Friday, Sep 04, 2015

Banks forgot to explain that loans have to be repaid.

BBC: Mortgages: Nearly one million 'face difficulties'

Another feature on interest only mortgages with new figures.
As I have said before at least these people have the certainty that they will never pay off their mortgage,
unlike endowment holders who might have a shortfall (a colleague has just retired, two weeks after his
endowment did pay up enough).
Oh well I expect these people all have excellent pensions so they can happily pay the interest into their nineties :-)

Posted by tenyearstogetmymoneyback @ 07:50 PM (6007 views)
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20 Comments

1. i remember the 90`s said...

These home renters (they may realise it)have had years to sort it out .We had an endowment short fall over 15 years ago but had changed to offset and got the mortgage debt down before this its not rocket science why do people keep their heads in the sand.

Saturday, September 5, 2015 08:54AM Report Comment
 

2. cyril said...

I quite like the idea of these lifetime mortgages where you give back the house when you die. It's just like renting a house but there's no landlord. Only problem (as pointed out above) is that you have to keep paying the mortgage (or rent) when you're retired. But the payments will become more affordable over time with inflation so it could work out nicely for some people.
On the subject of endowment mortgages I had a letter from the building society the other day saying that mine has performed better than expected. Wow. Makes a change from the normal 'red alert' stuff they keep sending.

Saturday, September 5, 2015 10:12AM Report Comment
 

3. britishblue said...

I nnow a number of buy to letters, who buy a property, then remortgage it to the hilt and buy another property and so on. They have a chain of properties with very high interest only mortgages and would be under water if interest rates went up 2 or 3% or property values dropped. Technically, I am told they shouldn't be claiming mortgage interest relief on the remortgages, but everyone I have spoken to has.

Saturday, September 5, 2015 12:08PM Report Comment
 

4. cornishman said...

"Banks forgot to explain that loans have to be repaid"

I hope they didn't, else they will probably be instructed to 'compensate' the feckless in some way. It will be yet another way of kicking the can further down the road and keeping the bubble inflated.

Saturday, September 5, 2015 03:21PM Report Comment
 

5. tenyearstogetmymoneyback said...

Cornishman - quite a few comments along those lines in the BBC comments but not much sympathy. You can just imagine it; cold calls "Did you ever take out a mortgage - You could be eligible for compensation - You don't even need to remember the name of the bank.".

My guess is that if banks did forget to tell people the likes of Northern Rock were the most likely culprits. I can assure people that by 2011
when I took out a Natwest mortgage the advisor spent two hours writing an essay explaining how it would be paid off before I will be 65.

I like the username "I Remember the 90s". The ten years mine refers to were 1989 (bought for 65K) and 1999 (sold for 70K).. In 1995 the best offer I got was 48K.

Finally isn't it quiet on here (says the person who last posted months ago). I can remember someone said years ago that when everyone forgets about the possibility of HPC will be when it will happen

Sunday, September 6, 2015 06:43AM Report Comment
 

6. tenyearstogetmymoneyback said...

Cornishman - quite a few comments along those lines in the BBC comments but not much sympathy. You can just imagine it; cold calls "Did you ever take out a mortgage - You could be eligible for compensation - You don't even need to remember the name of the bank.".

My guess is that if banks did forget to tell people the likes of Northern Rock were the most likely culprits. I can assure people that by 2011
when I took out a Natwest mortgage the advisor spent two hours writing an essay explaining how it would be paid off before I will be 65.

I like the username "I Remember the 90s". The ten years mine refers to were 1989 (bought for 65K) and 1999 (sold for 70K).. In 1995 the best offer I got was 48K.

Finally isn't it quiet on here (says the person who last posted months ago). I can remember someone said years ago that when everyone forgets about the possibility of HPC will be when it will happen

Sunday, September 6, 2015 06:43AM Report Comment
 

7. This comment has been removed as it was found to be in breach of our Blog Policies.

 

8. mister ed said...

@7
He's talking purely about interest-only mortgages. Read the post properly before spewing your ideologically-driven piffle.

Still, nice to see you back after that drubbing you got in the other threads for the speculative rubbish you were posting. Same old tricks, eh, Libby. Once you can't answer a rational arguement just wait a few days, lick your wounds, and come back on another thread.

I think it's time you posted something in more detail about commuters using those steam trains to get to work in London. That was a wonderful idea, and should be examined further.

Sunday, September 6, 2015 08:30PM Report Comment
 

9. cornishman said...

tenyearstogetmymoneyback - the fact that your cold call scenario could so easily happen is quite depressing.

We bought in 1988. Sold at a loss a couple of years later. Libertas obviously doesn't remember the 90s.

Monday, September 7, 2015 07:10AM Report Comment
 

10. mark said...

this might explain why there is so much property coming onto the market near me and why sellers are reluctant to drop prices they need to recoup their debt

this is going to end bad, the can was kicked down the road and the pig had a bucket load of lipstick splashed all over it

Monday, September 7, 2015 08:38AM Report Comment
 

11. i remember the 90`s said...

Yes the 90`s were tough what with interest rates going up almost monthly ,houseprices dropping and families left with negative equity hoping they would keep their jobs or they were toast ,there were benefits but nothing like today .I know of a few that went through the trap door losing their house and left with a debt .

Monday, September 7, 2015 08:56AM Report Comment
 

12. Mat104 said...

I don't understand why there is so much concern for those with interest free mortgages having to giving up their homes after arriving at an arrangement they should have understood - all living incurs a cost.

I'll bet their mortgage costs are a lot lower than those members of generation rent currently renting who can be thrown out of their homes at ANY time.

Monday, September 7, 2015 08:59AM Report Comment
 

13. judgandury said...

@5 I've had a few interest only mortgages from the late 90s to quite recently. Every one of the lenders has explained all the repayment scenarios in boring detail.

@10 Surely all the recent news has been about a lack of houses coming onto the market? I'm trying to sell and buy another house and it is frustrating waiting for anything worthwhile to come on

@8 To my mind, about a third of what libertas says makes some sense. That's not too bad by on-line standards! Hope you don't mind a bit of advice from a stranger but by putting all your focus on another poster you run the risk of forgetting why you signed up. I've only been coming here for a while but I can't remember you making a post that is not about libertas.

Monday, September 7, 2015 11:03AM Report Comment
 

14. icarus said...

@12 ( re @8) - mister ed as a (s)talking horse?

Monday, September 7, 2015 12:33PM Report Comment
 

15. This comment has been removed as it was found to be in breach of our Blog Policies.

 

16. judgandury said...

Are you braying that he's talking out of his ass?

Monday, September 7, 2015 01:03PM Report Comment
 

17. mister ed said...

@12
Dont mind advice at all. :-)

To be honest, I come on here every day or two as a bit of a distraction from my usual humdrum existence.

Libby is hilarious, and I do take a fair bit of pleasure in pointing out the huge inconsistencies and downright falsehoods in his posts. And his more speculative rants are comic genius (even though he doesnt know it).

The only advice I can honestly offer about the housing market is that the decision as to whether a person should buy or not depends on their personal situation: how much money they have for a deposit, whether they think their job is safe, whether they have children and can afford to buy in a place with decent schools, what their long-term plans are and whether they even see themselves staying in the UK.

That said, Id be wary about buying at the moment, and waiting a year or three probably wont do any harm. Apart from that, I really dont have much to say.

@13
Nice one. I like that.

@14
I like that too. :-)

Monday, September 7, 2015 02:19PM Report Comment
 

18. tenyearstogetmymoneyback said...

A bit more activity here now.

Just to clear things up for Libertas.

I bought a property in 2011 after two bad experiences with landlords (see my input to the Government Enquiry into the Private Rental Market for details). Natwest reduced the mortgage term on the application form to be absolutely sure it would be paid off before I'm 65. Consequently 94 percent of my monthly payment goes to paying off the capital. A big contrast to 1986 when less than 10 percent was going into an endowment.

Monday, September 7, 2015 07:59PM Report Comment
 

19. cornishman said...

"Consequently 94 percent of my monthly payment goes to paying off the capital. A big contrast to 1986 when less than 10 percent was going into an endowment."

That really sums up why house prices can't continue to rise much more than they have for ordinary working folk. At 300,000, the repayments alone amount to 1,000/month - every month - for the next 25 years. Any interest payments on top.

And I can't see how the present system can continue, as it is, for the next 25 years.

Tuesday, September 8, 2015 11:43AM Report Comment
 

20. mark said...

I notice companies are starting to hike prices to make way for financing higher min living wages, so giveth with one hand and taketh away with other hand

7.40 for fish and chips from a chipshop I am shocked

3.50 for a small cappuccino at a local pub

Supermarkets are lifting prices again too, pack sizes are creeping down

Tuesday, September 8, 2015 12:55PM Report Comment
 

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