Endowment mortgages are mortgages where the interest on the principle of the mortgage loan is due. The principle of the loan is covered by a type of insurance known as an endowment policy. The endowment policy ensures the mortgage holder will be able to pay off the loan when it comes due. An endowment is an insurance policy and the policy holder must pay monthly premiums.
The UK government stepped in with legislation to protect consumers by informing them that they may have higher value with a endowment policy selling service. By selling endowment policy through such a service, the endowment policy holder may receive up to 35% more for their policy.
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