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Original poster

is there an ifa out there? mortgage/endowment help needed

17 replies

financiallyconfused · 19/02/2006 19:18

I am a regular but have changed my name as my rl friends know my chat name and I don't want them knowing my financial details
I have 3 endowments which are up in 10 years and are predicting a total shortfall of £22000 on a £78000 mortgage. Am about to sell all 3 pay off 23k leaving a repayment mortgage of £55000 which I will have to pay off over 15 years. Is this a good idea?

OP posts:
Surfermum · 19/02/2006 19:37

I'm not a financial adviser but I think the advice is not to cash them in early. Have you applied for compensation for the shortfall?

LadySherlockofLGJ · 19/02/2006 19:44

Do not cash them in, the projected shortfalls are based only on current market performance surely ??So if the market goes up they will

We have kept ours and will worry about it when the time comes, do not forget you will have equity and will be able to sell your house if needs be.

Will you be inheriting any wealth at any stage ?

BTW our mortgage is for a lot more than yours, I say this not to boast, but to point out that sometimes in this nanny state you need to keep your nerve.

jenkel · 19/02/2006 19:48

We have 2 endowments which both have a shortfall which seems to be getting bigger and bigger. We are selling the one with the least extra benefits. Look to see what extra benefits you get (if any) with the endowment policies.

Original poster
financiallyconfused · 19/02/2006 19:57

jenkel what extras?

OP posts:
LIZS · 19/02/2006 20:10

We're in similar position to LadySherlockofLGJ. Jenkel, do you mean the life cover on the loan ? If you cash the policy in you'd probably still want to have some insurance on the mortgage the premiums for which would cost you more now than it would have done 15 (assuming you had a 25 yr term) years ago. You also won't necessarily get back from cashing in as much as you have contributed thus far. Basically you need to do the sums very carefully to see if it is prudent.

fsmail · 19/02/2006 20:17

If it is a with profits endowment it may be worth looking at selling it and going to a repayment mortgage. Depends how long it has been going. With Profits will struggle to recover for years yet. If it is unit-linked it will probably be doing well currently as shares are doing well and therefore it is worth keeping going as you will also have cheap life cover in there. If you are concerned that you will still have a short fall but some of your mortgage on to a repayment basis if the lender will let you do this.

fsmail · 19/02/2006 20:18

You may also have critical illness under the policy which could be difficult to replace now if you have had any medical problems so tread carefully.

JanH · 19/02/2006 20:37

Depends entirely on how much the £55K repayment will be per month vs the current interest only payments on £78K + endowment premiums, I would have thought. Have you got figures?

JanH · 19/02/2006 20:39

(I think the security of knowing the thing will definitely be paid off is worth a bit extra pm now.)

LIZS · 19/02/2006 20:52

Alternative might be to remortgage to something like a flexible mortgage package, so you can make over payments as and when you have any available funds, and offset this against the loan capital, keeping the endowment policies going.

mcmum · 19/02/2006 21:22

Financially confused,

hi my dh is ifa and i have asked him he suggests first go through complaint and try for compensation this has to be through original firm who sold you the policy, see how you get on there and he thinks your idea is good ie any money you get from surrender/sale/compensation should be paid off mortgage then remortgage. if you need to ask anything just shout as he is hovering

Original poster
financiallyconfused · 20/02/2006 11:03

mcmum - I haven't gone for misselling as I didn't get advice as such. At the time of my first endowment I worked (not on the life assurance side) for the insurance company and they gave you a mortgage allowance but only if you had their endowment which I did.
Does anyone know if the projected growth the life assurance companies give included the terminal bonus?
LGJ - no we're not expecting a financial windfall (although obviously I am expecting to win the lottery any week now ).

OP posts:
mcmum · 20/02/2006 11:07

dont know answer but will ask dh who is as work at moment but will be home soon if you keep check on thread

mcmum · 20/02/2006 11:10

apparently it depends on life co and is purely at their descretion the old with profits policies as yours are dead in the water !

fsmail · 20/02/2006 13:49

If you want to know more about endowments there is a link here you could try on /link {http://www.unbiased.co.uk/website/brochures/viewfact.asp?id=3} This is a factsheet available from IFA promotions. It will also provide you with a link to an IFA in your area. You may be able to remortgage and get the costs down to save you further money and then you could pay additional repayments in.

fsmail · 20/02/2006 13:49

If you want to know more about endowments there is a link here you could try on /link {http://www.unbiased.co.uk/website/brochures/viewfact.asp?id=3} This is a factsheet available from IFA promotions. It will also provide you with a link to an IFA in your area. You may be able to remortgage and get the costs down to save you further money and then you could pay additional repayments in.

Original poster
financiallyconfused · 20/02/2006 14:26

thanks for all the responses everyone

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