Wednesday, May 26, 2010

Should I switch from part repayment/part interest only mortgage & surrender endowments to pay of

I have a mortgage which is part repayment/part interest only. I am thinking of switching to full repayment as there is a big shortfall on the endowments...%26amp; then cashing in the endowments to pay off credit card %26amp; loan debts. I will be then debt free but have bigger mortgage repayments a month.But by doing this I will save 鎷?00 a month by not paying loans etc.Also it ensures my mortgage will be fully paid off in the 12 years I have left to run on it, instead of having to try %26amp; make up the shortfall from my own funds (which I don't have). But is this the right thing to do? Should I switch to full repayment %26amp; do all this or not? I know I will have to take out a life insurance policy to cover mortgage for death (as death cover on endowments will no longer be there if I cash them in).



Should I switch from part repayment/part interest only mortgage %26amp; surrender endowments to pay off loans etc?

I done this two years ago and dont regret it .



go to full repayment mortgage look for best fixed rate deal for 2to 3 years then re mortgage again for best deal every 2 years . surrender endowment .



Should I switch from part repayment/part interest only mortgage %26amp; surrender endowments to pay off loans etc?

i dont knooow



Should I switch from part repayment/part interest only mortgage %26amp; surrender endowments to pay off loans etc?

You sound like you have thought this through enough to find your own answer. You know your own situation better than others.



I write down every financial fact of my life, add it all up, see how it looks both short-term and long-term, and then go from there. I try to draw a picture of my total worth, and what's often made a very big difference is reducing debt.



Should I switch from part repayment/part interest only mortgage %26amp; surrender endowments to pay off loans etc?

Seek Legal advice.!!!!!!



Should I switch from part repayment/part interest only mortgage %26amp; surrender endowments to pay off loans etc?

Ask your bank for an amortization schedule for each type of loan. That may be a real eye-opener. You're correct that your current scheme leaves a balloon payment at the end - and that's never a good idea. Go for the full repayment; you'll be glad when you see how much you really saved (compare the amortization schedules). Also be sure to get a fixed rate of interest - not adjustable.



Should I switch from part repayment/part interest only mortgage %26amp; surrender endowments to pay off loans etc?

It seems a very reasonable thing to do, especially if you're going to be 鎷?00 per month better off. It's always a good idea to get rid of unsecured loans and credit cards as these are often an expensive form of borrowing. In addition, to convert your mortgage into a repayment mortgage is again a good idea to ultimately get rid of it. I'm not a financial advisor but on the info you've provided personally I'd go for it.

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