The same is true of the assumption that the mortgage repayment will rise (it could be a longer-term fixed rate for example), or by how much - we have used the Standard Variable Rate (SVR), but the borrower may be using a mortgage which charges a different interest margin.
The mortgage is a repayment mortgage and I have an endowment policy which at it's lowest prediction is set to pay off the mortgage (including the arrears) with a surplus (one of the few).
He suggests people can switch to a repayment mortgage, or part endowment and part repayment - although they should check with their lender that there are no penalties or costs for doing so.
It involves comparing the interest and premiums you have actually paid on your endowment mortgage with the interest and capital repayments you would have paid on an equivalent repayment mortgage.
The redress is calculated to cover any losses you have suffered so far from having an endowment rather than a repayment mortgage.
For most borrowers now, budgeting on a repayment mortgage basis is essential.
You could change the shortfall part of your mortgage to a repayment.
It also compares the current "surrender value" of your endowment policy with the amount you would have paid off by now with a repayment mortgage.
You only risk having a future "shortfall" if you now decide to carry on with the endowment, rather than surrendering your endowment and switching to a repayment mortgage.
The endowment is merely the repayment vehicle, and the mortgage may still be switched from one lender to another to take advantage of the best rates of interest.
Others may consider cashing in their endowment and using the proceeds to pay down the mortgage, before paying the rest through a repayment method.
People may be tempted to take out an interest-only mortgage, because the monthly payments are lower than a repayment deal.
In the case of Kensington, the FSA found that between January 2007 and the end of October 2008 the firm's staff had focused on getting customers to repay their mortgage arrears as quickly as possible, rather than agreeing a repayment schedule they could afford.
He added that people facing repayment difficulties did not have the luxury of the cheap mortgage rates that are seen in the market at present.
Mortgage lenders have agreed to write to borrowers to ensure they have a repayment strategy in place, concentrating on those whose policies mature first.
To secure repayment of the note, on that same day, the Keens granted Chase Bank a mortgage over the Shubert Lane property.
FORBES: Chase Tries to Fix Mortgage Screw-up by Arguing Borrower Not Good at Latin
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