Archive for December, 2007

Moneysavingexpert forum has a new post on

This is a bit of a long shot, and I’m hoping somebody will be able to help out with this dilemma. Or refer me to a free site/agency who could give advice, if possible

I have a friend who, with her then-husband, took out a second endowment mortgage (they paid off their first to buy a bigger home when babies started coming) in 1990. Her understanding of ANY financial matters is limited and her recollection of the original selling details is vague.

However, what she does remember is understanding that at the time the mortgage would be due to be paid off, the endowment policy would have enough money to cover the mortgage AND provide about the same amount for them to have as a cash bonus.During her marriage, her now ex-husband looked after all the financial affairs - paperwork etc - until they separated in mid-2003 when she suddenly had to look after everything for herself (as well as four children, the youngest aged almost 3).

She received a letter in about August 2003 saying there was a projected shortfall in the endowment policy - but as she didn’t really understand it, and was overwhelmed with everything else she was coping with at the time, she just left it.At some point during their marriage, her ex-husband had a ‘clear out’ and threw away all paperwork which he deemed unnecessary.

To follow this post and see answers or contribute yourself just follow the link below

Act now on mis-sold endowments: new article - MoneySavingExpert.com Forums

Tags: endowment, mortgage, financial

Mortgage exit fees article from moneysavingexpert.com

Pay off a mortgage and you’ll be charged a fee, technically known as mortgage exit administration fee (MEAF). It’s supposedly to cover staff, legal and admin costs e.g. changing the registration of the property at the Land Registry.

MEAF’s are known by a variety of other names including ‘deed release fees’, ’sealing fees’, ‘final administration fees’, ‘discharge fees’ and ‘final redemption fees’.A MEAF is just one type of mortgage fee, don’t get it confusedA MEAF is a very specific charge, and this ruling only applies to it; arrangement fees and other fees that are paid when you take a mortgage out are not part of this.MEAF’s are commonly confused with ‘early repayment fees’, also known as ‘redemption penalties’. They’re not the same thing, and this ruling doesn’t apply to redemption penalties.

To clarify:

* Early Redemption Penalties can’t be reclaimed. These are charged when you repay or switch mortgage during a special deal, such as a fixed or discount rate (see the Mortgage Guide / Remortgage Guide for details).

* MEAFs can be reclaimed. These are always charged when you pay off or switch a mortgage, regardless of what your deal is. This means you can sometimes pay both a ‘redemption penalty’ and a MEAF.Why can you get your money back?

MEAF costs have accelerated quicker than Richard Hammond. Ten years ago they cost around £60, but since then some have climbed to nearly £300.In January ‘07 the FSA told lenders they must justify these increases; and noted many lenders were charging people much more than it stated in their original contracts.

Lenders’ excuse was the contracts contained clauses allowing them to “vary the fee over time”, but the FSA said as the term can be varied without the consumer agreeing, this falls foul of the unfair contract laws.Lenders were given until the end of February ‘07 to decide on what action they’d take for past and current customers, and in most cases they simply agreed to refund customers the difference. Over 100,000 people have been through the reclaiming process via this site alone.

Mortgage Fees: Reclaim £100s if you’ve switched or repaid a mortgage…

Tags: mortgage, exit, fee

How much of your mortgage do you need to have in savings?
Here’s a forumula at moneysavingsexpert.com
Complex? yes, but if you are into the maths, you might want to visit the link and try it out for yourself.

EverSoRegular MoneySaver are enough north to be cold

The NumbersThis seems to be discussed a lot recently, on this board and the debts board.Lisyloo did a calculation a while back that showed you needed to have 48% of your mortgage amount in savings, although this was based on certain assumptions about relative rates. !The calculation is in this

Since interest rates have moved on from there, I thought I would provide a formula which anyone can use to plug in real numbers at any time and make the calculation.

To define terms:OffsetRate — this is the interest rate you pay on an offset mortgage.NonoffsetRate — the interest rate you pay on a non-offset mortgage (generally lower)SavingsRate — this is the rate you can get on your savings (AFTER taxes) in a savings account if you don’t have an offset mortgageX — this is the breakeven point. !

If you have more than X percentage in savings, you will be better off with an offset mortgage, less than X you are better off with a normal/flexible mortgage.The left side of the formula is the annual percentage interest you will pay with the offset mortgage. !The right side of the formula has two terms. !The first is the interest you will pay on your non-offset mortgage, the second is the interest you will receive on your savings.
(100-X) * OffsetRate = 100
* NonoffsetRate – X
* SavingsRatesimplifying:100
*OffsetRate – 100
* NonoffestRate= X
* OffsetRate – X * SavingRatesolving for X:X = 100 * (OffsetRate-NonoffsetRate) /

Offset Mortgages — the Numbers - MoneySavingExpert.com Forums

Tags: mortgage, formula, savings