another credit card or loan which one!

Robflh

Hi glitzy

Ring the solicitor and find out if it is too late.

If you claimed compensation why do you still have an endowment mortgage. As I understand it, you surrender your endowment on the mortgage and add to that the compensation money.

You pay the endowment & compensation money off the mortgage and then take out a new repayment mortgage, which will pay off the remainder of the interest only mortgage.

Example: endowment of £45 per month to cover a mortgage of £27,000.

Compensation is £1,500 and the surrender value of the endowment is £6,000. That makes a total of £7,500 to pay off the interest only mortgage. Therefore the new repayment mortgage is £19,500.

The old mortgage had 15 years left and that is how many years the new mortgage would be for. The new mortgage finishes when the old one would have done but now there is no short fall.

That is what should have happened with mine but I have never done what everyone else does so I kept the £7,500.

The new repayment mortgage is for £27,000 over twenty years instead of the 15 years and I pay less now then I did for the old mortgage and the endowment.

It also meant I had £7,500 that I could put towards renovating the house and that I could use to pay off one credit card and then transfer balances from one card to another so that I would have low life of the balance APR's for all the balances on my credit cards.

The only one I could not do a BT for was my American Express card. That was why it was the last one to have a balance transfered from it and why it was my main card for purchases that I needed to make for the house.

Consequently, when the limit was reduced by £3,000 I lost almost half of the money I had for work on the house.

I am back on track now but for a good few months it was touch and go as to whether or not I would run out of money.

glitzy

Hi Robflh

i use am ex all the time but i do pay off the balance every month is that why they have not halved my credit limit? or is it to do with loyalty, have been with them for about 20 years, credit limit £11,000!!! i dont know why!!!

phoned the solicitor, ever so helpful, then phoned hsbc, again ever so helpful - i read it wrong they match existing mortgage if higher then 4.54%, but mine 4.39% at the mo - shame.

with regards to endowment, when i claimed they worked out the difference if i had taken out a repayment, over the amount of years and that was the total i was paid, nothing about having to surrender, just to make me aware that i could not claim anymore in the future if there is a shortfall!!!! might see if i can sell it, anyway enough about me are you going to sell your house once you finish renovating? trfn x

Robflh

Hi glitzy

I think someone did not inform you of everything or assumed that you already knew it or you could be very close the mature date for the endowment.

A repayment mortgage for £25 years, would mean paying a bit off every month and an endowment mortgage meant paying the interest each month and then paying off the mortgage with the endowment when it matured.

In either case to mortgage would be dead at the end of the 25-year period.

Mortgage lenders got this wrong. When the endowment matures there will not be enough money to cover the mortgage. That is the reason why you asked for compensation.

If you had taken out a repayment mortgage instead of an endowment type, by the time you claimed your compensation you would have paid off a certain amount.

In my case, that was £7,500. Surrendering my endowment would get me £6,000 therefore my compensation was £1,500.

A new repayment mortgage plus the money for the endowment plus the compensation money, would pay off the old mortgage.

The new mortgage would finish at the same time as the old one would have but there would now be no shortfall. It is kind of like going back in time and taking out a repayment mortgage instead of the endowment one.

The projected shortfall that I would have had was well over £10,000 but my compensation was only £7,500. If you continue with the endowment, you could still have a shortfall when the endowment matures, even if you had paid the compensation money of the mortgage. I am assuming that you used it to pay a lump some off the mortgage.

Anyhow, I think you need to speak to an independent financial advisor as soon as possible to find out what your options are or ask HSBC.

Then if need be and if it is not too late, put a hold on the remortgage. You might need to change the endowment mortgage to a repayment one. If that is the case, you might as well do one new repayment mortgage for £116,000 minus the money you get for surrendering the endowment. You could also add the A&L loan to the remortgage, which could free up £155.

Depending on how mad you would like to be and as long as you can afford the repayments, you could increase the mortgage by adding some or all of your current debts to the new mortgage. That would free up money that you can use to sort out the house and then when the housing market settles down again, you could sell the house and buy another one that needs work doing to it.

That is what I am going to do with mine. The difference in price for my renovated house and the run down property I buy should leave me with enough money to clear all my debts. Most of which have built up over the last few years because I have been out of work. The spanner in the works at the moment is this credit crunch. It is making the housing market wobble and if it wobbles too much it could collapse.

Send me a private message with an email address and I will email you a few photos of the house.

Robflh

Hi glitzy

I am just checking to see if everything is OK.