Am I reading this wrong? A little advice, please!

HooCanTellMee

Hi All,
Had some really good advice recently, so am hoping someone can settle a dispute between myself and hubby!
Got flexible mortgage, changed from interest only when endowments hit the fan!
Endowment finishes this month. Will get a cheque to pay to building society.
Monthly statement says
Balance xxxxxxxxxx
Interest due xxxxxxxxxxxx
Payment made xxxxxxxxx
Old school maths, only managed GCE O Level, so add interest due to balance, then take away payment made will give new balance? I read "balance" to be the amount we borrowed, if not please put me straight!
When I get cheque from Pru, and pay it to building society, the balance should go down by this amount? Can only deal with this mortgage by phone, and they seem to be agreeing with me, even suggested that we just paid the balance, and finish mortgage! Can there be anything hidden in plain sight?
Hubby doesn't think we can possibly have finished the mortgage several years early, but can't say what he thinks will happen, this from man with maths degree! We have paid off lump sums when we could and kept the payments constant, even when the interest rate went down.
We only get one mortgage statement, only have one mortgage. I can't see how I am wrong, we have kept our payments at a set rate, whatever the interest rate was, and it has been very low for a while, we have also paid lump sums when we could.

kingstreet

So cutting through all that, basically you are asking if the year end balance is the same as the figure to settle the mortgage?

Maybe. You'll have to ask the lender if there are any fees payable over and above that to redeem the mortgage in full.

hcb42

How much is the cheque from the endowment company?

What is the balance on your mortgage? I.e. how much do you owe? How much did the last statement say

If you have been overpaying, maybe hubby is right, but only you two have the figures to be able calculate this

HooCanTellMee

Wow, you are really quick!

kingstreet;-
Monthly statements, but yes I am asking if the balance is the amount owed!(I can't see it any other way). This balance has been going down, due to overpayments. I am fairly grounded, and know there will be an early redemption payment and possibly other fees to close mortgage. To be honest, not too worried about this. The main confusion is my thinking that if endowment cheque will almost clear the balance, then it will diminish the mortgage by this amount. My Hubby won't accept my word for it, and I am beginning to doubt my sanity!

hbc42:-
Endowment cheque is almost equal to balance shown on Flexible Mortgage Statement, in my mind it almost pays the mortgage off, my husband doesn't agree, and with his having a degree and my being a homemaker, I am hoping someone will be able to either explain to me where I am wrong, or help me to clarify for him.

My thanks to both of you, sorry if my thread was longwinded, spent most of yesterday evening trying to make sense of situation.

maninthestreet

Without knowing the exact figures involved, no one on here can be sure.

HooCanTellMee

Hi again,
It isn't the maths we are having problems with, just whether the balance on the statement is the amount loaned. If it helps balance £85,000, endowment payment cheque is £83,500. If cheque paid to building society, balance owing would be £1,500? If this is right, then the endowment money will almost clear the mortgage. Then if we wanted to clear mortgage we would have to pay £1,500 plus any fees for early redemption etc. My husband doesn't see how this works, he can't accept we have almost paid off the house. Says there will be cloud hanging overhead till end of term, which would not be for another seven years. Can there be anything hidden? Am now seriously doubting my sanity, or his!

kingstreet

HooCanTellMee wrote: »

Hi again,
It isn't the maths we are having problems with, just whether the balance on the statement is the amount loaned. If it helps balance £85,000, endowment payment cheque is £83,500. If cheque paid to building society, balance owing would be £1,500? If this is right, then the endowment money will almost clear the mortgage. Then if we wanted to clear mortgage we would have to pay £1,500 plus any fees for early redemption etc. My husband doesn't see how this works, he can't accept we have almost paid off the house. Says there will be cloud hanging overhead till end of term, which would not be for another seven years. Can there be anything hidden? Am now seriously doubting my sanity, or his!

You are correct, based on the figures given. If you "owe" £85,000 and your maturity value is £83,500, then you do indeed, only owe £1,500 on your mortgage.

Tell your other half the sun has just come out and the glass is, indeed, half full today.

kingstreet

Worth bearing in mind.

If you've got a flexible mortgage, if you leave a small balance outstanding you should be able to "redraw" any overpayments you've made at any time, should you have need of cheap, flexible finance for anything.

HooCanTellMee

Thanks kingstreet,
That is how I felt, but he has got me convinced there is a black cloud out there! I, unlike my better half, can see this as a reward for being careful, he thinks I am on cloud cuckoo! Will wait for letter from building society to confirm my thoughts then bask in glory! Now we just have to get two lads through Uni! Back to the breadline, ha, ha.

kingstreet

HooCanTellMee wrote: »

Thanks kingstreet,
That is how I felt, but he has got me convinced there is a black cloud out there! I, unlike my better half, can see this as a reward for being careful, he thinks I am on cloud cuckoo! Will wait for letter from building society to confirm my thoughts then bask in glory! Now we just have to get two lads through Uni! Back to the breadline, ha, ha.

Like I said. Leave a small balance outstanding to give you a line of cheap credit when you need it.

blueberrypie

HooCanTellMee wrote: »

My husband doesn't see how this works, he can't accept we have almost paid off the house. Says there will be cloud hanging overhead till end of term, which would not be for another seven years. Can there be anything hidden? Am now seriously doubting my sanity, or his!

I suspect your husband can't see how this endowment can possibly be paying off your mortgage early - especially given how much we've heard about endowment shortfalls in the last few years.

And he's kind of right, because the endowment payout wouldn't be eradicating almost your entire mortgage balance now, if you hadn't been making all those overpayments. It's those which have reduced your mortgage balance, probably by quite a lot. And so the mortgage balance has come close to the endowment payout, rather than the other way around, if you see what I mean.

Show your husband one of the websites that demonstrates the effect of overpaying (Egg has a good one, assuming they haven't sold that off yet!)

And then, when it sinks in, congratulate yourselves on having been so clever as to make all those overpayments, and take yourselves out for a nice meal :-)