Endownment Questions

Dreamchaser

Hiya :beer: , apologies, seem to be posting all over the place tonight!!!

My husband and his then wife wanted to buy their ex council house, for £16,500 in 1996, they sought out advice and were put in touch with an agent who advised them that the only mortgage they would be able to get would be an endownment, with life cover, due to their joint low incomes. They asked about repayment mortgages, but, again, were informed that they wouldn't be able to get one, for the above reasons. Being naive in the ways of mortgages, and also very young, they promptly signed on the dotted line.

Hubby has since married me, we've taken out a remortgage, for £22,500, with a different lender, and switched to a repayment mortgage - we now have 11 years to go before we're mortgage free, we've kept the endownment going .

Have just studied our bank statement, we're paying our current lender, Newcastle Building Society, 95.12 and 154.61 monthly, the endownment is a separate payment, to Norwich Union, for £29.22 - when we initially remortgaged the repayments were split in two because we were paying half repayment and half endownment. We switched to full repayment on 12.10.06 - yet the repayments have remained much the same, split in two, rising with inflation. Is this correct - we surely can't be paying 95.12 for our lender to keep hold of our endownment as well as paying for the actual endownment??? I will be contacting current lender first thing Monday morning, just hoping, desperately, for some advice on where I stand.


Would we be able to claim the endownment policy was mis sold? Even though the agent is no longer in business? What about time limits? And also, sorry, are we doing the right thing keeping the endownment going - considering that we'd have to take out a life insurance policy for my husband if we cashed it in?

Apologies for asking so much, but any advice, on any or all matters would be greatly appreciated.

Many thanks

dunstonh

We switched to full repayment on 12.10.06 - yet the repayments have remained much the same, split in two, rising with inflation.

Mortgage payments are not affected by inflation and the repayments should have gone up. Possibly as much as 50%.

Would we be able to claim the endownment policy was mis sold? Even though the agent is no longer in business? What about time limits?

Was is mis-sold? You could be time barred as it is 3 years from notificiation of high risk of hitting shortfall. Most of those were issued from 2001-2003. If the adviser is no longer in business, then you are looking at referring it ot the FSCS where it will spend the next 18 months to 2 years being reviewed.

are we doing the right thing keeping the endownment going - considering that we'd have to take out a life insurance policy for my husband if we cashed it in?

NU endowments are generally quite good. Most are on track for target or not far off (projections with NU understate the likely values). Plus your policy is cheap and as you say, it would need replacing with a standalone life policy.