Mortgage - pay it off early?

You'de get them back so you'll have to find somewhere safe to keep them. It's best to leave a pound on the mortgage and let the compay keep them in their strongroom.

tim

It used to be considered clever to leave a small balance outstanding, so that they would keep the deeds safe for you more or less free of charge, you'd simply pay an trivial amount of interest instead. Some lenders don't like beng taken advantage of like this, and have imposed limits to how small a balance they are prepared to entertain. So leaving a pound outstanding and paying 6 or 7 p interest per year is just not on, and typically you'd have to leave one or two grand in.

But since most land is now registered, deeds (for most properties) no longer have any intrinsic value, except as a curiosity. If they are lost, nobody cares.

As for the endowments, they don't really have anything to do with the property. Some lenders used to require endowments to be assigned to them (and the documents kept in their custody) and would consequently rescind the assignment and release the documents once the loan is repaid. However, the endowment, unless you specifically cash it in early (which is unlikely to be a terribly good idea), or make it paid-up, will just keep going, so you'd just keep paying the premiums, and get a cash lump sum in 9 years' time.

In message , Ronald Raygun writes

But many mortgaged properties are more likely to not be registered because they were bought years ago and AFAIAA an unregistered property does not to be registered on redemption.

Why do you say this?

Sure. But even then, loss of deeds is typically just a minor inconvenience. Often, deeds are stored with solicitors. Their premises are hardly immune to damage by flood or fire, and even lenders' storage facilities could be less than 100% secure.

Because doing so tends to involve you in a loss you would not sustain if you were to hang in there until maturity. Fair enough, hanging on might involve you in a loss you would not sustain if you cashed in early, e.g. if future performance (between now and maturity) is going to be abysmal.

One needs to weigh the pros and cons, and I guess that many endowments have invested in funds which haven't done particularly well of late, but who's to say that trend will continue? You might well do much better by leaving the dosh where it is than by extracting it, taking a surrender charge and/or MVA on the chin, and DIY investing the proceeds elsewhere.

I was careful to leave myself an escape route. I only said "unlikely to be terribly good". That doesn't mean it has to be really bad, it can still be good, just not always very good. OK?

Pay it off, buy a fireproof document box from the huge savings if you feel it's necessary for peace of mind to keep the paperwork in. You should get back the endowment policy and a release letter from the bank

- send a copy of the letter to your endowment co. to keep their records straight.

Ronald Raygun wrote: ...

My own endowment policies (which matured this year) were making an effective loss - 0% return over the past couple of years. But it was worth hanging on anyway. Check carefully before deciding to sell the policy or redeem it early.

In message , Mike Scott writes

For some reason the post below did not appear on my ISP so I am answering it by snipping from Mike's reply

'Tends' ? No. More the opposite I would say.

Er, yes!. The stock market has been a a good run for a couple of years now. If a managed life equity fund isnt showing recovery now then it never will. Most non with profit unitised life funds are of the 'managed' or 'balanced' variety which sanitises its exposure to the market anyway.

If its a With Profit fund then current low bonus rates are likely to continue especially as the FSA has forced LifeCos to divest huge wodges of their equities (thereby denying them the ability to enjoy the market's rally) and replace them with Gilts (which, by chance, the Govt needs to issue more of to fund its overspending).

After charges and taking into account that most life offices arent very good at managing dosh, then a life fund just isnt the place to be.

Well I am glad you have toned it down a bit in your explanation.

I think the phrase ''Likely to be a good idea' will make you right more times than your original will.

Perhaps your fly-by-night ISP is not as good as my fly-by-night ISP.

Not sure what you're trying to say here, old bean. What's the opposite of "tends"?

What I meant was that cashing in involves a "penalty" loss, i.e. you get back less than it's worth if you surrender the endowment to the provider. You also get back less than it's worth if you sell it (assuming someone wants to buy it). These losses you would not incur if you were to hang on (but you might incur different losses instead, as I went on to say).

There we are then.

But I meant "likely *not* to be a good idea" !! And you agreed !!

In message , Ronald Raygun writes

But I bet my fly by night ISP is worse than YOUR fly by night ISP!! So there!

How about "Does not tend"?

Hmm, 'less than its worth'.

That can only apply to a with profit fund not a managed collective fund. So that excludes a huge wodge of endowments. In your original post you referred to

Generally MVAs dont apply to endowments, usually just to 'with profit bonds'. The same effect is achieved though by reducing the 'terminal bonus' which is arbitrary anyway and cant be included in current 'worth'.

You seemd to be confusing 'with profit' funds and 'managed' funds.

Eh? Its worth what you can get for it.

Yes they could.

Accepted.

Yes, that's what I just said. "Not as good as" = "worse than". So what's with the "but"?

Of course it can. Well, OK, it depends how you define current worth, which I like to do in terms of likely maturity value scaled back by the likely growth rate, applied to the remaining period.

So even if you can take the money out now and invest it elsewhere at the same growth rate, you will end up with less than you would if you left it to mature as planned. Thus the decision to abort involves a loss which would not otherwise occur.

No, but admittedly I was focusing on WP.

Again, focusing on WP. At the end of the day (well, the term), it's worth to a buyer what it would have been worth to you. The buyer wants to make a profit. Their gain in the your loss. So they pay you a bit more than the company would for surrendering, but a bit less than it's "really" worth, the "real" value unfortunately being incapable of being realised.

That does not compute. Who or what is "they" and what could they do?

I think that if you study the T&Cs of any unit fund, there is a proviso that payment can be delayed, or the bid price be lowered, if there is a sudden high demand for redemptions.

It's similar to an MVA and I think I've seen it described as such somewhere.

Oh well, one to the NW then. They had no problem with this idea, they suggested it before I asked for it and they don't even chage me any interest (they could be rolling it up).

They still have my house insurance though, but as I own a flat, it is contents only so they take 12 quid a month from me and send me statement each year, I must run at a loss.

tim

In message , Terry Harper writes

Funds can switch the pricing but only within the limits of their creation, bid and offer prices. Apart form property funds most funds would need a complete market collapse for this to happen.