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The mkiv Supra Owners Club

Endowment Mortgage shortfall


MaveriK

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Well, like alot of people i was duped into getting an endowment that was over spec'ed and is never in a million years going to hit its totals. I have managed not to go and have a frank talk with the guys that sold it to me as a punch in the chops often offends.

 

So, i have some forms to fill in but want to put a covering letter in as well to save time on questions/bitchings etc. Other than "you didnt mention there could be a short fall in fact you basically told me i would holiday for weeks at a time and buy a 1000bhp Aerotop in flip paint with the profit" what else can i put in that will seal the deal?

 

Ok, i fibbed a little about the promises, he never mentioned flip paint :D

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I'm in the same boat with an endowment from years ago.....Not sure how anyone can blame anyone other than themselves in most cases????? Its explained clearly verbally and on paper that at "X"% growth you will get "£xX" or at "Y"% growth you will get "£xY" also if it grows and "x-shite" you will receive "£F-all" like it.

 

You cant whinge when you buy a lottery ticket and dont win?????? Whats the difference, how many people deal stocks and shares and lose? You wont always win

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The problem is that (at least when I got mine) they choose three projected growth rates to illustrate the return on the endowment - one average (which the mortgage calcs are actually based on), one "high" (woo-look how rich you could end up), and one "low" (let's not talk too much about that).

 

Yes, it should all be written down but I guess it is down to the individual salesman how much emphasis they place on the "low" figure. It also depends on what % groth rates the bank or buliding society are officially using to illustrate the "average" rate. During the 1980's the growth rates were set very high and expected to stay that way.

 

My PEP mortgage needed to maintain an everage 7.5% annual growth over its 25 year period in order to pay out, and for the first three years it nearly doubled that, but then the bottom fell out of the markets, people started crashing airliners into buildings and that was the end of that. Even now its only just clawed back into positive growth (but I've started again with a straight repayment, anyway).

 

The other thing is that for a 25 year mortgage, you sometimes don't get a review until after the first 10 years, then after 15, then 20, but because the money you put in at the start works hardest (because it has the most time to grow) the first review is usually too late to allow you to take any corrective action other than piling more cash in.

 

I asked the Halifax what the maths behind the year-on-year growth figures was so that I could monitor it myself when I got the statements every 6 months. They couldn't tell me, so I had to work it all out myself, and I'm bloody glad I did.

 

If I was still with that morttage, I'd be about 5% behind the required growth rate and still a year away from my first review.

 

It's not good. :(

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This is why it was repayment for me all the way when we got ours 6 years ago. At least it's guaranteed to be paid.

I can understand why so many people went for them though as everyone really believed it was better for all the said reasons. It's like pensions too.

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read this, it might help...

 

http://www.which.net/endowmentaction/questions/was_i_mis_sold.html

 

also some Contacts for advise...

 

Financial Ombudsman Service: 0845 080 1800

Financial Ombudsman :- http://www.financial-ombudsman.org.uk/

FSA :- http://www.fsa.gov.uk/

 

Its well worth complaining as you stand a very good chance of receiving compensation as most companies budget for this.

 

I'm a mortgage advisor and i get at least 1 person a week stating that their endowment is not on target. Your options are:-

 

-cashing it in and go full repayment

-selling it on the open market (might get more than cashing it in)

-make up for the shortfall with a part interest, part repayment mortgage

 

You're not alone this is a major fukc up in the finance industry along with Pensions but we won't even go there...

 

hope you sort things out.

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Well worth doing, we took 2yrs and a massive pile of paperwork between us and the FSA, luckily had alot of the original qoutes on paper.

The place that sold it had gone bust ages ago so they paid out from the comensation fund, was expecting between 2 and five grand but got £9500 !!

Paul

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hi mate did all mine on my own before these companys set up to help .

if you write a letter of complaint to the endowment firm , you mus say that you were MISS SOLD, and a repayment option was not offered .

they have to by law reply to your letterif you say the above .

it took about a year to finalise everything for me but they have to put you in the possition you would have been in if youd taken a repayment out.

hope this helps peter

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