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Brittania Panic And Scrap I O Charges

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http://www.moneyextra.com/news/news-britan...aps-022548.html

Britannia scraps charges

Britannia Building Society has scrapped charges and overhauled its communication practices for customers holding interest only mortgages in a bid to highlight solutions to this potential time bomb.
Following a pilot programme the Society has launched plans to contact every interest only mortgage customer to encourage them to take control of their debt. Customers not acting and waiting until the end of their mortgage term will find themselves with a large loan that needs repaying immediately, or may face having their home repossessed.
Warnings about setting up appropriate payment vehicles for interest only mortgages were previously incorporated into annual mortgage statements - but feedback from members showed that these were overlooked.

What, insolvency rates go them spooked? This is such a joke and a model of fiscal stupidity on a massive scale. HPI-MEW depends on IO loans or the HPC follows. Remember, IO loans were introduced for one reason and one reason only: sheeple can't pay today's prices with normal financing.

Not long now. :lol:

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LOL... this is insane. 'Look, you know all that money we lent you: do you realise you have to pay it back, right?'

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LOL... this is insane. 'Look, you know all that money we lent you: do you realise you have to pay it back, right?'

:lol:

It is completely insane. What charges have they scrapped then?

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I was offered the proverbial

100% IO self cert mortgage..

Bargain... :)

What goes through peoples minds when the accept this..?

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I was offered the proverbial

100% IO self cert mortgage..

Bargain... :)

What goes through peoples minds when the accept this..?

My friend just took a IO mortgage on a flat for BTL. The Local Authority is going to rent it off him and the rent just covers the repayments. So that a yield of about 2% on the IO repayments! F*(*(#ng idiot wouldn't listen to a word I said, just quoting stats about the shortages in housing.

What went through his head is £5K deposit. Flat will rise about 8% in a year, so he will make £8K from his £5K investment in 1 year!

That is one scary position to be in!

Edited by AwaitingFairPrices

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I wonder if they are still giving out IO loans to new customers. If not, this could precipitate a huge shift in sentiment.

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My friend just took a IO mortgage on a flat for BTL. The Local Authority is going to rent it off him and the rent just covers the repayments. So that a yield of about 2% on the IO repayments! F*(*(#ng idiot wouldn't listen to a word I said, just quoting stats about the shortages in housing.

What went through his head is £5K deposit. Flat will rise about 8% in a year, so he will make £8K from his £5K investment in 1 year!

That is one scary position to be in!

It makes me laugh how you use the word "repayments". As it is a IO mortgage, they are not repayments at all!

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It makes me laugh how you use the word "repayments". As it is a IO mortgage, they are not repayments at all!

They are the repayments he will need to make each month to the Bank. My whole post is specifically about an IO mortgage.

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Maybe some boffin thought "Damn. These muppets honestly believe that they won't have to repay the loan". Then all of a sudden it dawned on the Bankers - Perhaps they may lose the lot when a majority of their loans fall through at the same time.

:rolleyes::lol:

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Guest Bart of Darkness

Not made it as news on their own site

http://www.britannia.co.uk/news/news_releases/index.html

Be fair though, it's a news heavy day on the front page.

7 July 2006

Pupils bury their own chest of treasures

Youngsters at a Leek school are creating their own piece of history by burying a time capsule at Britannia’s Customer Service Centre... read full article

13 July 2006

Scouting group gets new furniture

Jumble sales and craft fairs will be spruced up at an Exeter scouting group thanks to Britannia Building Society... read full article

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It makes me laugh how you use the word "repayments". As it is a IO mortgage, they are not repayments at all!

People seem to do that all the time though. Even the press talk about "repayments" on an IO mortgage - really annoys me as it gives people the impression that they're actaully paying something back. You're quite right - they're not repaying anything - they're not paying any of the actual debt off - they're just paying the charges of taking on the debt. They should be called "interest payments" or "upthebum payments" if you ask me. ;)

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People seem to do that all the time though. Even the press talk about "repayments" on an IO mortgage - really annoys me as it gives people the impression that they're actaully paying something back. You're quite right - they're not repaying anything - they're not paying any of the actual debt off - they're just paying the charges of taking on the debt. They should be called "interest payments" or "upthebum payments" if you ask me. ;)

Rent. :)

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He probably thinks "I am a man of straw, the most I can lose is £5,000, if they come after me, I've got nothing else. Whereas, on the upside I can get a £100k in a decade."

This is where most of our "savings" are invested, with Gamblers Anonymous.

(He's wrong of course - morality aside. If it all goes pear-shaped, they'll chase him for life. He'll always have everything he ever achieves taken off him when they find out about it. He'll forever be a man of straw. All for a silly punt.)

Totally agree and by taking out a BTL mortage he is of course in effect advising lender that he has "other investments", so yes the debt recovery unit will have more to go after.

I tried to get a thread going recently where I put forward the idea that as the amount of your equity reduces as you gear up then surely the rate of return you expect must also incease to reflect this risk of these frightening gearing losses. I think very few BTL investors factor this into their calculations, bear in mind that in many cases the euity was borrowed from their main residence so they are very highly geared. :(

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What goes through peoples minds when the accept this..?

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;););)

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Guest Bart of Darkness

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;););)

So, reading between the lines....

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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