Remortgage advice/renegotiate current mortgage

Interestedinthis

Apologies for being upset. I shouldnt be upset. I've got so many more options than others. onward and upward.

holly_hobby

Hey listen, don't beat yourself up about this ..... you have an error due to an oversight, which you've recognised, and are trying to remedy.

You've not come on the board, with no ideas, just looking to blame and for peeps to suggest a way out of it all (as some posters do !) .... Instead you have sat down and looked at the issues, contacted your lender, looked at figs, started overpaying, all before asking for anyone else's thoughts on here .... all responsible and commendable, and we will help with ideas/guidance anc comment as much as we can ... x

TFC = Tax Free Cash from your pension at retiremet (sorry for the shorthand ... occupational hazzard I'm afraid !)

Holly xx

Interestedinthis

holly_hobby wrote: »

Hey listen, don't beat yourself up about this ..... you have an error due to an oversight, which you've recognised, and are trying to remedy.

You've not come on the board, with no ideas, just looking to blame and for peeps to suggest a way out of it all (as some posters do !) .... Instead you have sat down and looked at the issues, contacted your lender, looked at figs, started overpaying, all before asking for anyone else's thoughts on here .... all responsible and commendable, and we will help with ideas/guidance anc comment as much as we can ... x

TFC = Tax Free Cash from your pension at retiremet (sorry for the shorthand ... occupational hazzard I'm afraid !)

Holly xx

Gosh you should be the England Manager you are so motivational :T
You've made me feel positive about my character. Thank you.
I'll keep at it and let you know how I get on. X

holly_hobby

Good man .... here when you need us

Holly xxxxxx

silvercar

Im going around in circles about the surrender of the endowment policy.
I could do it now and get £14600 or leave it until May 2017 when the mortgage is supposed to be repaid when it might be worth more then.

There was a well respected poster on here called EdInvestor, who sadly died. She had been a financial journalist. Her advice was to work out what you would get if you put your current surrender value in a high interest cash savings account and also saved the premiums you then wouldn't be paying. Compare that total at your end date to what the endowment is supposed to achieve and see which makes more sense.

Interestedinthis

silvercar wrote: »

There was a well respected poster on here called EdInvestor, who sadly died. She had been a financial journalist. Her advice was to work out what you would get if you put your current surrender value in a high interest cash savings account and also saved the premiums you then wouldn't be paying. Compare that total at your end date to what the endowment is supposed to achieve and see which makes more sense.

Thanks.
I will do some calculations. I'm sort of trying to understand the endowment letters now. So I will firstly do that calc about high interest. Then I want to understand the growth rates in the shortfall letters better and Holly's given me some ideas of data to look into.
I've also got to understand the plan value. I get 2 letters annually. One is the shortfall letter and one is the plan value. The plan value is less than the SV which I don't understand. It's been going 19 years and doesn't seem worth much

Thrugelmir

silvercar wrote: »

Borrower: To repossess would mean a quick sale at below market value, penalising me unfairly. To allow me to continue would not harm the lender. To allow the repossession hurts me far more than the lender and lenders are meant to abide by TCF (treat customers fairly)

TCF does not overule English contractual law which has been in existance for decades.

So customers expecting an easy exit route may be in for a shock.

Matters will be dealt with by lenders on a case by case basis. With extended terms offered where appropriate.

Until closer to the contract end date. It's therefore in the customers own interest to show willing to reduce the debt. Either by overpaying, downsizing etc. To put themselves in the best possible position from an underwriting perspective to be granted a new mortgage.

Interestedinthis

Thrugelmir wrote: »

TCF does not overule English contractual law which has been in existance for decades.

So customers expecting an easy exit route may be in for a shock.

Matters will be dealt with by lenders on a case by case basis. With extended terms offered where appropriate.

Until closer to the contract end date. It's therefore in the customers own interest to show willing to reduce the debt. Either by overpaying, downsizing etc. To put themselves in the best possible position from an underwriting perspective to be granted a new mortgage.

Thanks Thrugelmir. Good to get perspectives. I hope by showing a good history of overpayment then I'll be looked on more favourably.It can be quite infectious being determined to be debt free.
I'm looking at cost cutting, and increasing income so I can really make a dent in it.
I've made a few notes from this site about making sure I get in a good underwriting position especially by paying off the cc and making sure I close the card accounts down so it doesn't look like I've got too much credit available to me when I'm ready to ask for a term extension or remortgage.
Any thoughts on the shortfall letter saying 3.5% might yield £23900?
My policy sum insured was for £77500 but the letter says they anticipate 5.75% being a reasonable rate of growth but as I've only got 14 years left on it and its run for 19 years already then I'm wondering will I even get £23k?

holly_hobby

The rates aren't what the provider thinks the policy will do, they are the prescribed rates that the industry regulator insists all providers issue estimated maturity values under.

The reality of how your policy actually performs may be somewhat different to the illustrations.

Your final maturity value (assumed it is a with profits low cost endowment) will depend upon the basic sum assured (BSA), attaching reversionary bonuses (which aren't gted thru the lifetime of the policy, but once added can not be removed), and any (again non-gted) terminal bonus that may be added at maturity.

To see if you believe the policy is worth servicing until maturity, you may want to evaluate how the policy is actually performing to date, and any loss of benefits on early surrender, to which you could ask your provider such things as :-

• If the policy carry's a mortgage endowment promise (or something along similiar lines)

• What are your current attaching reversionary bonuses

• What level of reversionary bonuses have been paid each individual yr. Did you receive one last anniversary, if so how much ?

• What's the pattern of bonus payments, are they increasing, declining or static. And based on past additions and the pattern , how likely do you think it is that the plan will meet the target sum, IF for example future attaching reversionary bonuses continue along the same vein until the end date. This really is a very rudamentry evaluation, but may be a little more realistic when guessing the future, than the standard issue EMV statements, that in reality may have little baring on your policies actual performance - both good or bad !

• What have been the recent terminal bonuses paid by your provider ? Again, are they increasing, decreasing ... indeed are they paying any TBs at all ??? (as many providers aren't). So although they clearly can never be be relied upon as being paid - this info and pattern may again give you a possible inkling as if whether its reasonable to hope the Firm may pay a TB on maturity, and what the ballpark % recent receipients have recd (although I can not stress enough, TBs both in payment and amount are not gted, and wholly dependant upon whats left in the pot after adjustment for the Firms operating requirements/bonus allocation, etc - which is why a number of providers are finding that they simply no longer have any capital available to issue under a TB)

• What would be the cost of servicing the plan throught to maturity, when compared to rough guesstimates on the above - break even, up or down ?

• What would be the cost of replacement life cover if reqd (and if you surrendered you plan)

• To determine (following on from Silvercar's comments), IF it would be best to use any SV to reduce mge borrowings OR instead place into a high interest (eg notice account) until redemption - would be to compare if the NET (of tax) returns under the deposit account, exceed the payable mge interest. Whilst working into the figs any mge early repayment charge (ERC) if you don't stagger or qualify for penalty free lump sum repayments, and the account notice period. As you clearly don't want to be paying more mge interest than you are actually receiving from the capital on deposit - so how quickly you can withdraw the monies and paydown the mge, to at least balance the scales will be v important in any thorough assesment (again taking account of any ERCs).

Its an awful lot to dismember I know, and you may want to engage the assistance of an IFA to guide and assit with the comparison figs discussed .....;)
Hope this helps

Holly xx

Interestedinthis

You're working late again Holly ! Thank you.
That will be a job for Friday when I can have some privacy on the phone and at home with the docs.
I was thinking I need to get an IFA anyway as what started all this was me filing the pension statement etc and thinking I wonder if I need to do AVC's now I've got a bit of spare monthly cash lol. No spare cash now for a while lol.
Isn't it strange how I'm 48 and have noticed the term is wrong when I can actually do something about it. That's why I said I shouldn't be upset as I've got more option than seem people. I definitely want to help others more now.
At first I thought I was going to have a nervous breakdown when i noticed it on the statement but now I can sleep a bit better with a plan under my belt but the one thing that does noticeably get my blood pressure up is the thought of what would have happened if I'd not noticed til the day the lender asked me to pay in full in May 2017!
I'm trying not to think about it.
I will arrange an appt with an IFA. Thanks for everything.