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Lloyds TSB blocks interest only mortgage switch
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MissMoneypenny wrote: »The mortgage lenders might take a bigger hit if they wait too long to repossess a home.
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if mortgage lenders act too quickly they will take a hit
if they give people some time to find a new job then they won't take a hit at all
whats the problem?0 -
MissMoneypenny wrote: »
That's £46 per week to find. Can't they they just do a weekend job or a couple of paper rounds?
What a glib comment.US housing: it's not a bubble
Moneyweek, December 20050 -
because if a dole dossing teenager came in here asking for advice, i would say get a paper round, get a weekend job. I wouldn't advice someone who is struggling to pay the mortgage to go and get a paper round. The way you have worded it sounds so smug and patronising. "oh can THEY get a paperound" have a word with yourself.MissMoneypenny wrote: »"they" are the example in the op where they have to find another £46 per week to pay their mortgage. How did your mind deduce "dole dossing, teenagers living in a council flat with 3 kids" from that?
Isn't getting a second job for a few hours better than getting into financial difficulties?Debt free. March 2020
Mortgage free-August 2021
Planned retirement date- 19/5/2026
£29500 saved. Target £420000(19/05/2026)0 -
MissMoneypenny wrote: »"Switching from a repayment loan to an interest-only deal, which could save a borrower with a £150,000 loan more than £200 a month, is an option that lenders can offer borrowers who are struggling to meet repayments to try to keep them in their homes."
That's £46 per week to find. Can't they they just do a weekend job or a couple of paper rounds?
In a world where credit is tight, if you haven't got the money then you haven't got the money. We are getting closer to the point where not having the cash in your bank account means you have no purchasing/paying power whatsoever.
Mind you, anyone who is that close to losing their home is unlikely to be saved by switching from repayment to IO mortgage anyway. The real problem is that there are lots and lots of people out there who simply borrowed more than they could comfortably afford to pay back. Without ever-expanding credit and continually rising property prices to bail them out they are quite simply screwed.--
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.0 -
because if a dole dossing teenager came in here asking for advice, i would say get a paper round, get a weekend job. I wouldn't advice someone who is struggling to pay the mortgage to go and get a paper round. The way you have worded it sounds so smug and patronising. "oh can THEY get a paperound" have a word with yourself.
The reference to a paper rounds was to show how easy it would be to make up the mortgage shortfall. I did two jobs while I saved for a deposit for my first house. My second job was 6 evenings and weekends working in a bar. There is nothing wrong with getting a second job (any job you can) to sort out your finances.
Why do you think it is only the "dole dossing teenager" who should get a paper round or a weekend job to raise extra money and not someone struggling with a mortgage?RENTING? Have you checked to see that your landlord has permission from their mortgage lender to rent the property? If not, you could be thrown out with very little notice.
Read the sticky on the House Buying, Renting & Selling board.0 -
Due to my circumstances I had to take on an Interest Only mortgage, this is NOT forever, this is for 2 years till I can get back on my feet. Since taking this out, I have been able to pay off my credit cards so that I now do not have 1 and will not be getting one in the future, my overdraft on my account is reducing substantially and will be nil in about 6 months (when it will be cancelled) and I am also currently paying my parents back money that they have lent me.
I am a single parent with 2 small children and recieve no maintenance. I work full time in the week, therefore working weekends (who will look after the children) or getting a paper round is not an option.
For some people an interest only mortgage can be a short term solution rather than having their house repo'd and large debts that they are unable to pay.
Once the 2 years is up I will be debt free and able to have a repayment mortgage, my intention then is to pay off more each month to make up for the 2 years that I was on an interest only mortgage as I will have no debts and having been used to being on a budget I will be able to do this. I then hope to carry this on, thus paying off my mortgage earlier.
Each to their own as everyones story is different0 -
I can't comment on your situation specifically, I don't have all the information at hand.
Interest only mortgages are a way for people to get themselves in a lot of bother. Let's say you lost your job or even became too ill to work. You can no longer pay the mortgage. House prices haven't risen enough to offset the money still owed, voila, you can't sell the house, you don't have enough equity for a loan, the bank aren't willing to help because you've only ever paid the interest. You're in big trouble.
The point about interest only mortgages is that they are taken out by people that are speculating on the market, who cannot afford the full mortgage.
The principle behind the interest only mortgage is exactly what we as a country need to get away from. People, for example, should not be allowed to only pay off interest on their credit cards.
If someone takes a loan then there needs to be a defined repayment period.
It pains me to think that you are a mortgage adviser and promote interest only mortgages. I do hope you only offer them in very very specific circumstances to people that have an awful lot of money because in my opinion, mortgage 'consultants' that promoted the idea of getting an interest only mortgage when someone couldn't afford a full repayment have a lot to answer for. It's simply not ethical and bad advice in most situations.
I remember my first ever mortgage, I asked about this notion of interest only and my adviser looked at me like I was an idiot. Fortunately he was being paid by my company to advise me and thus had no vested interest. He made the point very well that interest only was a way to get into a lot of trouble.
I do think that the country would be in a much more positive position right now if interest only was illegal. I believe that interest only will be seen the same way as endowments, miss-sold, badly advised and ultimately ending in repossession.
The fact that people in this country think that paying off only the interest on a loan is acceptable explains a lot about the position we are in.
Good post hunter, very articulately put. Just shows how far mindset has shifted over the past 15 years that interest only is seen has the norm. I had a interest only mortgage when I bought my first home in '96 for 37k with Britannia BS, I had to take my endownment policy into the branch where they scrutinised it thoroughly before they accepted my application.
This policy was abandoned by most lenders shortly after this, since then BTL has grown over 35 fold !! and our Great Leader wonders why there were so few homes for FTB'rs.
Unbelievable really that someone with so little common sense/intelligence could rise to the point of being Chancellor then PM, really shocking.0 -
Due to my circumstances I had to take on an Interest Only mortgage, this is NOT forever, this is for 2 years till I can get back on my feet. Since taking this out, I have been able to pay off my credit cards so that I now do not have 1 and will not be getting one in the future, my overdraft on my account is reducing substantially and will be nil in about 6 months (when it will be cancelled) and I am also currently paying my parents back money that they have lent me.
I am a single parent with 2 small children and recieve no maintenance. I work full time in the week, therefore working weekends (who will look after the children) or getting a paper round is not an option.
For some people an interest only mortgage can be a short term solution rather than having their house repo'd and large debts that they are unable to pay.
Once the 2 years is up I will be debt free and able to have a repayment mortgage, my intention then is to pay off more each month to make up for the 2 years that I was on an interest only mortgage as I will have no debts and having been used to being on a budget I will be able to do this. I then hope to carry this on, thus paying off my mortgage earlier.
Each to their own as everyones story is different
That is exactly what my experiance is with people who have interest only mortgages. My only worry from where I see it, and I am talking about 3 friends I know who have interest only mortgage, something always seems to crop up. Didn't get the pay rise they were expecting, one half loses their job, and when it comes to getting a new fixed mortgage, low and behold they talk themselves into another interest free one "just for 2 years though"Debt free. March 2020
Mortgage free-August 2021
Planned retirement date- 19/5/2026
£29500 saved. Target £420000(19/05/2026)0 -
MissMoneypenny wrote: »The reference to a paper rounds was to show how easy it would be to make up the mortgage shortfall. I did two jobs while I saved for a deposit for my first house. My second job was 6 evenings and weekends working in a bar. There is nothing wrong with getting a second job (any job you can) to sort out your finances.
Why do you think it is only the "dole dossing teenager" who should get a paper round to raise extra money and not someone struggling with a mortgage?
I suppose it is how one looks at life. I would think getting that £46 a week for a couple could not be too difficult. Over on DFW board they have the make £10 a day extra - and many people have a great deal of success. Over on the Old Style board there are threads where people have fed themselves on 50p a day, there are people spending very small amounts of money for food. There is the woman who lived on £1 a day - after rent and utilities.
We do not know the personal circumstances of these people, but it would be a rare couple with a mortgage and both working who would find getting £200 a month more impossible.
We are too used to 'easy' living and this must be the tip of the iceberg. There is going to be a return to austerity and we have all got to get used to it.
In the last crash my in laws neighbour's business went belly up. Within a month he was doing gardening and lawn cutting, he emptied slot machines in pubs, he did cleaning - he did anything he could to keep his family going.
There is nothing wrong with doing what you have to do.0 -
kennyboy66 wrote: »What a glib comment.
So you would rather get into debt than do a job that you thought was beneath you?RENTING? Have you checked to see that your landlord has permission from their mortgage lender to rent the property? If not, you could be thrown out with very little notice.
Read the sticky on the House Buying, Renting & Selling board.0
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