Monday, November 26, 2012

Endowment Payment Release Forms

As many endowment policies, taken out in the 1980's, are maturing/due to mature in the coming year; I would be interested to hear from anyone who has received a payment release form that contains any onerous/unusual conditions that implies that the hapless policyholder would be bound by if he/she signs the form.

Monday, November 05, 2012

The Interest Only Timebomb

As many interest only mortgages (which were meant to be covered by endowment policies) mature in the next few years, many people are facing significant debts that they cannot afford to repay because of the dismal performance of these endowment products.

An analysis of Financial Services Authority (FSA) figures shows that of the 150,000 interest-only mortgages a year that are due to mature in the next eight years, 60,000 are likely to be in shortfall. Of these 42,000 will be in the names of people over the age of 60 either at or close to retirement.

When faced with a shortfall there are a number of options that may be available to the hapless debtor, including the following:

- sell the home, use the proceeds to pay off the shortfall and downsize, or
- negotiate an extended term for the shortfall portion of the mortgage with the lender, or
- look into the possibility of a lifetime mortgage/equity release scheme.

Richard Evans of the Telegraph has provided some helpful background on equity release schemes here.