Horrible discovery about mortgage

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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.

Sending hugs. You are not alone. There are lots of people in your position as the endowment boom of the 1990s starts hitting.

One small piece of what I hope is reassurance. If the endowment does not pay enough at the end of the term to pay off the outstanding balance, then you will not be in the streets the day after the amount is due. Rational, mainstream banks will work with you to find a way to sort things out. There will be options ready to offer you. This isn't taking the banks by surprise, and they will find ways to work with it.

If he is making extra payments on the interest, that will really help. It looks like he has it in hand, just keep an eye on things, stay sensible and try to avoid stress. Take care of yourself.

Agree with others, don't panic! Get dh to ask for the current surrender value on the policy, you could be pleasantly surprised. If it is more than your mortgage then you can make the decision to pay it off now or carry on for a bigger payout in 18 months (taking into account 18 more interest payments and/or early mortgage repayment penalties).

..... or exactly what dadadad just said

It sounds as if your DH has been keeping on top of things as much as he can, given the element of uncertainty inherent in an endowment mortgage.

www.moneyadviceservice.org.uk/en/articles/dealing-with-an-endowment-shortfall
Some advice here.

You have 18 months so there is a good deal of hope. Maybe your DH should call Reassure every month for an accounting.

My parents had an an endowment mortgage. They kept paying it and also started a repay mortgage with about 7 years to go as they were really worried about it too.

At the end of the term they had paid the mortgage off and had whatever was left from the endowment for themselves, you don't have that kind of time though. The mortgage they had was tiny about £20K and it only paid out about £15K including the bonus etc. So they had about 25% gap.

If it's a big gap at the end can you take out a short term mortgage for say 5 years to cover the shortfall. Has ur husband claimed for mis selling, these mortgages were all pretty much mis sold at that time so would be due compensation.

For those mentioning compensation, claims for endowment mid selling are now time barred. Hopefully, if the OP's partner was missold, he claimed when he was notified of the shortfall.

Did DH add your name to the deeds of the house when you married, or is he still the sole owner? I'd be worried if he did not.

www.which.co.uk/consumer-rights/advice/is-there-a-deadline-for-making-a-mis-sold-endowment-complaint

Not necessarily so wrt compensation, NoBaggyPants

Mis-sold endowment time limits

"There are strict time limits for complaining about mis-sold endowments. You have either:"

• "six years from the date your policy was sold, or - if it gives you more time -"
• "three years from the date you became aware (or should reasonably have become aware) that you had grounds for complaint"

"If your endowment was sold to you before 29 April 1988 you may not be able to claim – dependant on who sold you your policy."

Sounds like he's on top of it to me

There's really nothing to panic about, OP, this is just how endowment mortgages work. You can phone tomorrow (or he can) but they still won't be able to tell you precisely what your endowment will be worth in 18 months time. There may be a small shortfall, or there may even be a bit extra. When the policy matures, you'll then be in a position to decide what, if anything, you need to do next. At worst, it sounds like you'll have another year or two of payments on a loan.

@MsChookandtheelvesofFahFah

Don't worry - I'd didn't read everything in the thread that closely either: I've only just realised that I work for the insurance company in question!

It sounds as if the endowment policy might be a bit short, but most mortgage companies will allow you to take out another repayment mortgage to pay off any shortfall. In your case that might only be another six months or so.

It doesn't sound like you need to worry. It's a lovely feeling when you've paid off your mortgage and you own your own house outright!

In the past some endowments were a very good deal - you paido ff the mortgaeg and got a large lump sum if the stock market etc had done well and life insurance. Then due to low interest rates/investment rates is switched around so some have not done as well as expected and will not pay off the mortgage. However lenders have warned people reguarly so your husband probably has paperwork from the last 5 years regularly letting him know if there will be a shortfall and asking how he will meet it. Ask him to sohw you every letter he has had from them.

Also if he does not keep records and files make sure he starts now.

I had an endowment policy with a mortgage taken out in my name about 26 years ago. When I sold the house I carried on the payments as a savings plan which matured last year. There were letters galore about how poorly it was performing and it wouldn't reach even half the amount I'd taken it out for. In the end, with the maturity bonus it was only a couple of thousand less than it should have been - but of course they couldn't have forseen the bonus amount until the day it matured. It might not be as bad as you think

Really no need to be concerned OP. The mortgage companies always err on the conservative side these days when giving out predictions for endowments etc. Your HD will have been paying the interest only for the mortgage then the premium on the policy and if he has been doing as asked and increased the payments as the company has suggested should be fine. But in the unlikely event that you are £3k short I would look at putting an amount aside every month to pay that off at the end of the endowment term. Alternatively does the mortgage term finish when the endowment mature? if not then the mortgage would probably change into a repayment one for the remainder of the term so paying the £3k off over a number of years wouldn't be too arduous.

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I don't think you should worry about the color of the print. It is probably like that so that people read it, rather than dismissing the letter as unimportant. It says that he's on track and he's upped the payments when asked to. Those are both very strong indicators that this is all fine.

We had an endowment from the mid 90s for £50k, we were expecting a shortfall so paid some off the mortgage downto £40k, it paid out £58k . We also had red letters then green ones so hopefully yours will be good like ours.

Thanks for the replies. Looked again at the letter and it says we get an annual statement every August and it says at the bottom as pp mentioned that it is the lowest projection- so if the lowest rate the amount should be reached and that is what it is based on...and as mentioned he increased the payments to keep 'on track' and since then have been letters which keep saying it is on track. It's just a bit worrying as he is now self employed and not sure would be able to get another mortgage and things are strained financially due to my health too...(getting PIP / ESA though). But not much room for anything else.

I guess overall it is not a big mortgage and it should be OK if we had to put a bit on a 0% credit card, it's just gutting to think of it possibly being over and now this!

Thanks again.

I took out an interest only mortgage and endowment when I bought in 1992. Over the years I got letters similar to the one you’ve got which gave low, medium and high projections, with the low usually a few thousand short of the target. When it did mature, 2 years ago, it actually paid out £2,500 over the target. It sounds like yours is probably on track for a similar payout and any shortfall, if there is one, will be manageable.

If he’s put the amount up like he says it should be fine. We had one which we never put up and it paid about £17000 and the full amount should have been £25000. We didn’t need it to pay off the mortgage so it was fine. If we had we would have put up the payments. The letters we kept getting were very clear we needed to pay more if we wanted £25000 paid out.

Ok, yes he says he put it up whenever they asked to do so - it sounded like was more than once. Blessed things. At least it is not a huge amount overall thankfully. very stressful. think I catastrophise about these things as well which probably doesn't help.

Sounds like you will be fine and may even get a bit more than you need to pay off the mortgage.