ArticlesReader.com Menu
Newest Articles
Most Viewed Articles
ArticlesReader.com RSS
Submit Article
Login
Signup
Search the articles

Articles Main Categories
Advice
Animals
Automobiles
Business
Career
Communications
Computer Programming
Computers
Entertainment
Environment
Family
Fashion
Finance
Food
Health & Medical
Home & Garden
Humor
Internet Business
Internet Marketing
Legal
Leisure & Recreation
Marketing
Other
Politics
Reference & Education
Religion
Self Improvement
Sports
Technology & Science
Travel
Writing
Subscribe
Receive alert message from us when new articles submitted to our site for free.

Enter your name

Enter your email

Syndicate

















Related Products
Home::Loans

The Truth About Endowment Loans

Author : Joseph Kenny
Chances are you've heard of an endowment mortgage, but you're not quite sure what it is. Nowadays this unique type of mortgage is in the news everywhere and is receiving a bad rap from many people. So what's the truth about an endowment mortgage, and how does it really work?



Endowment mortgages can be somewhat complex, although the system behind them is simple. They work in two parts. On one hand, they are a simple interest-only mortgage, and are treated as such. The borrower pays interest on the mortgage to his lender, and any terms that can apply to a normal mortgage are applied to these interest payments, including capped rates, fixed rates, variable rates, and any other special incentives the lender may offer. However, the borrower is not paying off his mortgage with these payments, as he would be with a typical mortgage: He is only paying the interest.



The mortgage itself is paid separately, and only at the time it ends. During the term of the loan, the borrower makes separate payments into an endowment fund. This fund is invested in stocks, shares, and life insurance, and allowed to mature throughout the term of the mortgage. At the close of the mortgage term, the endowment is cashed in to pay off the mortgage.



The downside here is obvious: If the endowment investments don't do well, then the endowment will not pay off the total balance, and the homeowner will still be responsible. Today's extremely low interest rates and sluggish stock market have turned some people away from the idea of endowment mortgages.



However, there are advantages to this unusual type of plan. Throughout the years of your mortgage, your monthly payments remain low (only the cost of interest) and will not be a strain in your income. The money you set aside for your endowment is, essentially, working for you; regardless of how well the market performs, chances are good that you will get back more than you paid in. Also, lenders that offer endowment mortgages offer borrowers a few escape clauses. If your endowment is in progress, and the stock market is doing poorly, you may be given the option to opt out of your endowment and invest your money instead in an additional savings plan which accrues interest on your payments. It won't gain you as much as an endowment potentially could, but it will protect you against poor investment performance.



Most lenders will also allow you to switch your entire mortgage, or just the amount of the projected shortfall, to a standard repayment mortgage.

For the financially organized, endowment funds can be a great way to pay your way through owning a home and come out clean on the other side. With an endowment mortgage, just as with any other investment, it pays to keep a close eye on your cash.


Article Source: http://www.articledashboard.com





Joseph Kenny is the webmaster of the loan information sites www.selectloans.co.uk/ and also www.ukpersonalloanstore.co.uk.





Spam emails More free articles

Related articles


  1. Buy Now And Really Pay Later!
  2. Be Careful With Loans For Bad Credit
  3. So Many Loans, So Little Time
  4. Can't Wait For Payday? Try Check Advance
  5. Short Term Solutions to Cash Flow Problems
  6. Beware of some "Get Cash Now" Vendors
  7. Fast Cash Payday Loans
  8. No Faxing Hassle-Free Payday Loans Can Be Yours
  9. The Best Day of The Week For Payday Loans
  10. Should You Get A Pay Check Advance?
  11. Payday Loans Available Even ToThose With Bad Credit
  12. Should You Get A Pay Day Loan?
  13. Money With The Click of a Mouse
  14. Fast Cash Now Easier Than Ever, but at a Price?
  15. Military Payday Loans Whens The Best Time To Avail Of These?
  16. Overnight Cash Can Be Yours
  17. Can A Pay Day Loan Truly Be Easy?
  18. Loan Basics
  19. Faxless Payday & Cash Advance Loans - Fast Cash, No Faxing Loans, The Easiest Payday Loan Process
  20. Easy UK Loans-Loans Now Come Handy
  21. Tenant loans- tenants only resort
  22. Get a Home Improvement Loan to Give a New Look to Your House
  23. Home Equity Loan
  24. Law Practice Finance
  25. Steps You Can Take To Protect Your Financial Information and Personal Identity From Fraud
More related feeds
The Truth About Endowment Loans
Chances are you ‘ ve heard of an endowment mortgage, but you ‘ re not quite sure what it is. Nowadays this unique type of mortgage is in the facts everywhere and is obtaining a bad bang from many people. So what ‘ s the truth about an ...

the truth about endowment loans
during the term of the loan, the borrower makes separate payments into an endowment fund. this fund is invested in stocks, shares, and life insurance, and allowed to mature throughout the term of the mortgage. ...

collection home lent mortgage uk and the truth about endowment loans
today ' s extremely low interest rates and lazy cattle market have rotten some people away from the conception of endowment mortgages. however, there are advantages to this unusual type of plan. throughout the years of your mortgage, ...

“Harvard Is Not Invulnerable” to Shocks: Faust’s Sober Financial ...
We will set our academic sights just as high, and we will ensure that the ambitions and vibrancy of our community and the strength of its commitment to the pursuit of truth remain unsurpassed.”

The Cave
Burke notes that the era of ever-rising tuitions is over; endowment income is falling; fund-raising prospects are retrenching; and public funding growing scarce. "The party's over," he writes. It's just that most of the leaders in ...

Pakistan's Palm Out for Pentagon Loot
Haqqani, 52, came to the United States in 2002, working as a scholar at the Carnegie Endowment for International Peace, where he helped Americans make sense of the Sept. 11 attacks. He then took a professorship at Boston University, ...

Winter (Economic & Market) Watch » Ministry of Truth Data ...
Does it mean that MBIA has liens on Pittsburgh property backing loans that it, MBIA, have issued, but that the value of that property is (much) less than the value supposedly backing the loan? Also, the fact that MBIA is leaning on ...

just answers: the truth about endowment loans at www.justanswers ...
ays this unique type of mortgage is in the news everywhere and is receiving a bad rap from many people. so what s the truth about an endowment mortgage and how does it really work for the financially organized endowment funds can be a ...

Loan To Value - Tuesday
Particularly as that endowment policy M wrote for me has about as much value as the discarded lead. Even the tunnel idea has lost it’s appeal, as another jobless individual emerging blinking into the watery winter sunlight, ...

Endowment Mortgage
Every coin has two sides and endowment mortgages are no different. The underlying truth of endowment policies is that the rate of growth in the investment will exceed the rate of interest charged. But, this may not be true all the times ...

 


 

2007 articlesreader.com - All Rights Reserved