A mortgage where interest on the principle of the mortgage loan is paid, is called an endowment mortgage. An endowment policy is a type of insurance which covers the principle of the loan. This makes sure the mortgage holder will be able to pay off the mortgage when it's due. Endowment policies are called endowments in the UK. Monthly premiums must be paid by the policy holder. In the 70's and 80's, endowment policies were issued and were thought to be able to completely pay off the mortgage. However, this wasn't always the case. This has resulted in some policyholders selling them back to the issuing insurance companies for very low prices. This led the UK government to step in and protect consumers. Policyholders were told they may get a higher value with an endowment policy selling service. Some policies aren't very desirable, so some sales involve finding the right buyer for a particular endowment policy. Someone will be interested in buying it. By using an endowment policy selling service, the policy holder may even receive up to 35% more for their policy.
Comments