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Realistbear

22% Of Home Movers Forced To Resort To I O Mortgages

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http://thescotsman.scotsman.com/business.cfm?id=1216582006

Interest-only mortgage may get you on the ladder, but there are real dangers
ALISTAIR MCARTHUR
HIGHER mortgage costs and rising house prices have led to an increased awareness of interest-only home loans as a way of getting on the housing ladder. But consumers will face difficulties in the long term if they do not have some way of repaying the loan.
"The endowment mis-selling debacle won't have helped these statistics, but today's reasons for opting for an interest-only product are driven by affordability," says Harris.
But more alarmingly, the statistics for buyers using interest-only loans without a specific repayment vehicle now account for 15 per cent of first-time buyers and
22 per cent of home movers.
While the use of an interest-only mortgage may lower repayments, consumers may find the costs increase dramatically if they change to a capital repayment loan - where both part of the capital outstanding and interest are paid back - at some time in the future. While the repayment costs for a 25-year loan of £150,000 are £625 a month, at an interest rate of 5 per cent, a capital repayment mortgage would be £876.89 - £251.89 a month more.

Another warning for the sheeple who have got to move up :D

When this madness ends the tears are going to flow like rivers. :(

http://www.thisismoney.co.uk/mortgages/mor..._id=58&ct=5

The interest-only timebomb Q&A
Simon Lambert, This is Money
19 August 2006
THE growing number of homeowners hoping future price rises will cover mortgage debts have been warned they are gambling with their future.
An increasing number of first-time buyers struggling to get on the property ladder
and next-time buyers desperate for a bigger home
are taking out interest-only mortgages without any form of repayment vehicle.

:lol::lol::lol::o

Edited by Realistbear

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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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