One Lender, Two Policies

 

Miss B Glover

 

11th May 2010

                       

Dear Sir / Madam,

 

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

 

Since taking out my first mortgage, I have increased my loan and taken out an additional second endowment to cover the increase (new policy).  During my mortgage term, I had both a fixed rate and a discounted rate for an element of the term.  Standard MIRAS applied throughout my mortgage term, the details are as follows:

 

Loan Chelsea BS

£50,250

Completion date

21st July 1989

End date

14th May 1996

Term

25 years           

First payment made

1st Sept 1989

Endowment premium

£69.25 from 21/07/1989 for 25 years

Surrender value 11th May 2010

£31,821

Fixed rate

5.75% from 21/07/1989 for 10 years       

 

 

Loan Chelsea BS

£20,250 increase

Completion date

14th May 1996

End date

11th May 2010

Term

18 years

First payment date

1st July 1996

Endowment premium

£31.25 from 14/05/1996 for 18 years

Surrender value 11th May 2010

£16,495

Discounted rate

1.5% from 14/5/1996 for 3 years 6 months

 

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

 

Yours faithfully

 

Miss B Glover

 

Some research via the endowment supplier and lenders verify the details are correct and that the second policy was a new policy and not a top-up. The decreasing term assurance payment would have been £9.09 for the first loan from 21/07/1989 for 25 years and £4.40 from 14/05/1996 for 18 years.

 

No MIRAS is applicable to the second calculation as the full MIRAS allowance is allocated to the initial advance (calculation 1).

 

Note: Due to the fixed rate period and the penalties linked to the scheme, the fixed rate was maintained for the full 10 years, on the original loan.  The discount was applied to the additional advance. Due to the multi calculation process, the system allows easy application of different rates to be applied to the additional borrowing.

Related Topics

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