Mortgage advice needed

homeluxury

Having just made the final payment on a 25 year endowment policy, which has a short fall despite winning a claim for being misold, im told by my mortgage lender that i still have another 8 months left on my mortgage.

This i knew, as the mortgage has two sub-accounts, one interest only, for which the endowment that has just ended was for. The other sub-account is an interest and repayment mortgage.

My question is, why are the bank saying i have to continue paying the monthly mortgage for the first sub-account, even though the endowment that was linked to it has finished, and when i believe that when i took out the mortgage it was for 25 years and not 25 years and 8 months.
Surely now the endowment has ended, then so should the monthly mortgage payments, or have i got that wrong, otherwise what happens to the monthly mortgage payment as it no longer has an endowment linked to it. Will that payment be subtracted from my outstanding balance?

The banks response so far has been, you need to somehow make up the shortfall, or nearer the time we will see if we can extend your mortgage term.
These things i know, but what gets me, is the fact that im told i have to keep making the monthly repayments on something that was only due to run for 25 years and no longer.

Thank in advance for any ideas.

kingstreet

Have you paid the mortgage off, the one you say now has eight months longer to run?

If you haven't paid it off, then of course you have to continue to pay. Where's the proceeds of the endowment policy?

homeluxury

The mortgage has not been payed off, as it still has eight months to run.
you are saying, i still need to pay my interest only sub-account, even though it no longer has an endowment linked to it?.
The other sub-account is half repayment and half interest, with an endowment.
The proceeds are in my bank account.

TrickyDicky101

Then maybe you should pay the proceeds into your mortgage account??? How else do you expect to pay off the outstanding balance?

homeluxury

I know that TrickyDicky. What im asking, is why do i need to continue paying the mortgage payment for 25 years 8 months and not 25 years, which is what i believe it was for when i first took it out.
Where does the other eight months come from? Surely an endowment linked mortgage runs for 25 years when taken out at the same time as the endowment policy, or is that me thinking thats wrong.

TrickyDicky101

You will have a shortfall even after you have payed in the proceeds from the endowment, this then needs to be cleared. You will do this by continuing to make monthly mortgage payments - assuming the outstanding balance isn't huge then your monthly payments will eat swiftly away at the outstanding balance as they will be mostly capital repayments (as you will be charged interest on only the o/s balance and not the original balance). You need continue your monthly payments only because you have a shortfall - if you had no shortfall, you wouldn't need to continue the repayments.

Thrugelmir

Homeluxury, How did you end with 2 sub accounts on your mortgage?