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Couple Resort To 40-year Loan

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Major breaking news / financial analysis from the FT.

If any other couples with imparied credit and large outstanding loans are looking for a lender and reasons to get on the ladder before it is too late the FT kindly provides some details.

May God have mercy on your souls, expect none if the bailiffs call first. :lol:

http://www.ft.com/cms/s/698b0d10-10a5-11dc...000e2511c8.html

Couple resort to 40-year loan

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Major breaking news / financial analysis from the FT.

If any other couples with imparied credit and large outstanding loans are looking for a lender and reasons to get on the ladder before it is too late the FT kindly provides some details.

May God have mercy on your souls, expect none if the bailiffs call first. :lol:

http://www.ft.com/cms/s/698b0d10-10a5-11dc...000e2511c8.html

Couple resort to 40-year loan

Dear God!

Tell me it's not interest only.

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Dear God!

Tell me it's not interest only.

I'm just wondering what mindset you must have to be a journalist and start researching and writing a piece like that?

One that opens their letters in the morning? :ph34r:

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Maybe a follow up article in a few years time ?

Actually I think you could write the follow up article now.

Edited by Ash4781

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Now for the maths part.

Assuming 7% IR and repayment mortgage, they simply reduce the monthly payments by just £100 for paying over 40 years rather than 25!!!!! In essence, they are paying an extra £100,000 back.

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These are the type of people that I will have absolutely no sympathy for in the impending crash.

FKING TW@TS!! :angry:

Blemished credit history, Sounds like they have been in financial difficulty before.

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Dear God!

Tell me it's not interest only.

Just a quick question; what difference would it make if it was a 5 year or 500 year interest only?

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wow!

the couple have debts of 18k! 2 children! and then got a 100% mortgage- if the mortgage company had any sense -they would have turned them down. Personally I think they are taking a hell of a lot on- the 124k mortgage wouldn't be too bad if both people had fulltime average earning jobs-but to have 2 young children and an additional 18k worth of debt will make things very tough indeed for them.

The couple also said they are paying double what they paid in rent!!! if IR do go up.........

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Just a quick question; what difference would it make if it was a 5 year or 500 year interest only?

if they had a 500 yr interest only mortgage wouldnt they be paying extra interest for a hell of a long time compared to a 5yr mortgage?

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wow!

the couple have debts of 18k! 2 children! and then got a 100% mortgage- if the mortgage company had any sense -they would have turned them down. Personally I think they are taking a hell of a lot on- the 124k mortgage wouldn't be too bad if both people had fulltime average earning jobs-but to have 2 young children and an additional 18k worth of debt will make things very tough indeed for them.

The couple also said they are paying double what they paid in rent!!! if IR do go up.........

Suspect the £18k debt is expensive short term debt, credit/store cards etc..

A "modest" 6% rise in house prices and they can MEW away the credit cards in a year or sell the property ... in theory.

Paul

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numpties

Mr Pettinger, who works for O2, said: "House prices always seem to be going up. We felt it was now or never. I didn't want to get to 35 still not owning a house as it may then have been too late."

Not when they come down!

Mr Pettinger, who works for O2, said: "House prices always seem to be going up. We felt it was now or never. I didn't want to get to 35 still not owning a house as it may then have been too late

Err no mate, you don't own it, the bank does!!!

Mr Pettinger. "The mortgage payments are still double what we were paying in rent."

Like I said, numpties!!!

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if they had a 500 yr interest only mortgage wouldnt they be paying extra interest for a hell of a long time compared to a 5yr mortgage?

Only if they were Ferenghis who live for ever

and who ever called them tw@ts up there^....bang on mate!

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The couple have been unable to save up for a cash deposit as any extra income has been spent on their two young children

"The mortgage payments are still double what we were paying in rent."

So how the f*ck does that work then? If they cant save any deposit money....... how in f*cks name can the pay out double the rent?

Someones full of sh!t

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Just a quick question; what difference would it make if it was a 5 year or 500 year interest only?

If you pay interest only, you pay it forever, until you pay the original mortgage and any MEW back, I wonder what percentage in the future will ever get to hold the deeds of their property in their hands?

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to be honest its just a means for them to get onto the property ladder.

theres nothing stopping them changing the mortgage or ending the mortgage after a couple of years should they choose to sell.

the house theyre buying is a small terrace so the 40 year mortagage may strangely enough be a short term strategy.

as their circumstances change e.g higher wages, property price rises, or if they move home, they can likely end the mortgage at any time.

Edited by mfp123

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The couple have been unable to save up for a cash deposit as any extra income has been spent on their two young children

"The mortgage payments are still double what we were paying in rent."

So how the f*ck does that work then? If they cant save any deposit money....... how in f*cks name can the pay out double the rent?

Someones full of sh!t

Very contradictary, well spotted.

So by all accounts, its the kids that will suffer now for the parents obsession to be 'properdee owners'.

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to be honest its just a means for them to get onto the property ladder.

theres nothing stopping them changing the mortgage or ending the mortgage after a couple of years should they choose to sell.

the house theyre buying is a small terrace so the 40 year mortagage may strangely enough be a short term strategy.

as their circumstances change e.g higher wages, property price rises, or if they move home, they can likely end the mortgage at any time.

Don't think so, chances are they'll bounced out of their mortgage at the same time as the bulk of others that are going to experience the same, coincident with a falling jobs market, possibly high inflation and lots of competition for jobs and lots of other sellers.

Working in the mobile phone industry to boot - just the sort of job that can and will be shifted arboad.

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quote 1

The couple have been unable to save up for a cash deposit as any extra income has been spent on their two young children

quote 2

"The mortgage payments are still double what we were paying in rent."

So how the f*ck does that work then? If they cant save any deposit money....... how in f*cks name can the pay out double the rent?

Someones full of sh!t

Nelly, very good point indeed!! Shame can't contact the editor!

Edit: the editor seems to write a lot about property

http://us.ft.com/ftgateway/superpage.ft?cr...name=journalist

Edited by OzzMosiz

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"The couple plan to remortgage their property following the initial three-year fixed-rate period, and hope to transfer to a shorter-term loan at that point."

the 40 year mortgage is just a way for them to buy the property now rather than wait several years.

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as their circumstances change e.g higher wages, property price rises, or if they move home, they can likely end the mortgage at any time.

ah yes, that old chestnut "my/our wages will go up"... if I had a gold sovereign for every time I heard a naive FTB say that, etc.

All these people that seem to think they will consistently buck the trend of low wage inflation, they must be pretty special people. Either that, or wage inflation will rise generally, across the board. What will happen to IRs then, I wonder? :rolleyes:

point being: IRs are to a certain extent, irrelevant. If you overpay for your house - in terms of salary multiples - there's no way of escaping it.

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Now for the maths part.

Assuming 7% IR and repayment mortgage, they simply reduce the monthly payments by just £100 for paying over 40 years rather than 25!!!!! In essence, they are paying an extra £100,000 back.

There is no limit to the depths of stupidity of the British public, the banking industry is forever grateful.

Edited by BuyingBear

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