Mortgage Shortfall

Eaton Legal Services


We deal with mortgage shortfall claims on a no win no fees basis and if the complaint is unsuccessful we will not make any charge to you. Our claims are completely risk free and you will not have to pay for any expenses during the course of the claim. If you would like free advice on the telephone, without obligation, just complete the contact form.

If you are one of the many people who have been told that your endowment policy is unlikely to cover the remaining balance on your home loan, you may be able to claim compensation to ensure that it is paid off. Unlike the previous generation of endowment holders, the 1980s and early 1990s gave rise to an unstable repayment plan, which held no guarantee of meeting its target.

The success of an endowment policy is in direct relation to the stock market and carries risks through being affected by market fluctuations. Endowment policies were taken out when interest rates were high, and it was reasonable to assume that they would earn a high amount. However these policies earned much less as rates fell in the late 90s. If your endowment policy is unlikely to meet your final repayment, you should receive a ‘Red’ warning letter from the provider.

There are a number of options open to people in this position. To make up the balance you can increase your payments with your existing policy and it is also possible to take out a separate investment like an ISA to pay the outstanding amount. If you decide to keep your current endowment going you can take out a repayment mortgage for the anticipated balance and the endowment policy will pay off the balance owing at the date of maturity of the policy.

If you have a mortgage shortfall you might decide you would rather take out a new repayment mortgage, for the entire sum, which you can do through your existing lender. If you keep your endowment policy going as well you will get a much larger lump sum than if you were to sell it or cash it in early. Not keeping the policy going means you may also have to take out separate life insurance in conjunction with the new payment arrangements.

You also have the choice of selling or cashing in your endowment policy early. It may have a surrender value (the amount you will receive if you choose to end the policy) if you have been paying it in for at least two years. Due to most of the commissions, fees and expenses being paid at the start of the policy, you will not receive as much as if you were to carry on paying into the policy to its maturity. You might even receive less than you paid in. Alternatively, if you have been paying into your policy for 5 years or more you can probably sell it to an independent broker. In either case it would be necessary to take out another repayment plan to pay off the amount owing on the property unless the property has already been sold and the loan has been paid off.

0845 456 8669