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Small shortfall in endowment policy, but still might be in trouble.
Mistral001
Posts: 5,432 Forumite
I have a friend whose endowment policy will not pay off the interest-only mortgage which is coming to its end in a few months time.
He says that he cannot pay the £5000 shortfall and is unlikely to be able to get a loan from his bank or extend the mortgage because of lack of income at the minute.
It looks like he will lose his house for the sake of £5000 and short of lending him the money myself, I cannot think of what else he can do. Does anybody have any suggestions?
He says that he cannot pay the £5000 shortfall and is unlikely to be able to get a loan from his bank or extend the mortgage because of lack of income at the minute.
It looks like he will lose his house for the sake of £5000 and short of lending him the money myself, I cannot think of what else he can do. Does anybody have any suggestions?
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Comments
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How is he paying the interest only mortgage payment at the moment ?
He needs to speak to the lender and see if they can extend the term by a couple of years0 -
How is he paying the interest only mortgage payment at the moment ?
He needs to speak to the lender and see if they can extend the term by a couple of years
Good point. The mortgage is very small - he said less than £100 per month for mortgage interest/endowment premium (although I think it might not even be as much as this). He is the type that lives on £10 food per week and can just about afford to pay it but is worried that he will not be able to convince a lender that he can afford it as his income is so low at the minute.0 -
Can you confirm his age and value of property. Thanks.0
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Let_Us_See wrote: »Can you confirm his age and value of property. Thanks.
Age late fifties
Not quite sure of value of property, but at a guess £100 to150k0 -
There is virtually no chance the lender will attempt to seek possession.
If it is unwilling to accept an arrangement to clear the shortfall between then and State Pension Age then a complaint is likely to be upheld.0 -
No my usual area but there should be lending options here based on the equity in the property rather than his income.
He needs to speak to an equity release specialistI am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Late fifties so he could ask the lender to extend the term until he is 65 or maybe 70.
Use the money from the endowment to pay a lump sum off the mortgage when it matures and hopefully pay the shortfall off over the next couple of years.
Good News is that the short fall is only £50000
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