Endowments end in 6 months-£6k shortfall, What to do?

bob_dob

Thrugelmir and Lonestarfan, a massive bthank you to you both!!

Lonestarfan, a special thank you to you for helping clarify matters for me, my friend and his partents! That helps!!

Well if I'm honest, the idea of the state continuing to pay the interest whilst the parents pay the capital is an attractive idea to them so that would be the preferred option. However, if they fail with getting the extended terms, a personal loan would be the only other option I guess?

By the way, would the fact that their house is worth something like £140,000 help regarding extending the loan for such a small amount like £6,000?

maninthestreet

Do your parents have any assets they could sell to raise some or all of the £6000 shortfall?

Bufger

Can they not find at least £1k worth of stuff to sell? You'd be suprised at how much people can hoard. I found a £3k pocketwatch amongst my grandfathers possessions when I was asked to help sort his house out. Im not even sure if he knew how much it was worth.

If they're in a desperate situation its time to declutter, sell stuff and see what financial situation that leaves them in. The less shortfall there is the higher chance of a suitable loan.

silvercar

If the state is paying the interest on the 21k and your parents paying the endowment premiums and you manage to get the lender to extend the term, the best thing to do is not use the endowment payout to reduce the mortgage. Instead put the 15k in the highest interest account you can find and let the state continue to pay the interest on the 21k. That way you have the interest generated on the 15k payout plus the £50 a month no longer needed to serve the endowments as money that can be used to reduce the capital owed.

michaels

silvercar wrote: »

If the state is paying the interest on the 21k and your parents paying the endowment premiums and you manage to get the lender to extend the term, the best thing to do is not use the endowment payout to reduce the mortgage. Instead put the 15k in the highest interest account you can find and let the state continue to pay the interest on the 21k. That way you have the interest generated on the 15k payout plus the £50 a month no longer needed to serve the endowments as money that can be used to reduce the capital owed.

Depends, that level of savings might impact on SMI eligibility?

Whhy is equity release not a possibility. IN the end the friend's parents have a valuable asset so why would they not want to spend some of that capital they have saved over their lifetime during their retirement?

silvercar

michaels wrote: »

Depends, that level of savings might impact on SMI eligibility?

I assumed there were no savings, or the 6,000 shortfall wouldn't be such an issue. £16k savings allowed when you claim SMI, so if all they have is the 15k payout it could work.

Goldiegirl

If all else fails and the £6000 cannot be raised, and the lender won't agree to an extension of the mortgage, perhaps they could sell the property and downsize, then the problem would be resolved, no mortgage at all.


I know they probably wouldn't want to move from their long tome home. But sometimes needs must.

bob_dob

silvercar wrote: »

I assumed there were no savings, or the 6,000 shortfall wouldn't be such an issue. £16k savings allowed when you claim SMI, so if all they have is the 15k payout it could work.

Hi and thank you so much for your post, what an interesting idea.
Please can I ask is there a savings/asset threshold for SMI being paid then?

Another question is they currently receive £226 pension between them (The father gets £166 and the Mother £60) which includes pension credit. Would owning the house have an impact on these benefits?

bob_dob

Hi, anyone?

shop-to-drop

Could u and siblings raise the shortfall between you to gift them. That would be top of my list of solutions if it was my parents.