Advice on selling an endowment policy?

spendleb

Hi all, long story but I am splitting from my wife later this year, in order to do this I need to remove some of my debts otherwise I won't be able to afford to pay the mortgage on the family home (agreed to pay this as I don't want her and the kids to have to move) and also my rent/bills etc.

Had an idea last night to sell the endowment, it matures in 12 years way ahead of the mortgage anyway and it's not going to come anywhere close to what it was intended, also we will sell our house anyway once the kids are old enough.

Obviously want the best price but also don't know who to trust, are there any recommendations for trustworthy companies to sell too?

PS I know best advice is to keep it to maturity but I can't see any other way of being able to move out at this point, it's my only option.

CloudCuckooLand

Check with your Lender what they would want you to do, if the endowment was no longer underpinning the mortgage.

May insist on conversion to repayment basis, which presumably puts you back into a hole monthly outgoings-wise.

spendleb

CloudCuckooLand wrote: »

Check with your Lender what they would want you to do, if the endowment was no longer underpinning the mortgage.

May insist on conversion to repayment basis, which presumably puts you back into a hole monthly outgoings-wise.

Does it matter though given we will sell the house in 12 years time anyway and pay back in full, it was a £180k mortgage and the house is valued at £230k, the endowment was only for £50k. All the statements suggest we still owe £180k (lol) so if we sell the house we can pay that back in full anyway, the endowment was taken out way before the mortgage was?

HGF

I'm in exactly the same boat.

https://forums.moneysavingexpert.com/discussion/2992076

First find out what kind of endowment it is.

If it is 100% with profits you may well be able to sell it on to a 3rd party and get more than the surrender value. Also if its got bonuses etc.

If its a unitised with profits you are not in a very good position as there are few (if any) people looking to buy these and surrender value is likely to be your only option - it depends what you will get as the market goes up and down so it may not be what you expect.

If you find out any more I'd love to know.

CloudCuckooLand

Saying you will sell is not usually accepted for Interest Only mortgages.

Policy varies by Lender. Ask them.

spendleb

HGF wrote: »

I'm in exactly the same boat.


First find out what kind of endowment it is.

If it is 100% with profits you may well be able to sell it on to a 3rd party and get more than the surrender value. Also if its got bonuses etc.

If its a unitised with profits you are not in a very good position as there are few (if any) people looking to buy these and surrender value is likely to be your only option - it depends what you will get as the market goes up and down so it may not be what you expect.

If you find out any more I'd love to know.

What a nightmare, will get the paperwork out tonight and see what type it is, sure the financial advisor saw me coming all those years ago!

HGF

spendleb wrote: »

PS I know best advice is to keep it to maturity but I can't see any other way of being able to move out at this point, it's my only option.

Don't believe that, in some cases you are throwing good money after bad.

Work out what you will pay monthly between now and the end of the policy. Then look at the projections. You'll find that the difference could be bettered by investing your money elsewhere in other types of investments.

spendleb

Still no idea why I need to tell the lender what I am doing? Surely all they want to know is that I am paying the mortgage every month? In 12 years time we sell up and pay off the mortgage debt left o/s by using the house sale money, why do they need to know the small endowment no longer exists? No chance of not being able to pay off the mortgage in the future too as the wife (or shortly ex wife) mum's come into a very large inheritance she has put aside for her daughters future.

HGF

Oh and here's other things

1) go after whoever sold the policy for mis-selling. We were offered £800 for this the other week. Its a basic calculation but you can ask the Ombudsman to redo the calculation. The offer from the seller will no longer stand if you take this option but its likely to be reinstated if the Ombudsman agrees. Don't use a 3rd party for this! Its likely you'll get an offer anyway.

2) go after the company managing the policy for under performance of the policy. This is more difficult to prove as you might have to have evidence that they guaranteed that it would reach the target amount. Obviously this is more difficult to prove but worth fighting (if you have a few months).

Anything else just shout - its trial and error.

HGF

spendleb wrote: »

Still no idea why I need to tell the lender what I am doing?

You do need to tell them. They are letting you off with part of the monthly payment as your endowment is doing the work elswehere.

However if you remortgage for the full amount (eg less endowment) then you can do what you like with it.

CloudCuckooLand

spendleb wrote: »

Still no idea why I need to tell the lender what I am doing?

It is their £50k...