Endowment Mortgage remortage

K

Kate121

Guest
My Husband currenlty has an endowment mortage, we have been advise that there will be a shortfall of Approx 30,000 when the term is up in 12years time. Because of this we want to change the mortage and also changethe house into both our names. But also we would like to purchase a holiday home.
So we were hoping to take out a tracker mortgage with a new lender on our current home but to include in this mortgage the cost of our new holiday home, if we do this our total mortgage would be 75% of the value of our current home.

Firstly Can we do this ???

Are we subjected to Stamp duty on the holiday home if it is new ???

Is this the most economical way to go about things ????
 
Hi, Many issues here, but will stick to the endowment bit. Assuming it's a with-profit type (annual bonuses plus 'large' terminal bonus) you have three options. (1) keep paying premiums and hope investment return greatly improves above present projection
(11) make it 'paid up', i.e. don't pay anymore premiums and let policy mature in 12 twelve years time
(111) Sell it back (surrender) to the assurer (issuing insurance company) or sell it hopefully (usually) for higher price to one of the 3 market-making firms who buy and sell these type of policies. Check 'key' posts string for these 3 firms, or last Thursday's Indo Business supplement on page 12.
If you need to release the cash tied up in the endowment for ur new plans, then (111) seems to be ur only recourse. Get a surrender quote from assurer, and phone the 3 firms for quotes. and compare.
To make a proper assesment of situation longterm, you need further info from assurer company.
Such as: if i keep up premiums, what is maturity value?
If I make policy paid up, what is projected maturity value? Obviously if the difference is less that the future premiums you have to pay, paid up option is better.
Endowments overpaid up to 2002; now companies are trying to rebuild surpluses, so policy payouts are suffering. eg 25-year Standard Life ( formerly industry leader) has cut maturing payout this year from over €100k before Feb 1 to under €76k last week for typical with profit policy of €xx (unsure) per month. Fattening up fund for dem ualistion and float plus payout to members next April, some cynics allege. Hope this helps on the endowment end of ur query
 
Hi

Thanks for your reply, unfortunenatly it is not a with-profits. We were really sold a very bad deal. Therefore it is of no intrest for anyone to buy. So I assume our only option is to sell..
 
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