid off for a cruise. This has always stuck in my mind, but I can't remember much else.

I've had a look at the latest document received earlier this week and it says that the sum assured is just over ten thousand pounds and it started in October 1991. We bought the house in 1988 when our son was 10.

If we can't find the money, will our house be repossessed? Would the lender let us extend the mortgage?

I'd be so glad of other people's advice. Thanks.

opinions4u

You have almost certainly timed out on a claim for mis-selling.

Your house won't be repossessed.

The lender will almost certainly extend the mortgage.

How much do you anticipate the shortfall on the policy being? When is the mortgage scheduled to end? £5,000 over 2 years would be £210 a month.

Which life assurance company is the policy with? What type of policy is it? Are you in a position to overpay the monthly payments to your lender in order to start reducing any potential shortfall?

dunstonh

Anyway, I was wondering if I can claim for mis-selling.

Were you mis-sold is the first thing?

The second thing is that you have three years to complain from first being notified of a high risk of a shortfall. Typically that first point was around 2002-2005. Most endowments became timebarred between 2006-2008. You can check your statements as they often give the final date. Or ask the provider.

I can remember someone, either at the bank or at our house, saying that there would be enough money left over when the mortgage was paid off for a cruise. This has always stuck in my mind, but I can't remember much else.

Not exactly grounds for complaint. Being told you could have enough money at the end for a cruise is not a mis-sale.

it has just under 2 years to run and there's a shortfall of nearly five thousand pounds.

So, actually you are probably better off than had you had a repayment mortgage. Typically endowment mortgages were cheaper than repayment mortgages. If you were £25 pm cheaper than thats £6000 over the term. A £5000 shortfall means you are £1000 better off.

If we can't find the money, will our house be repossessed? Would the lender let us extend the mortgage?

Interest rates are at an all time low. Start overpaying now. As long as you have no arrears, most lenders will happily extend the mortgage by the shortfall amount for up to 5 years.

SallyJane_2

Hi and thanks for the fast reply My mortgage ends October 2012 and the shortfall is £4,800. The document I received this week is called a Unit Statement and it says the policy type is a Barclays Endowment Plan 1. I could manage, at a push, to pay an extra £70 a month to my lender, so if I did that then it would help a bit, wouldn't it? I am so relieved to read that the house won't be repossessed.

I know I should have looked at the problem years ago. I've dealt with and solved so many other problems in the last eight years but for some reason I couldn't/wouldn't face the mortgage one. Thank you so much for replying to me so quickly!

SallyJane_2

Hi dunstonh and thank you too for your quick contact. I didn't really think I would be able to claim - I'm just grasping at straws I suppose. I find the comparison between endowment & repayment mortgages very interesting. I am going to start overpaying the mortgage straight away - can't pay very much over but will do what I can. I've never, ever been in arrears with the mortgage so, if/when the time comes, the lender will hopefully extend the term for me.

Thanks again for your advice.