options to accompany interest only mortgages

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foot_loose
foot_loose Posts: 66 Forumite
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I am looking to remortgage from a repayment to a interest only mortgage. What options have I got to put to the bank to satisfy them giving me this mortgage, other than an endownment?

If an endownment is the only option, what is the best one?

Comments

  • payless
    payless Posts: 6,957 Forumite
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    You need to look at your reasons why you want an interest only- and then if suitable tailor around what fits in best
    Any posts on here are for information and discussion purposes only and shouldn't be seen as (financial) advice.
  • foot_loose
    foot_loose Posts: 66 Forumite
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    I need to finance a secon property
  • dunstonh
    dunstonh Posts: 116,428 Forumite
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    and why do an interest only mortgage?

    endowment, ISA, OEIC/UT, IT, Pension or nothing at all are valid. However, an investment backed interest only mortgage would almost certainly be more expensive than a repayment mortgage and isnt worth the risk.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • foot_loose
    foot_loose Posts: 66 Forumite
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    so is one saying i can just apply for an interest only mortgage without an investment?
  • dunstonh
    dunstonh Posts: 116,428 Forumite
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    Yes.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • cloud_dog
    cloud_dog Posts: 6,052 Forumite
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    I prefer an interest only mortgage as it gives me greater flexibility in deciding how to finance the mortgage. For example during the late 90's (up to tech bubble pop) I repayed only the interest and invested an amount in stocks / shares in order to repay the mortgage. During the last four years I have continued to invest but have reduced the amounts being invested and the remainder is now being 'over-paid' into the mortgage to reduce the capital.

    I'm not advising this strategy as it is far more risky than just a repayment (to be safe have a repayment mortgage) but it is the flexibility I like.

    cloud_dog
    Personal Responsibility - Sad but True :D

    Sometimes.... I am like a dog with a bone
  • foot_loose
    foot_loose Posts: 66 Forumite
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    Ok, when the bank ask how am I going to repay at the end of the term, if I don't want any backing investment, what would one suggest 2 say? Please.
  • cloud_dog
    cloud_dog Posts: 6,052 Forumite
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    Ok, when the bank ask how am I going to repay at the end of the term, if I don't want any backing investment, what would one suggest 2 say? Please.

    You've only go two options, lie or tell the truth. If you want the mortgage then the provider will want to know you are making / have provisions to repay the loan.

    On all the interest only mortgages I've applied for they haven't asked me for specific investment details, i.e. what, where, how much, they've just wanted to know that I was planning on making investments, etc.

    cloud_dog
    Personal Responsibility - Sad but True :D

    Sometimes.... I am like a dog with a bone
  • foot_loose
    foot_loose Posts: 66 Forumite
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    cheers, m8
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