Debt Glossary : Mortgage Shortfall
Endowment mortgages were a popular type of mortgage in the 1980s and 90s, relying on only paying the interest charges on the mortgage and investing the remainder of your payments with the intention of providing enough return to clear the orginal mortgage advance and maybe even providing a profit on top.
Unfortunately, because of poor stock market performance or unrealistically high expectations, many endowment mortgage holders find that the investments will not be enough to clear their debt, and they face a mortgage shortfall where they will still owe money on their property at the end of the mortgage term.
Mortgage shortfalls can run into many thousands of pounds, but if you can show that your endowment policy was mis-sold to you by the mortgage adviser not properly following regulations, you may be eligible for compensation to make up the difference.
However, many firms have placed time limits on making compensation claims, and so if you've been informed of a possible shortfall and have not yet made a claim, you may find that you're too late - contact your mortgage provider or a specialist endowment claims company for more advice.
© 2008 Debt Sorter
