endowments

[Connemmara]

Hi anybody - my endowments when they expire will not be enough to pay my mortgage next year. However since I live on my own I was just hoping to get a remortgage and continue paying for my house. My friend has just had been visiting there and more or less put a bit of wind up me in saying that with the current economy and credit crunch - would I get at 61 years old get a mortgage. If I dont get the mortgage what other options would I have.

I am going to make an appointment to see a mortgage advisor next week. Thanks for any replies. bye

[Hymie]

Answer - Part 1

Leaving aside any endowment miss-selling compensation that you might have been able to claim – basically you are correct in that you can take out another mortgage to cover any short-fall.

Once your endowment matures, you will know how much you still owe on the property. However, your current endowment company should be able to advise you of the likely shortfall, so that you can make necessary arrangements to pay off the amount. I am somewhat surprised that they have not already done so, and tried to sell you their own top-up mortgage.

Once you know the likely short-fall, you can start making plans to pay the amount that will still be owing.

Your problem will be that unless you can pay off the shortfall within the next 4 years, you will be paying the loan off during your retirement. Providing that you can show that you can make the repayments – you should be able to get a mortgage. You should have no difficulty in finding a mortgage company willing to let you pay until you are 70.

[Hymie]

Answer - Part 2

There is nothing to stop you taking out a second mortgage now, to cover the short-fall, but without knowing the likely short-fall; how much you need to pay and for how long, cannot be determined.

Check out this site to work out monthly payments required on a mortgage – you can enter/change the mortgage amount (loan), and length of mortgage, to see how these affect the monthly payments.

http://www.fsa.gov.uk/tables

If you don’t get another mortgage (or don’t want to), you could sell and downsize or relocate to a property which you could buy outright with the proceeds of your house sale.

My advice is to take advice from more than one mortgage advisor – there is nothing stopping you from applying directly to one of the providers, shown in the fsa tables.