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Original poster

Horrible discovery about mortgage

49 replies

Home77 · 14/04/2019 17:31

We are due to pay off mortgage in 18 months...wondered why DH was not thrilled by this and have not found out. It is an endowment policy taken out in 1990s.

I have no idea if this is now going to pay out. Checked the letter and it says Green letter on track, but weirdly this is written in red! - It says the amounts and says due to be at present 68K with 71K being the plan full amount. So it seems nearly up to the amount needed.

But who knows? So worried now. Sorry have some MH (depression and anxiety) and this is really worrying me know. DH says he put the amount up when asked or something, and it used to be Northern Rock but was bought by this company called Reassure. It says they write yearly so next letter in August.

OP posts:
Singlenotsingle · 14/04/2019 17:32

Ring them and ask tomorrow.

Original poster
Home77 · 14/04/2019 17:34

I'm not sure if they'll speak to me as DH name on mortgage. But we are married. It says something vague about not knowing till the final month or something!

OP posts:
Grumpasaurous · 14/04/2019 17:36

If in doubt ring a financial adviser.

Ask the provider for a mortgage redemption statement.

JaneEyre07 · 14/04/2019 17:37

How have you just only found this out?

PlainSpeakingStraightTalking · 14/04/2019 17:38

If its always been paid, there will be a 'final bonus' due which very well may bump it right up. You will always get back what you paid in to an endowment - its the 'bonus' or interest in laymans terms that cant be guaranteed.
Eg 100pcm x 12 = 1200 pa x 25 years = £30,000 guaranteed payout. You would reasonably expect that to be at least doubled, if not tripled though. We paid £100 pcm for about 8 years(10k) , then froze it, we're getting 23K back assured.

Original poster
Home77 · 14/04/2019 17:39

We've never really discussed it before, now we have as due in the next couple of years. DH took out the mortgage before he met me, so was not a joint decision you see.

OP posts:
Ikeameatballs · 14/04/2019 17:39

You need to ring and clarify but it seems like it’s nearly the amount to clear the balance. 3k could be put on a 0% credit card and then paid off.

Redcrayons · 14/04/2019 17:44

Your not too far away. Can you start a savings plan to cover what the potential shortfall may be?

Obviously get some proper financial advise.

PlainSpeakingStraightTalking · 14/04/2019 17:47

I'm not sure if they'll speak to me as DH name on mortgage

They wont speak to you.

Read the paperwork properly that your DH has received.

Allergictoironing · 14/04/2019 17:52

Endowment policies involve investment in the stock market, so exact final amounts can't be given until maturity due to movements in the market. Definitely worth checking with the company just how close to it paying the full amount off your policy is.

Reassure is a biiig company who bought out a number of other companies, or parts of the business of other companies such as Guardian and Legal & General, so not a fly by night you'll be pleased to hear.

idril · 14/04/2019 17:57

How old are you? If you still have income and are likely to only have a small amount of debt left, can't you just take out another small mortgage?

78percentLindt · 14/04/2019 17:57

If you are worried, the safest thing to do might be to overpay the mortgage interest component of the mortgage and this will start to reduce the outstanding sum- although with only 18months to go this will not be a huge sum. We didn;t have an endoment but when they were trying to sell us one, they said we could do this and SIL paid her endowment mortgage off but kept the endowment policy going until it matured.
DH needs to talk to them.

viques · 14/04/2019 17:58

I had an endowment mortgage, they used to send me updates about it every year so your oh will know exactly what the situation is re how much the payout will be and any shortfall anticipated Ask him to show you the letters.

MaybeitsMaybelline · 14/04/2019 18:06

I was going to say where has your dh been hiding for the last ten years, does he not read anything? This has been news for about a decade or probably more that endowments may not pay off the outstanding balance. Fortunately you should have most covered and if not, you would possibly have to get a repayment mortgage or loan for the balance.

Senac32 · 14/04/2019 18:07

Another idea would be to apply for a different mortgage with different paying-off rules. Do your research - as far as I know it's possible, but lots of form filling etc. Most can be done online.
We had to do that about 15 years ago.

Senac32 · 14/04/2019 18:09

ps similar to the idea from MaybeitsMaybelline above.

TalkinPaece · 14/04/2019 18:22

You have a problem.
You and your DH need to talk to the lender ASAP
as they will want the whole of that shortfall on the last day of the mortgage.
Why has he been sticking his head in the sand for the last ten years
and Northern Rock as well.

Original poster
Home77 · 14/04/2019 18:24

"You need to ring and clarify but it seems like it’s nearly the amount to clear the balance. 3k could be put on a 0% credit card and then paid off."

Yes well we still have 18 more payments to go too, to add to that amount as well. @ £170 so another £3060 to add...

I have read the paperwork, and it is a little vague. This is probably why-

"Endowment policies involve investment in the stock market, so exact final amounts can't be given until maturity due to movements in the market."

It is a little confusing why they have written in red- Green -on track. But confusing. Also as I mentioned I have MH so maybe he has not wanted to bother me with this during the years this has been going on and felt it was sorted with the extra payments.

He has been paying on the interest part as well...as well as upping the payments when Reassure advised to keep it 'on track'

OP posts:
TalkinPaece · 14/04/2019 18:28

In an endowment mortgage you have two payments

  • one is the interest that goes to the bank (Northern Rock etc)
  • the other is the capital that is invested in the endowment to settle on the last day.

HOPEFULLY your DH has been overpaying the interest to reduce the capital due down to the level that the endowment will return
( which is what I did )
talk to him about it to reassure yourself

Ffsnosexallowed · 14/04/2019 18:29

Assuming the letter you have read is six months old you'd still have 2 years of payments to make up the 3k shortfall. If get dp to call them to confirm the current and protected value of the endowment and if there is a shortfall call your mortgage provider to advise them and ask their advice. You might just need to take out a v small short term mortgage to pay off remainder. It doesn't sound like you'll have a big shortfall, do you have access to a couple of thousand?

viques · 14/04/2019 18:36

On a brighter note OP, you are in a better position that the people who have been merrily "repaying" zero interest mortgages thinking they are ahead of the game..............

Missingstreetlife · 14/04/2019 18:37

Some of these were mis sold (like ppi) there may be compensation.
Some people were really stung but doesn't sound like yours is too bad. It will be in red because you still owe the whole sum until the endowment pays out. They can extend the mortgage on interest only and you overpay to cover the shortfall. Don't panic, it will be salvageable.

DadDadDad · 14/04/2019 18:39

Contact the provider of the endowment (the life company, which may or may not be the same as the provider of the mortgage) and ask them for a current surrender value, and a projection of the maturity value. These will show you what it's worth today, and also (based on a number of possible investment scenarios) what it will be worth at maturity.

You can then decide how much extra you are likely to need to set aside ahead of maturity, or even if it is better to surrender now, so you stop paying premiums and can save them instead (however, this will mean you no longer have the life insurance that comes with an endowment).

viques · 14/04/2019 18:40

Sorry I meant interest only.....

PlainSpeakingStraightTalking · 14/04/2019 18:43

He has been paying on the interest part as well...as well as upping the payments when Reassure advised to keep it 'on track'

If you have a mortgage that is interest only , then you have to be able to pay off the capitol at some point eg and endowment policy, at the end of the mortgage term.

You'd be pretty buggered if he wasn't paying the interest.

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