Fergus Muirhead answers your consumer questions
I'm Fergus Muirhead and I'm here to answer any questions you may have about any money or consumer issues.
I'll be dealing with a selection of your queries every other Wednesday on Scotland Live, on Reporting Scotland and here on the BBC Scotland news website.
Please drop me a line here at firstname.lastname@example.org with your questions.
You can also read more on money and consumer issues on my own blog.
Q. I am due some money from an endowment when it matures and although it should pay £13,500 towards my mortgage it will only amount to £11,000, leaving a shortfall. I also have around £11,000 of credit card debt so should I use this money to clear this debt instead or can my mortgage company insist I use it towards my mortgage? I really need good advice on this. Shona.
A. This is a question that could take all day to answer, and we might not be finished even then! I presume that you are repaying your mortgage on an interest-only basis, which means that you will only ever be free of it when you use a lump sum of money from somewhere to repay the loan. I don't know how your mortgage is set up or when it is due to be repaid but you could certainly ask the lender to extend the term of the loan and use the £11,000 from your endowment policy to repay your credit cards instead. And in a way it might make sense since the rate of interest on your mortgage is likely to be lower than that on your credit card. Having said that, my concern would be that you will now have no means of repaying your mortgage at all, since you will have used your capital to repay your credit card debt. Presumably you are repaying some money to your credit card companies at the moment and if this was gone then you could increase the money you were paying to your mortgage company so that it was moved to a repayment loan. All of this would have to be properly thought out and costed before I would give any definite advice. You could either drop me a line again with full information and I can then look at the numbers, or you could approach your lender and tell them what you are thinking of doing. It is always better to have them on your side.
Q. Could you possible advise what you think of putting money into bonds over a fixed period? Possibly three or five years? I keep getting conflicting advice on the internet so I'm getting confused. Betty Hughes.
A. You don't say what the conflict of advice was but there are a few issues to raise about fixed bonds - presuming that by this term you are referring to a savings scheme from a bank or building society that lasts for a fixed term of years and pays a fixed rate of interest for that term? Alternatively you may be referring to an investment bond offered by an insurance company where your capital may be at risk and you may get back less than you invest at the end of the fixed term. You should only consider this type of investment if you are prepared to take a risk with your savings. The first issue you need to consider when looking at a fixed term savings plan would be whether the tem you choose at the outset really reflects the length of time you will be able to save for. If you choose a term that is too long because the interest rate looks attractive then you may lose some of that interest if you have to take money out of your investment early - assuming you are allowed to do so at all. Once you have decided the timescale that you would like to invest for you need to look at the interest rates on offer. Don't just assume that because you are investing in something that is called fixed term that it means you are getting the best rate of interest. Have a look at a couple of comparison websites and see what the best rates are that are available online as well as from a bank or building society branch.
Q. I was made redundant last January. I have had mortgage insurance and cover for a loan I have. I am now coming to the end of the insurances and as I turned 60 last year was forced to accept my state pension. I am married and my husband still works full-time. My mortgage lender is not prepared to help as they say we have enough money to pay the £1,012 per month and they must get paid even if no one else does. I have tried to find work as per terms of said insurance but 2011 is looking bleak. What can I do? Patricia McManus
A. I'm not sure on what basis your mortgage company has refused to help since it must be in their interest to help you come up with a solution that ensures that you can continue to pay them. I would think that you need to go back to them with a full budget that shows all of your income and outgoings on a month-by-month basis and shows whether you can afford to continue with your existing arrangement, and if you can't whether it is likely to be a short or long-term issue for you. It's difficult to be specific since you don't really give me a huge amount of information in your e-mail so if you want to write again with a fuller picture then I would be happy to have a look at the detail of your situation for you.