Endownment mortgage due to end shortly but what happens next?

Jo4

Our mortgage is up in 2011 but the lender brought it forward to September 2008 because that is when the endownment policy matures. At the moment we pay some of the mortgage and the all of the endownment policy while the DHSS pays a bigger part of the mortgage. We think we may be up to £3,000 short so what will happen?

dmg24

You will need to pay off as much of the mortgage as the endowment will cover, and hope that your lender will allow you to keep the mortgage for the remaining amount. As it is such a small amount, and as your mortgage is due to end at the time when your endowment matures, you may have a problem with this. However the only way that you will get a definitive answer to this is to ask your lender.

If you are allowed to keep your mortgage, the DWP will continue to pay the interest on the remaining £3K. If you are not, then you will need to find another way to pay the £3K to your lender immediately.

Jo4

dmg24 wrote: »

You will need to pay off as much of the mortgage as the endowment will cover, and hope that your lender will allow you to keep the mortgage for the remaining amount. As it is such a small amount, and as your mortgage is due to end at the time when your endowment matures, you may have a problem with this. However the only way that you will get a definitive answer to this is to ask your lender.

If you are allowed to keep your mortgage, the DWP will continue to pay the interest on the remaining £3K. If you are not, then you will need to find another way to pay the £3K to your lender immediately.

Thanks for responding. If they are paying only the interest, will the mortgage ever be paid of or how can we pay it of when we are in receipt of benefits?

dmg24

Jo4 wrote: »

Thanks for responding. If they are paying only the interest, will the mortgage ever be paid of or how can we pay it of when we are in receipt of benefits?

You will need to find a way to fund the £3000. You will not get any state assistance towards this amount.

Jo4

dmg24 wrote: »

You will need to find a way to fund the £3000. You will not get any state assistance towards this amount.

If we got a loan to pay the £3,000 would we get any assistance?

dmg24

Jo4 wrote: »

If we got a loan to pay the £3,000 would we get any assistance?

No, ISMI is for exactly that, mortgage interest.

Could you not get a loan and use the money that you are currently paying towards your endowment to cover the repayments?

Jo4

dmg24 wrote: »

No, ISMI is for exactly that, mortgage interest.

Could you not get a loan and use the money that you are currently paying towards your endowment to cover the repayments?

I wonder could I do that from September because I couldn't afford it now.

donnalove

Jo4 wrote: »

I wonder could I do that from September because I couldn't afford it now.

rather than take out a loan could you negotiate with the mortgage company to pay them the amount that would be paying u endownment? as the interest will be covered you would only have to pay off the 3000.
it seems daft to take out more credit(which would be hard for you to get) and have more interest.
yes you could do it from september but you would need to start making the arrangements or asking now.

Oldernotwiser

But if the OP is on long term benefits can't s/he carry on with the interest being paid for her indefinitely (assuming the building society agrees). Does it really need to ever be paid off? (My parents had an interest only morgage in retirement and the capital was repaid when they died, so I know it's possible.)

colin13

Oldernotwiser wrote: »

But if the OP is on long term benefits can't s/he carry on with the interest being paid for her indefinitely (assuming the building society agrees). Does it really need to ever be paid off? (My parents had an interest only morgage in retirement and the capital was repaid when they died, so I know it's possible.)

my father had same sort of morgage, but I think tht is only if u get a morgage in ur later years in life but it deffo does sound good as 1 day i might bb in same situation

dmg24

Oldernotwiser wrote: »

But if the OP is on long term benefits can't s/he carry on with the interest being paid for her indefinitely (assuming the building society agrees). Does it really need to ever be paid off? (My parents had an interest only morgage in retirement and the capital was repaid when they died, so I know it's possible.)

This is at the discretion of the lender. The mortgage is due to end this year, and only the lender can decide whether it may be extended. Not all lenders would be happy to extend the term when there is only £3000 to be paid, especially when the customer is on benefits.

The OP really needs to speak to the lender.