75yr old couple with IO mtg

[iamnumerate]

1 hour ago, NuBrit said:

Why is this even a story? People who are trying to make out that the bank acted improperly are talking out of their asses. I've taken out two mortgages in my lifetime. On both occasions, the terms and conditions were laid out very clearly, stating that a mortgage had to be repaid by the time I reached the age of 75. If you ask me, Santander have showed remarkable forbearance to this couple (if anything, probably too much) by giving them 10 years to get their act together. It sounds like the couple in question have only now acknowledged the problem, and made no attempt to come up with a solution. The notion that the bank should extend the interest only term is just ludicrous. 

If they have £80k equity, then why can't they just sell up and down-size? I found a 1 bedroom flat in a retirement development in their town asking for exactly £80k. It would be perfect for them, they would have no mortgage payment at all, which means that the 2x state pensions they are getting should provide a reasonable retirement (although as an accountant, surely he has a private pension of some sort too?).

+1

 

[darkmarket]

33 minutes ago, Nabby81 said:

I'd assume that the change in law meaning the the £200 month from the government now being a loan means Santader know that in the event of their deaths the government will be taking back that loan , in effect if they live another 10 years they are going to owe the Gov 24k to come out sale of the house .

It's quite a significant change that went largely unreported. There's a paper on the transition from benefit to loan containing the following:

Quote

At 21st March 2018, the SMI caseload was 90,000 cases.

It's not clear whether caseload cases equal total claimants.

Quote

Main stories

• At 21st March DWP has sent a letter about the new SMI loans scheme and attempted a follow up telephone call to 95% of SMI claimants
• Over half (51%) of claimants at 21st March who communicated their intention to the Department in a follow up telephone conversation have said they will decline the offer of an SMI loan. One quarter (25%) are undecided. Just under one quarter (24%) indicated that they will accept the loan.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/694017/ad-hoc-statistics-release-conversion-of-support-for-mortgage-interest.pdf

If banks or owners are forced into sales in other similar situations, this would be a nice boost to supply.

Edited May 3, 2018 by darkmarket

[happyguy]

6 hours ago, dropbear said:

This is the fate that awaits most millenials. Two lifetimes of work and nothing to show for it. 

 

Sad but true

5 hours ago, inbruges said:

Looking at the 76 year old bloke you just know he was the golf playing member type who probably bragged about what his house was for years and how clever he was,

No you do not just know that at all 

[crashmonitor]

1 hour ago, Nabby81 said:

I'd assume that the change in law meaning the the £200 month from the government now being a loan means Santader know that in the event of their deaths the government will be taking back that loan , in effect if they live another 10 years they are going to owe the Gov 24k to come out sale of the house .

 

Government probably hoping that Santandar take the chance and underwrite this couples future potential loss. Even if the Government, presumably as priority creditor, get nothing of their £200 per month subsidy it is money well spent.  Better than having to socially house them. With refurbs at 100k a unit down there apparently, let alone being as scarce as hen's teeth best keep them in the manner they have become accustomed.

Can't see that 80k lasting long in the private rented sector with their track record.

Edited May 3, 2018 by crashmonitor

[winkie]

Am sure the lenders are happy to go along with people paying interest only as long as values are rising.....they make no or less money from those that are reducing their debt or have no debt because they have repaid in full, are debt free, unencumbered......after all they own the property, and any falls the owner/mortgage payer loses first, they the lenders are the last to lose......keeping people indebted is their livelihood...... don't want your savings a liability, prefer your indebtedness for life.

[Gigantic Purple Slug]

2 hours ago, crashmonitor said:

Government probably hoping that Santandar take the chance and underwrite this couples future potential loss. Even if the Government, presumably as priority creditor, get nothing of their £200 per month subsidy it is money well spent.  Better than having to socially house them. With refurbs at 100k a unit down there apparently, let alone being as scarce as hen's teeth best keep them in the manner they have become accustomed.

Can't see that 80k lasting long in the private rented sector with their track record.

Ah priority creditor, that was the phase I was looking for.

Thing is, I would have thought that the government potentially getting dibs on part of the equity in the future is further going to erode the banks position and that might tip the balance.

Edit : Trying to figure out the calc average life expectancy of 13 years for a 75 year old seems amazing.

I guess the real problem comes if one person dies and the government support increases.

Edit : https://www.telegraph.co.uk/financial-services/retirement-solutions/equity-release-service/support-for-mortgage-interest/

Validated the calc against this link. Approx 35K (13 years, 200 per month 2.6%).

Edited May 3, 2018 by Gigantic Purple Slug

[crashmonitor]

1 hour ago, monkey100 said:

They will have to sell up and rent with the 80k or buy a studio flat All these people who suddenly didn't 'know' what interest only was Come on, how come we all know? 

Buy for 80k...Burnley, Harlepool ? There from Eastbourne with the posh sounding name Fitzgerald for God's sake.

[Si1]

57 minutes ago, happyguy said:

Sad but true

No you do not just know that at all 

No you do, because he's moaning like a clueless fool now it's gone pear shaped.

[Pitchfork]

I was shocked when I read this story.

And then when you read that they remortgaged £40k (IIRC) for windows and a downstairs toilet? Really on a little house like that? They implied they were getting the house ready for their retirement years. I reckon either they got ripped off with the windows or there was a holiday or new car in there somewhere.

And then you read about the £200 handout they get each month from the taxpayer.....

[longgone]

2 hours ago, happyguy said:

 

No you do not just know that at all 

He`s a boomer They were programmed from birth to repeat the same automated response. 

if you check around the back he will have a little pull cord to wind the speaking part up. 

[dougless]

34 minutes ago, fru-gal said:

They are so old that they could have bought a house in the 1960s or 1970s for a few thousand pounds and have had decades of HPI = 1000% uplift in their equity but even that is not enough, they basically ******ed up and instead of realising that they are in the same boat as loads of much poorer younger people (who will have worked much harder than them with much fewer opportunities) and much better off than renters, they go whining to the press, wanting even more chances of free money. No sympathy!

I understand your post fru-gal and share your frustration at this situation.  What is interesting is that your post shows a degree of anger, quite justified in my opinion, and you are one of our more measured posters.  There is a growing awareness/anger in this country about various issues but often housing is at the core of many of them.  I will be watching the exit polls later - lets hope the Tories get a good 'metaphorical' kicking.

[Gigantic Purple Slug]

49 minutes ago, fru-gal said:

They are so old that they could have bought a house in the 1960s or 1970s for a few thousand pounds and have had decades of HPI = 1000% uplift in their equity but even that is not enough, they basically ******ed up and instead of realising that they are in the same boat as loads of much poorer younger people (who will have worked much harder than them with much fewer opportunities) and much better off than renters, they go whining to the press, wanting even more chances of free money. No sympathy!

Thing is with all of these stories there is nearly always some hidden information or detail that you're not quite getting.For example, I have no clue how much a new bathroom/toilet and windows actually costs.

There are some people in life that get a pretty shitty deal and deserve sympathy. But there are also a lot of others that don't.

[Ah-so]

21 minutes ago, Gigantic Purple Slug said:

Thing is with all of these stories there is nearly always some hidden information or detail that you're not quite getting.For example, I have no clue how much a new bathroom/toilet and windows actually costs.

There are some people in life that get a pretty shitty deal and deserve sympathy. But there are also a lot of others that don't.

For £40k you should be able to get a reasonable extension. For what they got they are either fibbing or were totally ripped off.

As for missing information, they miss the killer question: when you took out the loan how were you expecting to pay back the principal? As often with DM spin stories you have to read between the lines and work out the details to get through the pro-elderly spin.

Edited May 3, 2018 by Ah-so

[dropbear]

A mate in London recently had a quote for new double glazed sash windows on a standard 4 bed terrace house. £15k. 

[Bugger BTL]

He's just slightly too old to be a boomer, but the bit about the golf is blatantly true, let's be honest.

I don't think they're stupid though. I think they've been very clever, actually. There's no way he didn't know what he was doing, and he knows now. My worry is that they're going to get away with it.

[Bland Unsight]

7 minutes ago, Bugger BTL said:

He's just slightly too old to be a boomer, but the bit about the golf is blatantly true, let's be honest.

I don't think they're stupid though. I think they've been very clever, actually. There's no way he didn't know what he was doing, and he knows now. My worry is that they're going to get away with it.

He's born in about 1942. Leading edge of the first peak of the two-peak UK baby boom.

[Bugger BTL]

I thought boomers started late 45?

[Guest]

4 hours ago, happyguy said:

Sad but true

No you do not just know that at all 

I always wonder why you Landlord trolls bother trolling sites like this, if life is so peachy and wonderful why are you not just getting on with it?

Scared of something are we

[Bland Unsight]

10 minutes ago, Bugger BTL said:

I thought boomers started late 45?

If you want the start of the boom then you can't really reference the date of the first of the two peaks? Willetts, who literally wrote the book on boomers, is with you though, dating the UK baby boom as roughly 1945 to 1965.

Setting aside the details I reckon this bloke's devotion to the idea that his house owes him a living means he ought to be considered an honorary boomer, even if he isn't quite a boomer on the dates.

Edited May 3, 2018 by Beary McBearface

[crashmonitor]

16 minutes ago, Beary McBearface said:

If you want the start of the boom then you can't really reference the date of the first of the two peaks? Willetts, who literally wrote the book on boomers, is with you though, dating the UK baby boom as roughly 1945 to 1965.

Setting aside the details I reckon this bloke's devotion to the idea that his house owes him a living means he ought to be considered an honorary boomer, even if he isn't quite a boomer on the dates.

Official Cambridge dictionary definition too for UK, 1945 to 1965. Oxford not specified. US 1947 to 1961.

 

[ebull]

3 hours ago, Gigantic Purple Slug said:

Ah priority creditor, that was the phase I was looking for.

Thing is, I would have thought that the government potentially getting dibs on part of the equity in the future is further going to erode the banks position and that might tip the balance.

Edit : Trying to figure out the calc average life expectancy of 13 years for a 75 year old seems amazing.

I guess the real problem comes if one person dies and the government support increases.

Edit : https://www.telegraph.co.uk/financial-services/retirement-solutions/equity-release-service/support-for-mortgage-interest/

Validated the calc against this link. Approx 35K (13 years, 200 per month 2.6%).

I would be very surprised if they have anything like dibs or at least first dibs.

Insolvency sales will give up to 100% to whoever has first charge and then 100% to second charge until nothing is left for the last charges on the house. SMI loans will be joining the end of the queue as charge no NNN at the time the loan is started.

It doesn't confirm or contradict that explicitly AFAICS but it's a VERY soft loan:

Quote

You’ll need to repay your SMI loan with interest if you sell or transfer ownership of your home.

The interest you pay can go up or down, but the rate will not change more than twice a year. The current rate is 1.5%. You’ll be told if this is going to change.

You will not be asked to sell your home in order to repay your SMI loan.

If there is not enough money from the sale of your home to repay the SMI loan in full, the rest of the loan will be written off and you will not have to repay it.

 

https://www.gov.uk/support-for-mortgage-interest/repaying-your-loan

They'll take a repayment before any equity is paid out but in the event of HPC it's likely this is a loan which will never be repaid.

I also notice they're also still paying a fix 2.6% of principal regardless of what the actual interest to be paid is.

 

[Trump Invective]

Dear government. I have been paying a sh*t load of rent every month for the last 20 years and now I find that I have no stake in the property whatsoever. This seems to me to be outrageously unfair, as I assumed that giving all this money away was going to be worth something at the end of it. What do you intend to do about it?

[Shrink Proof]

3 minutes ago, Trump Invective said:

Dear government. I have been paying a sh*t load of rent every month for the last 20 years and now I find that I have no stake in the property whatsoever. This seems to me to be outrageously unfair, as I assumed that giving all this money away was going to be worth something at the end of it. What do you intend to do about it?

Nothing, you dismal little renter scum. Now get back in your box before we tell your landlord to raise your rent.

 

Oh, by the way, don't forget to vote Conservative.

[Exiled Canadian]

5 hours ago, TonyJ said:

I think they are probably a very wily old couple who thought they could take their story to the papers and get instant sympathy. They were only right about half of that.

Any sign of a "Just Giving" page yet?

[GregBowman]

13 hours ago, dougless said:

I understand your post fru-gal and share your frustration at this situation.  What is interesting is that your post shows a degree of anger, quite justified in my opinion, and you are one of our more measured posters.  There is a growing awareness/anger in this country about various issues but often housing is at the core of many of them.  I will be watching the exit polls later - lets hope the Tories get a good 'metaphorical' kicking.

They didn’t in spite of being the most inept Tory government for decades 

It is why I still believe on the whole the jury system works. Although if the election was a court case it would of been easy to call.

Inept but in many cases well meaning people muddling through a situation they didn’t create or a return to the nasty ( why is that always a term for the right ?) of spite envy and greed with a healthy dose of resurgent anti Semitism. Putting Javid in as Home Secretary was a help probably in London.

Sort of reminds me of what Theresa May when asked what the Tories have done for women and she said apart from make 2 of them Prime Minister ?

In the end people hate spite and envy which generally is the thrust of labour campaigning