My mortgage company has told me that I should get an endowment policy to cover £40,000 MORTGAGE which reaches

Question

maturity in 10 years time. I had some financial problems a few years ago and the bank have told me to avoid repossession on my capital and interest mortgage I have to get an endowment policy to cover £40,000 over 10 years or pay nearly £700 a month as a repayment. I have looked at some insurance companies and they do not do endowment policies anymore, just a type of death benefit. Does anyone know of companies that do an endowment policy where a lump sum is paid when the mortgage reaches maturity. Please some help urgent please. Thanjks

Answer 1

This is a problem, you no doubt recall the endowment scandal a few years back, negative equity and all that bull?

                                     OK no need to go into all that, it is history.

                                     Now I am no financial whizz kid, and even if I was I wouldn't have enough info in your question to be able to offer any advise.

                                       You say you are repaying a capital and interest mortgage? Is this with the bank??

                                          I am guessing your are in arrears with your repayments? That is why the bank have called you in?

                                          I agree with some of your answers, the one I agree with most is that you seek independent advise, from citizens advise bureau, this would be free and impartial.

                                              The bank gets commision on flogging policies of any discription, they are all robbing bas*tards!!

                                                 Now this money you borrowed, lets say it was 40k, over whatever amount of years, that has nothing at all to do with the value of your house, the house has been used as colateral , to g'tee the robbing bas*ards can get their money back, they could take the house to ensure that, or they will sell it asap, even for half it's value and you would still have to repay monies outstanding.

                                                   Dont hang about go see citizens advise, tomorrow, they will want to know how much you are in arrears and all other details, so have it all ready when you go.

                                                   Folk on this forum (including myself) try to be helpful, but this is not really the place for your particular problem solving.

                                                   Good luck , I really hate these robbing bas*ards.

Answer 2

You have received very bad advice. In fact I can hardly believe that a bank have given this advice.

Suggest you go to the Citizens Advice Bureau as soon as possible.

Answer 3

Bank can not force you to get an endowment policy. What they can do it to add the extra bits that you owe them on to the mortgage as an interest only, so you make payments on an interest only basis on that bit.

If you look at the property cycle, you will find that in 10 years time, you house/flat will be worth more than today. You can start to take out ISAs every year to get tax advantage to cover any shortfall.

If the lender is not going to agree to that, then there are many other ways to resolves this. visit :-  http://mortgagebrokers4london.co.uk

and ask for free advice.

Answer 4

Endownment mortgages should not be touched with a 10ft barge pole.

Get a repayment mortgage so there will not be any shortfall at them end of the term.