mortgages - advice needed

[byronkincaid]

Endowments suck these days as a vehicle to pay off your mortgage.

Part of the reason they suck is that the broker gets a large commision out of every months payment.

I personally would much rather use a tracker ISA. I pay less than half a percent charges on mine.

Safest way or course is a repayment mortgage.

All just imho

[thediceman]

There are cases inwhich an endownment have failed to live upto their projected growth and hence a shortfall occurs but this has largely resulted when a savings plans has been sold with a highly unrealistic projected annual growth of 12% plus. Oh for the joy of the yuppie years. Current saving plans are sold based on illustrations of a more consentive annual growth of 6%.
 

12%, or so I'm told, didn't seem highly unrealistic at the time.

Just like 6% seems conservative just now. In 20 years, after a worldwide fuel crisis/World War 3 or some similar jazz, 6% may seem, in hindsight, to have been highly unrealistic too.

People have been burned with all types of mortgages, not just endownments. But I wouldn't blame someone for being skeptical as to an endownments benefits if they knew someone for whom a shortfall has caused them serious problems.

I don't believe I blamed anybody for being skeptical all I did was challenge somebody to qualify their statement which is wrong and misleading.

Re: a % of growth the 12% was indeed not unrealistic at the point in time they were being quoted as these were the returns at that time. However this was over a short term period. What was unrealistic was thinking these rate of returns would continue longterm such as over 25 years as is the normal term of a mortgage. With reference to illustrating any return of a longterm investment it is however reasonable to look at the shares market over the long term rather than short term. The shares market over any longtime period has comfortably out performed the 6%.

And I agree Byronkincaid endownments are not the best investment vehicle and told Stallyon this in my pm to him. As regards a repayment mortgage being the safest indeed it is as you know for a FACT it will pay the mortgage off at the end of the term. However many a person is lead into a repayment mortgage and the fact is that it is not the best for them and infact ends up costing them more in the longterm.

[thediceman]

 
[/quote]


handbags!!!!!!!!!!!!!!!!!!!!
[/quote]

No handbags. But what's wrong with me highlighting some incorrect information which may mislead somebody into doing which ends up costing them. Godforbid trying to help somebody. Sorry if this offends you. I know you comment was in good faith but the fact is it is wrong and I questioned it accordingly.

Rather than the unhelpful and tad childish response of "handbags" and smilies why not justify your original statement and correct me if you think I am so out of order.

[thetank]

How about the unhelpful and tad childish "easy tiger" 

[ericstoner]

The 12% offered as a LONG tem return,in the mid 80's,was unrealistic. which its why industry analysts, who  produced the point of sales brochures,at that time used to outline three projected returns, which might be concidered before making your choice of policies.
The brokers however being salesman highlighted the better returns, to use the likelyhood of
what could be expected at the end of term,including a nice juicy BONUS.
Like pearls before swine the majority of people, who rely on these salesman for their long term future, were taken in.
The so called experts, should have known that over the long term economic cycle, rates fluctuate,these hedonistic days could'nt last.
In case you think I am talking with the benifit of hindsight,I would like it known that I took out my first mortgage in the mid eighties........I have have never had that "Your payments ar'nt enough to insure your debt will be met at the term end" letters.
Cos I for one realized that when The SUN produces a money page .......its time to batten down the hatches and think conservately.

[lazaroonie]

i wouldnt go for a repayment structured mortgage, but for a completely different reason.....

the best (IMHO) is to take out an interet only mortgage, and then make regular overpayments to it, of the amount that the repayment part would be, or more if you feel comfortable with it. This gives you flexibility, so that in the future if your personal income situation changed, you would be better placed to cope with it - ie you may only have to find £500 per month, rather than £700 per month.

[ifm]

i wouldnt go for a repayment structured mortgage, but for a completely different reason.....

the best (IMHO) is to take out an interet only mortgage, and then make regular overpayments to it, of the amount that the repayment part would be, or more if you feel comfortable with it. This gives you flexibility, so that in the future if your personal income situation changed, you would be better placed to cope with it - ie you may only have to find £500 per month, rather than £700 per month.

I have a repayment mortgage which allows this, i can pay what i like (even less than my actual repayment), i can also take payment holidays.
I'm not really sure if it's a good or bad thing but i also have a long term ISA which matures when i'm 55, the plan is to use that money to last me till i get my company pensions.
I seriously doubt that the state one will exist then.

[CelticGeezeer]

My 16 year old endowment for 20k informed me a couple of years ago that it was on target to to pay only 10k and that I should take action to ensure that I could cover the shortfall.

[ericstoner]

ul celtic,there are meny it that boat.