Endowment ends 4yrs

pinkykat

Been sent a letter from NRock telling me my mortgage ends in 4yrs and to tick a box on how I will be paying it off.
i.e: Investment plan
endowment policy
get a quote to convert my mortgage to a full repayment basis.
It says that I have to send back the letter telling them what I am doing.

I will tell you my circumstances hear goes:
Have two endowment policies one for £26.63 and £28.71 with different companies but one finishes before the end of the term time. And dont know what to do about that?
I am on benefits and the DWP pays some of the interest and I put the difference to.
There is going to be a shortfall on both the policies.
My mortgage is for £28,000.
I would love to change it to the repayment mortgage so that I am actually going to be paying off the mortgage but, think this would be too expensive and dont really know how the DWP would be affected. Also, then I would have to still pay the endowments because I dont think it is worth cashing them in or is it.
Then there is what happens at the end when I have no income to pay off the full loan?
Oh, I must say that I a disabled so unable to work and wishing I could.

Mallotum_X

How much is the shortfall?

If its not too big you could start overpaying by a modest amount to cover the shortfall and then use the endowments for the balance?

pinkykat

Its £8,000 so dont think it would make much difference paying a little more but, its an idea so thanks

nomoneytoday

£8000 over 4 years is £2000 a year (minus a bit of credit interest)
Can you spare £40 a week?
If not then £20 a week would give you £4160 plus approx £200-£300 interest in that time, taking you over half way

Annisele

If you're worrying that you'll get to the end of the term and the lender will repossess instantly - stop worrying. Lenders are used to endowments having shortfalls, and they do make an attempt to try to help people.

If you're £8k short at the end of the term, you might be able to convert that £8k to a new repayment mortgage over a new term (depending on things like your age and credit rating - but no lender is going to be particularly keen to repossess for only £8k so long as the borrower is cooperative).

Changing to repayment doesn't have to be an "all or nothing" deal. It's usually possible to change a small portion of the mortgage to repayment, which might be an option for you.