Endowment shortfall

McKneff

denis06 wrote: »

I have an endowment shortfall estimated at £30,000 in December 2013. The endowments are with the old Norwich Union and the PMAS. I am 62 next birthday so obtaining a remortgage is nigh on impossible. I have no savings and heavy amount on credit cards. I have already downsized and converted some of the mortgage to repayment. That still leaves me with the above shortfall.
Looks like we are goig to have to sell up and live in a caravan in our old age! Each and every financial advisor can offer me no way forward. So much for being encouraged tio become a property owner when I was younger.

But youve had umpteen years of warnings about endowment shortfalls, sorry to be blunt but you should have dealt with it when you got your first or 2nd letter.

it has absolutely nothing to do with the people who encouraged you to be a homeowner, just the opposite in fact.

TrickyDicky101

Inflation will have significantly eroded the real value of the capital advanced when you took the mortgage out. Indeed, assuming you have held the property for 25 years then you have benefited to a large degree from house price inflation over your period of ownership.

maisie1234

My husband had an endowment when we met. We have had shortfall letters for a number of years. I do think some people have stuck their heads in the sand. Someone else will sort, its up to the government, it will be alright in the end...

Well, its not! We took a decision to take the potential shortfall and add to our repayment mortgage many years ago. Some people have just ignored these warnings. The thing is - if you have been in the same house (and especially if you are in London and the SE) you will have gained from increasing house prices. So, unless you have really buried yourself - you will be able to sort this out!

gpcracer

I Have a mortgage shortfall yes i know its probably my own fault for ignoring the obvious i recieved the warning letters , i had a friend at the time who was a financial adviser and his words where they are probably just trying to get more money out of you ....

I Was very naive and YES i should have taken more notice on the warnings .... My Problem is we have a shortfall of ~£ 11:600 i know this is not a huge amount of money and we just thought when we got the shortfall we could deal with it ...

We went to Nationwide who i have banked with for nearly 30 years and tried to get a loan to pay of the shortfall , surprisingly initially they said we could have the loan as we have been good customers we have had several loans over the years and always paid them off ,but when i said it was to pay a shortfall off they said we could not have the loan .... I Don't understand why , would it be cheaper and easier just to go and have a word with are Bank who we have a mortgage with and extend it for 5 years ....

What are are options and is it worth going somewhere else to try and get a loan .... Just a little confused right now why we have been turned down ....

The other thing that annoys me is we took are Mortgage out with Bradford and Bingley and through no fault of are own this has been passed on to Santander so we find we have to deal with a bank rather than a building society that we took the morgage out with ...

Any advise on how to pay back the Shortfall would be very greatful ...

Thrugelmir

Apply for a personal loan and say its for a car.

gpcracer

I'm just worried that now i've applied for a loan and been turned down once that it will be on record that i have been turned down already ....

holly_hobby

Ok, I wouldn't advise applying for PLs and lying about the purpose.

What I would do, is approach your lender now, advise them of the situ regarding your endowment ie that upon maturity there MAY at current EMVs (which are just estimates) be a shortfall to target of £11,600 - of which you don't anticipate having access to additional funds to settle at the scheduled redemption date.

Ask them what options they would offer you, should there be a shortfall at redemption. It is likely (subject to status and under TCF) that they will offer you upto a 5 yr extension re the sfall amount, which will be payable on a capital and interest repayment basis.

IF, for whatever reason they refuse, and there is no room for a term extension to deal with any SFall, then at least you have 12 mths from now to source a solution, be it obtaining/saving capital to meet what (if any) sfall sum is realised at endowment maturity, or the marketing of the property if sale is the only option (ignoring lifetime mges for the time being).

But if the sfall does comeout circa £11k, I really can't see them refusing an extension to be honest ... but only they can advise what their stance WILL be.

Hope this helps

Holly

gpcracer

THX I Really appreciate your advice so far i did not make myself clear are mortgage really has been a mess from the start

We had 4 endownments which have all matured we have the money sat in the bank waiting to pay of the final mortgage which is due at the end of March ... We are £11.600 short of the final figure ...

So do you recommend it would be easier just going straight to are lenders to arrange an extension ... Will we have to pay lots of fees to arrange this ....

Would this small extension just be treated as a new repayment mortgage on a lower interest rate or would we just carry on paying the same amount as we do now ....

Has anyone else tried to get a personal loan to cover a shortfall or would you advise we just go straight through Santander ..

holly_hobby

I would firstly approach your lender, discuss the situation you find yourself in, and ask for their assistance to a solution and take it from there.

Hope this helps

Holly

gpcracer

Ok Thx for the advice it looks like i need to contact sanatander
as it looks likely that i will have to extend my mortgage to payback the shortfall amount could i or would it be possible for me to shop around or switch this part of my mortgage to another lender ...

Or would it just be a lot less hassle if i stick with Santander ...

Sorry for being a complete newbie with all this ...