Since the 1980s and 1990s, many thousands of endowment policies have failed to mature as expected leaving thousands of policies with an endowment mortgage shortfall and homeowners struggling to make their final mortgage repayments.
If policy holders do not have savings or some other means to cover the mortgage repayment shortfall, it may be possible to extend the term of their mortgage if they still have a regular income.
However, if they cannot raise money to cover the shortfall or extend their mortgage term, they may have to sell their property to release the equity tied into it.
Downsizing To Repay an Endowment Mortgage Shortfall
A significant difference between the amount the property has increased in value and the money needed to make up the shortfall may provide enough funds to buy a smaller property outright and repay the endowment shortfall.
To ensure downsizing a home is as stress free as possible it makes sense to start looking for a new property sufficiently in advance of the final mortgage repayment date to avoid the added pressures of a looming deadline and debt recovery negotiations.
Mortgage lenders and the endowment policy providers will be able to inform policy holders what is the earliest date that they can repay a mortgage or cash in an endowment policy without incurring penalties or losing bonuses.
National Residential can advise you what your house is likely to achieve in the open market free of charge. Although prices can go up or down in the subsequent months, it will provide you with an approximate budget for you to look for a new house and time to prepare your current home for resale.
Selling a House on a Schedule
As soon as you find your perfect new home, we can sell your old house in 28 days (or less or more if it suits your schedule) for 100% of the market value OR you may prefer to accept a fixed offer if you need the sale to complete as fast as possible and want to use our cash transfer fund to bridge any shortfall after you repay your mortgage while you wait for your endowment policy to mature.
Our ’28 Day FixedPrice+’ option was developed specifically to meet the growing demand for this type of problem and the lack of help offered by financial institutions especially to people approaching retirement age. It is an ideal solution for people who need a short term bridging loan while they wait for funds to become available.
The most important advice we can give is do not do nothing!
The situation will only get worse if left untreated….