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The Mortgages Where 70-Year-Olds Borrow To Help Their Grandchildren

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Dear god. It's like a parody but it's real. http://www.telegraph.co.uk/personal-banking/mortgages/the-mortgages-where-70-year-olds-borrow-to-help-their-grandchild/

"One Family, a mutual, is planning the UK’s first genuinely intergenerational mortgage within the next three months, which will allow grandparents to borrow to fund a child or grandchild’s first home, but for other family members to pay the interest or settle the debt."

No longer is BOMAD enough, now they're roping in grandparents. Mortgages for aunts and uncles next. Second cousins twice removed soon.

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The picture is a bit odd - looks like the grandchild is about to push her grandad over on the expectation she might be able to access her inheritance even sooner.

It's no more crazy than Barclays 5.5 times salary no deposit mortgage - as long as grandad puts aside 10 per cent of the mortgage in a savings account for three years which is then released if grandkid has paid the mortgage in full.

http://www.telegraph.co.uk/personal-banking/mortgages/barclays-no-deposit-mortgage-lets-you-borrow-55-times-your-incom/

Edited by MARTINX9

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Certainly wouldn't have got any business from my family... grandparents STR and blew £250k before they both died, leaving my parents an inhinheritance of less than £10k and my parents are now well on the road to doing exactly the same.

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Certainly wouldn't have got any business from my family... grandparents STR and blew £250k before they both died, leaving my parents an inhinheritance of less than £10k and my parents are now well on the road to doing exactly the same.

Can't blame them - it's their money.

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The only good thing in this article is at the bottom

Canada: Bank of England Governor Mark Carney was instrumental is squeezing mortgage terms from 40 years to 25 when in Canada after property inflation had driven prices up.

Lets hope he does it again, may be worth a campaign to highlight the danger.

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JAPAN'S 100-YEAR BANK LOANS
fortune_logo.gif
By Susan Moffat
May 21, 1990

(FORTUNE Magazine) – The Japanese, famous for saving, are now loading their future generations with debt. Nippon Mortgage and Japan Housing Loan, two big home lenders, are offering 99- and 100-year multigeneration loans with interest rates from 8.9% to 9.9%. Borrowers put up their homes as collateral. Such deals represent sound fiscal planning for some families, especially the very wealthy living in Tokyo who, perversely, can almost not afford to inherit a house: Japan's graduated inheritance tax can take up to 70% of a family's assets, including its home. Under the 100-year loan plan, a second generation can move into a deceased parent's home and pay inheritance taxes on only a fraction of the house's value. Most Japanese, of course, don't have such problems. Their challenge is to find a house they can afford, especially if they want to live in Tokyo. The housing crunch there inspired Robinsons on the Sand, a 1989 hit movie that's now No. 8 on Japan's VCR rental list. It tells the story of a salaryman and his family, who are willing to do anything to escape the misery of their tiny rented apartment. The ''anything'' turns out to be living on constant

display as a ''model family'' in a spacious model home while potential buyers tramp through. Jealous neighbors bully the children and make obscene phone calls. Before long, one of the two sons turns delinquent, the daughter is killing kittens, and the father ends up homeless in the street. Mom and the kids finally return to their old apartment, where they watch TV in the closet in blessed privacy. So much for that particular family's Japanese dream.

http://archive.fortune.com/magazines/fortune/fortune_archive/1990/05/21/73567/index.htm

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Dear god. It's like a parody but it's real. http://www.telegraph.co.uk/personal-banking/mortgages/the-mortgages-where-70-year-olds-borrow-to-help-their-grandchild/

"One Family, a mutual, is planning the UK’s first genuinely intergenerational mortgage within the next three months, which will allow grandparents to borrow to fund a child or grandchild’s first home, but for other family members to pay the interest or settle the debt."

No longer is BOMAD enough, now they're roping in grandparents. Mortgages for aunts and uncles next. Second cousins twice removed soon.

...just lenders out of control ...and the BofE impotent as usual.... :rolleyes:

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Dear god. It's like a parody but it's real. http://www.telegraph.co.uk/personal-banking/mortgages/the-mortgages-where-70-year-olds-borrow-to-help-their-grandchild/

"One Family, a mutual, is planning the UK’s first genuinely intergenerational mortgage within the next three months, which will allow grandparents to borrow to fund a child or grandchild’s first home, but for other family members to pay the interest or settle the debt."

No longer is BOMAD enough, now they're roping in grandparents. Mortgages for aunts and uncles next. Second cousins twice removed soon.

BOGAG?

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JAPAN'S 100-YEAR BANK LOANS

fortune_logo.gif

By Susan Moffat

May 21, 1990

(FORTUNE Magazine) – The Japanese, famous for saving, are now loading their future generations with debt. Nippon Mortgage and Japan Housing Loan, two big home lenders, are offering 99- and 100-year multigeneration loans with interest rates from 8.9% to 9.9%. Borrowers put up their homes as collateral. Such deals represent sound fiscal planning for some families, especially the very wealthy living in Tokyo who, perversely, can almost not afford to inherit a house: Japan's graduated inheritance tax can take up to 70% of a family's assets, including its home. Under the 100-year loan plan, a second generation can move into a deceased parent's home and pay inheritance taxes on only a fraction of the house's value.

http://archive.fortune.com/magazines/fortune/fortune_archive/1990/05/21/73567/index.htm

70% inheritance tax - blimey.

Imagine the squeals if they tried to implement something like that here..

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Certainly wouldn't have got any business from my family... grandparents STR and blew £250k before they both died, leaving my parents an inhinheritance of less than £10k and my parents are now well on the road to doing exactly the same.

At least your GP's and P's are not contributing to house price inflation.. :)

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It's a great way of blowing your own and your siblings inheritance before anyone gets a chance to realise what's going on. Better that the grandparents simply blow it on themselves as other have said.

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Can hear the sound of a barrel bottom being scraped. Also it may just be to mess with heads before the HPC. Just because it's on offer doesn't mean any Grandad/ma got to take it.

They're exposed enough to the market - older owners. HPI long-wave outright owners mortgages paid off not making the banks any money. All those houses can crash hard and doesn't hurt the banks. The older owners carrying the HPC risks.

And what had been the rise of the Granlords. They'll all be selling into a market of only FTBs and a few upsizers.

Just went out for lunch and a table of grannies (15 of them) were sitting in the same eatery, enjoying a Christmas meal... the main topic of conversation (for the entire hour) - what a terrible mistake btl had been (most of them seemed to be letting properties... this was a posh eatery!) - shock at the latest changes - more complaints about some compulsory landlord register with (shock, horror) classes for landlords - they were seething... seems like Osborne's budget hit them for six - how I smiled!

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At least your GP's and P's are not contributing to house price inflation.. :)

Yeah that's my point, personally I don't resent not getting any kind of windfall, I've got so used to living such a frugal and non-materialistic life that I honestly wouldn't have anything to spend an inheritance on anyway.

Possibly the one thing that does grate a little is when my boomer parents and proto-boomer grandparents refer to their wealth as being "hard earned" which simply isn't/wasn't the case.

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Certainly wouldn't have got any business from my family... grandparents STR and blew £250k before they both died, leaving my parents an inhinheritance of less than £10k and my parents are now well on the road to doing exactly the same.

They earned it through hard work and sacrifice, nothing to do with being born at a fortunate time. Good on em. Teach the kids and grandkids some important life lessons.

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