Independent Financial Life Planners Bishop's Stortford: Do you have an endowment mortgage?

Monday, 16 November 2015

Do you have an endowment mortgage?

Enable’s IFA’s in Bishop’s Stortford have started to talk to more and more borrowers who took out an endowment mortgage towards the end of the last century that will soon be facing a shortfall at the end of their term. According to the Financial Conduct authority, the first sizeable wave of these cases is expected to appear in 2017-18, when endowments sold in the 1990s reach their peak period of maturity.

The problem is that endowment policies are failing to generate enough returns to clear the mortgage debt at the end of the term has been exacerbated by the failure of many homeowners to prepare for this very possibility. Citizens Advice has estimated that more than 930,000 borrowers on interest-only mortgages have no savings plan in place to repay their loans. Many of these borrowers will have of course built up their equity through house price growth – but moving to a full capital repayment mortgage is simply not affordable.

This is likely to be an area in which more mortgage lenders start to become involved as borrowers look to convert some or all of their mortgage balance from interest only to repayment in the next few years. Leeds building society have been leading the way and have seen uptake from re-mortgage borrowers who are keen to make inroads into their debt on a gradual basis since launching its part capital and part interest-only mortgage product. It is offering a way for borrowers to flexibly starting to pay down their loan in a more manageable way. Enable’s IFA’s may be able to help you find a solutions. Remember your home could be at risk if you do not keep up your mortgage or re-mortgage repayments.

Issued by: Enable Independent Financial Life Planners  25c North Street, Bishops Stortford, Herts CM23 2LD Telephone: 01279 755950 - Fax: 01279 657339  Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority. It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us. NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

Source – Sage Equity Release Service

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IFA Bishop's Stortford

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