Personal Finance

Q 1 Andrew and Jean have been considering a low-cost endowment mortgage. Briefly explain the problems inherent in such mortgages. According to Yahoo Finance low-cost endowment mortgage is the most usual form of endowment used to repay a mortgage. It provides life cover, which would pay off the mortgage if the policyholder dies. As long as investment assumptions are met the endowment should provide a lump sum sufficient to repay the mortgage at the end of …

…on income. The Unit trust is aimed at building capital over a longer period of time therefore aims of savings and Unite trusts are different. Andrew needs to have a judicious balance of all his investment options. He needs to have short term saving schemes for his family specially his children, pension schemes for him and his wife, Life insurance for the whole family and Unit trusts, Mutual funds and shares for future capital building.