endowment please help

kimberlylovespauly

Hi
i have recently been sorting through my partners paperwork due to him looking to claim ppi. He took out an endowment mortgage with Barclays in 1995 the mortgage was for 33,709.38 to be repayed over 25 years. On the paperwork there is a mortgage indemnity premium added to the mortgage 459.38 the mortgage rate was 4.60%.approximate net cost of the loan is 111.97 monthly. endowment/ lifestages plus premium 54.15 a monthnet cost 166.12 monthly total loan costs plus life cover premium 49,836.00.
My partner payed his mortgage monthly then in 2009 he remortgaged so he could pay off his remaining mortgage.He did this in February 2009 and the total he had to repay was 34,355.98 which after paying for 14 years was more than he originally borrowed. His final monthly payments were around 220.00 a month. Could someone please explain all this to me as to me it seems like he has been paying for nothing thanks

G51shopaholic

My partner & I took out a mortgage in 1988 with Nationwide. 25yr Endowment mortgage.

Original mortgage £23,500 but after 10yrs we have to repay just over £24,000.

When we queried this we were told that the Building Society only adjusted the payment once a year, therefore as the interest rate had changed and our Mortgage payment hadn't been increased that created the underpayment.

Endowments are Interest only

kimberlylovespauly

The way the endowment works was never explained to my partner he was never told it was interest only he thought what he was paying was coming off the amount he had borrowed he knew there would be interset to pay but because he was young and it was his first experience of having a mortgage he assumed he had been sold the right mortgage but obviously this was not the case as he would never of entered into it knowing he would have payed all that money for nothing
also i have seen on different threads people talking about cashing in these endowments what does this mean as he has never cashed anything in
i am really confused by all the figures as i thought with a mortgage you made a monthly payment and your amount owing went down

kingstreet

So he should have an endowment policy document among his documentation. Contact the provider and establish the current value. This can be used as a method of repaying part of a current or future mortgage.

The indemnity premium added to the loan is the main reason he paid back more than he borrowed. This is additional security for the lender as he was borrowing beyond 75% of the value of the property at the time.

kimberlylovespauly

He paid off the mortgage in 2009 and was not aware of anything being cashed in does that mean he can still do that

and as for the mortgage indemnity should this have been optional

he was never told there could be a shortfall surely this is mis selling

dunstonh

and as for the mortgage indemnity should this have been optional

No. It is mandatory.

he was never told there could be a shortfall surely this is mis selling

Despite all the paperwork showing it was possible? The problem you have is that there is only a window of 3 years from first being notified of a high risk of shortfall to make a complaint on that basis. Most of these went into shortfall around 2001-2004 and became timebarred by 2005-2008. Most endowments are timebarred from complaint. If his isnt then he could still complain.

kingstreet

kimberlylovespauly wrote: »

He paid off the mortgage in 2009 and was not aware of anything being cashed in does that mean he can still do that

and as for the mortgage indemnity should this have been optional

he was never told there could be a shortfall surely this is mis selling

If he has/had an interest-only mortgage supported by an endowment policy providing life cover and the necessary savings element, the plan should have continued.

Does his bank statement indicate the premium is still being paid?

The plan has a value which may be useful to him beyond the short-term knee-jerk reaction to "cash it in" so the first thing he needs to know is if such a plan still exists and if so, what the current value may be.

kimberlylovespauly

"So he should have an endowment policy document among his documentation. Contact the provider and establish the current value. This can be used as a method of repaying part of a current or future mortgage."

he does not have any endowment policy document

can he still contact the provider and establish the current value if he payed the mortgage off in 2009

"The problem you have is that there is only a window of 3 years from first being notified of a high risk of shortfall to make a complaint on that basis. Most of these went into shortfall around 2001-2004 and became timebarred by 2005-2008. Most endowments are timebarred from complaint. If his isnt then he could still complain."

he was never notified of a high risk shortfall he did question the mortgage broker who arranged the remortgage why he had to pay more than he originally borrowed after paying for nearly 14 years and the mortgage broker said he did not know why


"If he has/had an interest-only mortgage supported by an endowment policy providing life cover and the necessary savings element, the plan should have continued.

Does his bank statement indicate the premium is still being paid?

The plan has a value which may be useful to him beyond the short-term knee-jerk reaction to "cash it in" so the first thing he needs to know is if such a plan still exists and if so, what the current value may be. "


he is not paying anything on that mortgage as he paid it of in full but there was never any mention of any thing being cashed in

sorry but i find all this so confusing to me it is like he rented his house from Barclays for 15 years then brought it off them in 2009 when he remortgaged . What happened to all that money he paid in????????

(i tried to use the quote button but it kept saying my message was too short)

kingstreet

kimberlylovespauly wrote: »

monthly. endowment/ lifestages plus premium 54.15 a month

What you need to establish is, was the above actually taken out and paid for the best part of 15 years.

If the plan was never taken out and the premium never paid, there won't be a value as he simply had an interest-only mortgage.

Was he making only one payment all that time, or was he making two?

The mortgage and the endowment are two totally separate plans. Paying off the mortgage would not mean the endowment would stop. He needs to look back into his financial history and study paperwork and bank statements to see what he was paying before 2009 and to whom.