Are we the only ones left with an endowment mortgage

errocharms

Hi several years ago we hit some financial hardship and ended up with an endowment mortgage which ends in 5 years. (Thankfully we have been debt free for several years now apart from the mortgage). The endowment policy from what I understand will only cover half of the sum total amount of the mortgage. Our first thought was to sell and use the equity that has built up over the years to buy elsewhere but it's been suggested we could re-mortgage and pay off the outstanding mortgage or use the money to buy another property. I am confused but know we need to do something now as we are not getting any younger and with our past credit rating would we even get a mortgage?

MovingForwards

How old are you?
How much is the outstanding mortgage?
What's your income?
Any loans, HP/PCP, credit cards etc?
Any CCJs, IVAs, defaults, late payments etc showing on your three credit reports (credit karma, Clearscore, MSE credit club)?

Have you spoke with a mortgage broker?
Have you run anything through a mortgage calculator (Halifax, nationwide etc) to see what you could potentially borrow?

Without knowing any further information, no-one can give you decent advice, but you have the option of:
-- selling and buying somewhere smaller, 
-- remortgage to a repayment mortgage, keeping the endowment money to do repairs, emergency fund or drop it into a pension
-- remortgage to a repayment mortgage and when the endowment matures pay a lump-sum off the mortgage
--make over payments now to start clearing the mortgage and hope the endowment fills the gap.

silvercar

If you can afford to do so, I would start setting money aside each month to bridge the gap. That way you have the flexibility to decide what to do in a few years time. Other options are to remortgage onto a part repayment, part IO using the endowment to clear the IO mortgage. There will be costs involved in doing that, so unless you really need to extend the term of the mortgage beyond 5 years I wouldn't be so keen on this option.
Endowments often have a final value bonus at the end of the term, so you may find it releases more than expected. You can always ask the provider for an estimate of the likely payout.

errocharms

MovingForwards said:

How old are you?
How much is the outstanding mortgage?
What's your income?
Any loans, HP/PCP, credit cards etc?
Any CCJs, IVAs, defaults, late payments etc showing on your three credit reports (credit karma, Clearscore, MSE credit club)?

Have you spoke with a mortgage broker?
Have you run anything through a mortgage calculator (Halifax, nationwide etc) to see what you could potentially borrow?

Without knowing any further information, no-one can give you decent advice, but you have the option of:
-- selling and buying somewhere smaller, 
-- remortgage to a repayment mortgage, keeping the endowment money to do repairs, emergency fund or drop it into a pension
-- remortgage to a repayment mortgage and when the endowment matures pay a lump-sum off the mortgage
--make over payments now to start clearing the mortgage and hope the endowment fills the gap.

errocharms

Thanks for the replies and are aware we need to arrange to meet with a financial adviser ASAP
We are in our late 50's
The outstanding mortgage is £200,000
Our joint income is roughly £40,000 
No loans or HP/PCP, credit cards etc and no CCJs or IVAs and all payments are up to date.

 

MovingForwards

errocharms said:

Thanks for the replies and are aware we need to arrange to meet with a financial adviser ASAP
We are in our late 50's
The outstanding mortgage is £200,000
Our joint income is roughly £40,000 
No loans or HP/PCP, credit cards etc and no CCJs or IVAs and all payments are up to date.

 

You need to speak with a mortgage broker, not financial advisor.

How late is late 50s?

How much is your endowment looking to pay out?

Have you got pensions? Or is it just state pension?

errocharms

Been away for a few days 
We are 58 and endowment will pay out around £100,000 and apart from state pension we have around the same amount again
retirement age is not for another 7yrs