Mortgage shortfall in 9 years. What options do i have?

ACG

Divide the balance outstanding by the number of months - this will give you a ball park figure. You need to add that to your interest only payments.

getmore4less

ACG wrote: »

Divide the balance outstanding by the number of months - this will give you a ball park figure. You need to add that to your interest only payments.

That will always be too much, the higher the rate the more it will be out.

eg; £22k 9 years 3%

balance/(9* 12) £204pm

interest only = £55
repayment = £233

TrickyDicky101

getmore4less wrote: »

That will always be too much, the higher the rate the more it will be out.

eg; £22k 9 years 3%

balance/(9* 12) £204pm

interest only = £55
repayment = £233

..but is perfectly acceptable as a ball park figure

kipperkendall

I was in a similar situation 5 years ago with lots of red letters for two with profits endowments and one unit based endowment.

First thing I did was make regular over payments each month- I could afford £500.

Next I looked set the unit based endowment, took some advice and changed the investment mix for what I hoped would be better returns. Previous mix was too safe and under performing.

Finally I hoped the with profits endowments would do better than forecast. They did!

I monitored all this on a spreadsheet I set up to stay on top of progress. Again this really helped.

End result is that the mortgage will be paid off later this year in full.

At the end of term for the mortgage C & G did indicate that they would extend term by about a year if required. I also believe I could of remortgaged for balance as I am 50 so a viable customer still!

Be interesting to understand your details - age, which mortgage company, what endowments, why you think the is a shortfall.

Sirlaughalot

davenport151 wrote: »

I am in a similar situation and looking to transfer to repayment soon.
Have you checked the actual surrender value at the moment? In our case it was currently better than expected. Though I am looking to cash ours in.
I am assuming yours is also without profits or any sort of promise?

Yes the surrender value is also a little better than expected due mainly to a terminal bonus. It is invested into two funds one with profits, but is closed to new business which i assume is investors code for turkey! The other is still operating normally but my main concern is that are unit(linked) investments which make them unsaleable to other parties and performance is wholly based on good stock market performance at maturity though i believe some smoothing technique is in place.

My main problem would be deciding the best route to take with any surrendered funds if i took that path.

Overpay on the mortgage @ 1.5% or save the surrender sum @ 3.0% Gross Santander 123 current account.

I have no penalties for either the mortgage or endowment policies so unless i`m doing something completely wrong saving the money looks the best option at the present time!

SL

Sirlaughalot

kipperkendall wrote: »

I was in a similar situation 5 years ago with lots of red letters for two with profits endowments and one unit based endowment.

First thing I did was make regular over payments each month- I could afford £500.

Next I looked set the unit based endowment, took some advice and changed the investment mix for what I hoped would be better returns. Previous mix was too safe and under performing.

Finally I hoped the with profits endowments would do better than forecast. They did!

I monitored all this on a spreadsheet I set up to stay on top of progress. Again this really helped.

End result is that the mortgage will be paid off later this year in full.

At the end of term for the mortgage C & G did indicate that they would extend term by about a year if required. I also believe I could of remortgaged for balance as I am 50 so a viable customer still!

Be interesting to understand your details - age, which mortgage company, what endowments, why you think the is a shortfall.

That`s great news well done!

I will be 57 when my endowment ends and if Santander could hold on for another 12 months for my gratuity to mature that would be great for me as well. The projections i have regarding the shortfall look pretty horrible but i`m optimistic that the come back into vogue again sometime in the next 9 years and will once again become the investors star of the investment show( like gold did during the financial crisis did nothing for decades then boom!).

My big worry is that one of my funds contained within the endowment policy is closed to new business and could this be left out in the cold if other stock market investments were to flourish?

SL

Sirlaughalot

TrickyDicky101 wrote: »

..but is perfectly acceptable as a ball park figure

Thanks for your help it gives me a good reference point and i assume if i pay a little more or as much as i can say 10% it will only help the shortfall situation.

SL

Thrugelmir

Sirlaughalot wrote: »

My big worry is that one of my funds contained within the endowment policy is closed to new business and could this be left out in the cold if other stock investments were to flourish?

SL

FCA is going to tackle issue of closed funds. So don't be hasty. There may be an upturn in the future returns.

michaels

If your current rate is base plus 1% and you can do better elsewhere (which you can) then it makes more sense to build up a cash fund elsewhere, preferably in an ISA than pay off the mortgage at the moment. You can always reverse that stance if the mortgage ratee exceeds what you can get net on your savings at a future date.

Sirlaughalot

Thrugelmir wrote: »

FCA is going to tackle issue of closed funds. So don't be hasty. There may be an upturn in the future returns.

Was that the FCA inquiry that was announced last week?

Potentially that could be very good news indeed. For other MSE members in a similar position to myself would surrendering your endowment policy make you exempt from any possible outcome?

Could this inquiry have major consequences for members who were originally 'Time Barred' on there original endowment miss selling claims to the Financial Ombudsman Service?

Many thanks

SL