One Lender with Further Advance

 

Mrs K Hope

11 Hill Top

Coventry

CV4 2SA

 

15th April 2010

 

Dear Sir / Madam,

 

Based on the advice from my financial advisor, I took out an endowment mortgage. At the time, I was strongly advised to take out an endowment mortgage over my choice of repayment. I did and still do consider that I was given bad advice.

 

Standard MIRAS applied to my mortgage, the details are as follows:

 

Loan - Woolwich

£37,500

Completion date

15th March 1989

Term

25 years

First payment made

1st April 1989

Endowment premium

£48.00 from 15/03/1989 - 14/02/92

           

 

Further advance

£16,000 on 14/02/1992

 

 

Endowment premium

£73.00 from 14/02/1992 for the remaining 22 years, this accommodates for the increase in loan.

 

 

Surrender value 15th April 2010

£31,930

 

I look forward to receiving your reply, advising me of how to take this forward.

 

Yours faithfully

 

Mrs K Hope

 

Some research via the endowment supplier and lender verify the details are correct. The decreasing term assurance payment would have been £8.02 for the first loan from 15/03/1989 for 25 years and £3.05 from 14/02/1992 for 22 years.

 

 

Please note the further advance has been entered as an accrued fee to ensure that initial interest is not re-applied (i.e. interest normally accrued in the first month and collected with the payment in the second month).

 

For those companies who increase the endowment premium and still apply one surrender value this example illustrates how the details would be entered.

 

If a further policy is arranged it would have to be dealt with as a 2nd calc and the process in the multi-calculation guide needs to be followed.

Related Topics

Endowment Cases
Initial Entry Screen
Main Adjustment Set
Endowment Adjustment Set
Repayment Adjustment Set
Main Screen
Comparison Screen