crazypabs Posted July 21, 2017 Share Posted July 21, 2017 IO - Be Afraid, Be Very Afraid... In the Citizens Advice Bureau no one can hear you scream! https://www.ft.com/content/4e0377e6-6ad4-11e7-bfeb-33fe0c5b7eaa Quote A repayment crunch looms with repercussions for hundreds of thousands of borrowers 1.9m - The number of borrowers who are just paying off the interest on their mortgage debts, according to the Council for Mortgage Lenders This year and next, the Financial Conduct Authority expects to see “peak maturity” of such mortgage plans sold in the 1990s and early 2000s. The people who took out these loans are likely to be approaching retirement, so may have trouble obtaining another loan if their endowment fails to cover the repayment. However, house price rises across the UK mean the FCA forecasts most will have relatively high levels of equity in their property.The second crunch point is expected in 2022. This is when the FCA forecasts that a large tranche of interest-only mortgages issued between 2003 and 2009 will start to mature, peaking in 2028. However, these loans — issued at the height of the credit crunch — were typically advanced to borrowers classified as “less affluent” who will be in their 40s and 50s when repayment is due. Quote Link to comment Share on other sites More sharing options...
JustAnotherProle Posted July 21, 2017 Share Posted July 21, 2017 (edited) It's perfectly fine, all of the IO mortgages will have adequate repayment plans in place ready to conclude the loan, all after rigorous checking by the lender at the time the loan was acquired. Edited July 21, 2017 by JustAnotherProle Quote Link to comment Share on other sites More sharing options...
winkie Posted July 21, 2017 Share Posted July 21, 2017 1 minute ago, JustAnotherProle said: It's perfectly fine, all of the IO mortgages will have adequate repayment plans in place ready to conclude the loan, all after rigorous checking by the lender at the time the loan was acquired. Why would the lenders care, they own the first charge on the home and they make more from IO than repayment.....why would they want a home owned? then their income is lost....have to find a new willing borrowers. Quote Link to comment Share on other sites More sharing options...
spyguy Posted July 21, 2017 Share Posted July 21, 2017 16 minutes ago, crazypabs said: IO - Be Afraid, Be Very Afraid... In the Citizens Advice Bureau no one can hear you scream! https://www.ft.com/content/4e0377e6-6ad4-11e7-bfeb-33fe0c5b7eaa I strongly disagree with that article. Its millions not 100ks. Quote Link to comment Share on other sites More sharing options...
spyguy Posted July 21, 2017 Share Posted July 21, 2017 'Linda needs to have a difficult conversation with her son. The expectation was that one day, he would inherit the family home in London where she still lives. But her decision to take out an interest-only mortgage of £182,000 nearly a decade ago has effectively cost him his inheritance ......' Few questions were asked when the 66-year-old part-time school teacher took ....' OK, why is a then 56 yo part time teacher taking out a ~200k loan? You know, 4 years before she was probably planning on retiring. Did she expect to become a fulltimeGS trader in those 4 years? Stupid fcing bint. There's nothing to inherit, just debt. Quote Link to comment Share on other sites More sharing options...
spyguy Posted July 21, 2017 Share Posted July 21, 2017 “I’ve had a letter from my lender asking what I intend to do, but I’ve ignored it,” she says, admitting she has no way of paying off the debt. “It gives me headaches just to think about it.” Dear bank. I can not consider paying my debt as it gives me a headache. Love Linda xxxxx Quote Link to comment Share on other sites More sharing options...
spyguy Posted July 21, 2017 Share Posted July 21, 2017 "Gary, a self-employed fitness instructor, is one borrower worried about his interest-only mortgage. He’ll soon have to hand over a lump sum of £129,000 to his bank, but it is money he doesn’t have. “We didn’t have things explained to us,” says Gary, who lives with his wife and daughters in Luton. “Anyway, our hands were kind of tied at the time — it was more or less our only option.”' Quote Link to comment Share on other sites More sharing options...
JustAnotherProle Posted July 21, 2017 Share Posted July 21, 2017 6 minutes ago, spyguy said: "Gary, a self-employed fitness instructor, is one borrower worried about his interest-only mortgage. He’ll soon have to hand over a lump sum of £129,000 to his bank, but it is money he doesn’t have. “We didn’t have things explained to us,” says Gary, who lives with his wife and daughters in Luton. “Anyway, our hands were kind of tied at the time — it was more or less our only option.”' The biggest financial decision you will ever make and you didn't bother to check the details or ask how he was going to pay of the principle?? I'm calling BS on this one. Quote Link to comment Share on other sites More sharing options...
Society of fools Posted July 21, 2017 Share Posted July 21, 2017 1 minute ago, JustAnotherProle said: “We didn’t have things explained to us,” says Gary, I know some concepts in real estate financing are hard to get your head around Gary, but just what part of Interest Only did you not understand ??? Quote Link to comment Share on other sites More sharing options...
spyguy Posted July 21, 2017 Share Posted July 21, 2017 2 minutes ago, JustAnotherProle said: The biggest financial decision you will ever make and you didn't bother to check the details or ask how he was going to pay of the principle?? I'm calling BS on this one. Or look up 'IO'. Yep. Just ass covering crap, waiting for a bail out. Quote Link to comment Share on other sites More sharing options...
Unexpected Posted July 21, 2017 Share Posted July 21, 2017 Just for a bit of balance, my interest only mortgage has been much cheaper than renting. However, I did have a decent deposit so was able to get a low interest deal on an amount somewhat less than the price of the house. Its not something I'd fancy doing if I had a 95% LTV, or didn't think my wage would be enough to eventually pay off the debt. Quote Link to comment Share on other sites More sharing options...
Monkey Posted July 21, 2017 Share Posted July 21, 2017 3 minutes ago, JustAnotherProle said: The biggest financial decision you will ever make and you didn't bother to check the details or ask how he was going to pay of the principle?? I'm calling BS on this one. I will be repeated 1000's of times across the land. Some think that because its a mortgage that the principal is being paid, they only understood the monthly payments. Yes, there are people this thick out there. Quote Link to comment Share on other sites More sharing options...
dougless Posted July 21, 2017 Share Posted July 21, 2017 I am rather enjoying these articles. It comes on the same day that the radio told me that more people would fly off on holiday than ever before and our airspace was at peak aircraft movements. Sod the fact that many of these holidays are paid for with credit; sod the fact that aircraft are a major cause of global warming/environmental damage; sod the fact that our economy is teetering on the edge; just go on holiday! Hang on, maybe that's a good idea after all. Quote Link to comment Share on other sites More sharing options...
newbonic Posted July 21, 2017 Share Posted July 21, 2017 38 minutes ago, JustAnotherProle said: It's perfectly fine, all of the IO mortgages will have adequate repayment plans in place ready to conclude the loan, all after rigorous checking by the lender at the time the loan was acquired. Where is Eric with his big red LL letters anyway? Quote Link to comment Share on other sites More sharing options...
Monkey Posted July 21, 2017 Share Posted July 21, 2017 4 minutes ago, Unexpected said: Just for a bit of balance, my interest only mortgage has been much cheaper than renting. However, I did have a decent deposit so was able to get a low interest deal on an amount somewhat less than the price of the house. Its not something I'd fancy doing if I had a 95% LTV, or didn't think my wage would be enough to eventually pay off the debt. IO can work for some people, but when its used to reduce the monthly payments to just under the applicants maximum affordability, then maybe that applicant cant affors to buy the property. Throw in HTB/shared ownership and a bit of self cert and its going to be carnage for some. Quote Link to comment Share on other sites More sharing options...
Gigantic Purple Slug Posted July 21, 2017 Share Posted July 21, 2017 Don't see this as a huge issue tbh. They will do what they always do which is kick the problem into the long grass. People who have no plan will just be shoved onto repayment mortgages and will be forced into paying mortgages for the rest of their lives. Once they die the properties will be repoed by the bank. Quote Link to comment Share on other sites More sharing options...
Society of fools Posted July 21, 2017 Share Posted July 21, 2017 8 minutes ago, Monkey said: Some think that because its a mortgage that the principal is being paid, they only understood the monthly payments. Yes, there are people this thick out there. I've never had a mortgage, but I've seen what popped up my wife's laptop screen when she had an investment property 10 years ago and was logged into her bank site. It clearly stated the $$$ amount left outstanding on her mortgage. Surely every IO debtor, no matter how thick they possibly were, would log into their bank account occasionally and notice over time that their mortgage was not decreasing, just staying the same, in spite of ongoing monthly payments ?? If they really were that thick then they shouldn't be allowed to procreate. Quote Link to comment Share on other sites More sharing options...
dpg50000 Posted July 21, 2017 Share Posted July 21, 2017 If any of these people get a bailout, I will quit work and live very frugally off my savings. thus depriving the treasury of lots of future tax. Quote Link to comment Share on other sites More sharing options...
Society of fools Posted July 21, 2017 Share Posted July 21, 2017 4 minutes ago, dpg50000 said: If any of these people get a bailout, I will quit work and live very frugally off my savings. thus depriving the treasury of lots of future tax. This kind of sentiment is often said in jest on this site, but its actually a very real feeling. I left the United Kingdom in 2011 because I genuinely felt, entirely sincerely, that the British powers that be were deliberately coercing me into a situation where I either had to go up to my eyeballs in debt and get on the London Housing ladder (against every instinct I had) , or, alternatively, I would refuse to do so and would then see myself become poorer in real terms, year over year over year. I refused to play the game: scored a job in the Arabian Gulf and then gleefully and enthusiastically moved every financial asset I had in the UK offshore. My total financial holdings in Britain now add up to more or less the price of a good night in a Soho brothel. Its been 6 years, but I still feel a profound personal satisfaction that I am not having a gun put to my head to play a financial game I manifestly do not believe in and am convinced will lead to much national ruin. Quote Link to comment Share on other sites More sharing options...
winkie Posted July 21, 2017 Share Posted July 21, 2017 Low secured protected rent and saving has to be better than high debt continuous indebtedness, spending and no saving...... Quote Link to comment Share on other sites More sharing options...
JustAnotherProle Posted July 21, 2017 Share Posted July 21, 2017 3 minutes ago, winkie said: Low secured protected rent and saving has to be better than high debt continuous indebtedness, spending and no saving...... It is for the average person but not the banks/government..clearly. Quote Link to comment Share on other sites More sharing options...
scb Posted July 21, 2017 Share Posted July 21, 2017 1 hour ago, spyguy said: 'Linda needs to have a difficult conversation with her son. The expectation was that one day, he would inherit the family home in London where she still lives. But her decision to take out an interest-only mortgage of £182,000 nearly a decade ago has effectively cost him his inheritance ......' Few questions were asked when the 66-year-old part-time school teacher took ....' OK, why is a then 56 yo part time teacher taking out a ~200k loan? You know, 4 years before she was probably planning on retiring. Did she expect to become a fulltimeGS trader in those 4 years? Stupid fcing bint. There's nothing to inherit, just debt. The sickening thing here is how it's assumed you'll be able to leach of mum and dad when they're dead. I've told my parents that if they die with a net positive wealth they've done life wrong as I don't expect a penny. Anything I get will be "nice". That said, what a selfish cow, not thinking of her child and buying a home. Oh the shame! Quote Link to comment Share on other sites More sharing options...
winkie Posted July 21, 2017 Share Posted July 21, 2017 9 minutes ago, JustAnotherProle said: It is for the average person but not the banks/government..clearly. Quite....and you have to ask yourself why? Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted July 21, 2017 Share Posted July 21, 2017 Just in time PPI claims and and a new misselling scandal provides another any to give people money. Quote Link to comment Share on other sites More sharing options...
spyguy Posted July 21, 2017 Share Posted July 21, 2017 Just now, scb said: The sickening thing here is how it's assumed you'll be able to leach of mum and dad when they're dead. I've told my parents that if they die with a net positive wealth they've done life wrong as I don't expect a penny. Anything I get will be "nice". That said, what a selfish cow, not thinking of her child and buying a home. Oh the shame! Good strategy. Lull them into a false sense of safety .. then feed them toadstools and get the house! Quote Link to comment Share on other sites More sharing options...
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