Endowment advice please
Discussion
Hi,
Bit of an epic this one!
My husband and I bought a house back in 1999 with an interest only mortgage and an endowment policy.
We moved last year and took out a repayment mortgage which included the remaining mortgage from the first house (same mortgage provider).
So, we still have the endowment but we don't need it to pay off the mortgage.
We are thinking that we'd like to use the money to pay for our children's university education or maybe a deposit for their first flat.
However, as it was originally intended to pay off a mortgage, are we legally obliged to use it for that purpose?
We have also recently received some slightly bewildering paperwork from the endowment policy providers saying that there might be a shortfall.
They want us and our lender to sign it to say we are happy with this and have received (or agreed to waive) financial advice.
As the endowment is no longer related to the original mortgage, we don't know whether it's any of their business.
We certainly don't want the aggro of getting our lender to sign paperwork for the benefit of the endowment provider! It very much feels like they are trying to cover their backs if the policy doesn't perform very well.
We have looked into getting financial advice and coming back with figures of £200 an hour when all we really want to know is:
Can we use the money for other stuff?
and
Do we need to involve our lender in the shortfall mess even though we now have a repayment mortgage?
If need be, of course we will seek professional advice but we don't even know if we need it!
Any advice would be gratefully received.
Bit of an epic this one!
My husband and I bought a house back in 1999 with an interest only mortgage and an endowment policy.
We moved last year and took out a repayment mortgage which included the remaining mortgage from the first house (same mortgage provider).
So, we still have the endowment but we don't need it to pay off the mortgage.
We are thinking that we'd like to use the money to pay for our children's university education or maybe a deposit for their first flat.
However, as it was originally intended to pay off a mortgage, are we legally obliged to use it for that purpose?
We have also recently received some slightly bewildering paperwork from the endowment policy providers saying that there might be a shortfall.
They want us and our lender to sign it to say we are happy with this and have received (or agreed to waive) financial advice.
As the endowment is no longer related to the original mortgage, we don't know whether it's any of their business.
We certainly don't want the aggro of getting our lender to sign paperwork for the benefit of the endowment provider! It very much feels like they are trying to cover their backs if the policy doesn't perform very well.
We have looked into getting financial advice and coming back with figures of £200 an hour when all we really want to know is:
Can we use the money for other stuff?
and
Do we need to involve our lender in the shortfall mess even though we now have a repayment mortgage?
If need be, of course we will seek professional advice but we don't even know if we need it!
Any advice would be gratefully received.
You're right, we both have life insurance on that policy! We'd forgotten about that. Something that we will have to address when it matures...
Yes, we are still paying into it and it has 6 years to run - conveniently maturing when our eldest turns 18.
Maybe we could put some of into ISAs at that point.
The current plan is to keep paying it. The shortfall apparently is about 5k which we can live with.
I think we did get a "red" letter in the past, Ginge, but I don't think we would go down the complaints route anyway.
We have sorted the mortgage out so that's the main thing
Thank you so much, guys!
Yes, we are still paying into it and it has 6 years to run - conveniently maturing when our eldest turns 18.
Maybe we could put some of into ISAs at that point.
The current plan is to keep paying it. The shortfall apparently is about 5k which we can live with.
I think we did get a "red" letter in the past, Ginge, but I don't think we would go down the complaints route anyway.
We have sorted the mortgage out so that's the main thing
Thank you so much, guys!
Hi,
Yes, we took out plenty of additional life insurance - our jobs have comprehensive benefits packages which allowed us to top up our life insurance to cover the extra at very little cost
We absolutely understand that it's probably not a great savings plan and paying off the mortgage faster would probably leave us better off financially on paper but our problem is that we think we are going to need capital in 6 years time rather than more income or a shorter mortgage term.
We have two children, 12 and 9 - but only two school years apart. That's a lot of up-front wretched tuition fees
We will certainly ask what the paid up value is!
Cheers xx
Yes, we took out plenty of additional life insurance - our jobs have comprehensive benefits packages which allowed us to top up our life insurance to cover the extra at very little cost
We absolutely understand that it's probably not a great savings plan and paying off the mortgage faster would probably leave us better off financially on paper but our problem is that we think we are going to need capital in 6 years time rather than more income or a shorter mortgage term.
We have two children, 12 and 9 - but only two school years apart. That's a lot of up-front wretched tuition fees
We will certainly ask what the paid up value is!
Cheers xx
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