Lloyds TSB blocks interest only mortgage switch

vigesimal

Gorgeous_George wrote: »

Interest only compares better to renting than to a repayment mortgage.

With interest only:
> Your payments are fixed (or follow mortgage rates if on SVR) - no inflationary increases that rent will attract.
> No Landlord (could be a good thing but you get to pay for repairs etc.)
> Security of tenure (pay the mortgage and you won't be evicted whereas a renter could be evicted for many reasons and at the whim of the LL).

There are people who would prefer an interest only mortgage because they can get better savings rates in cash ISAs or, are expecting a large inheritance or, are guaranteed a golden goodbye from their employer.

GG

Disadvantages
> You take the hit on these falling property prices instead of the ll taking the hit.
>You get the problems of remortgaging a property with negative equity or a high LTV
>If your job moves, you have the problem of finding a buyer for the house.

airhostess

Interest only isn't always a bad option. I bought my property in May 2005 and sold in Oct 2007. If I had gone for repayment I would have been throwing money down the drain each month as only a tiny percentage of what you pay each month goes towards paying off the capital in the early years of a mortgage. So if you aren't intending to keep the same mortgage or stay in the same house for very long, it could save you hundreds if not thousands.

AH

sabretoothtigger

That was nice timing you had there!

Gorgeous_George

vigesimal wrote: »

Disadvantages
> You take the hit on these falling property prices instead of the ll taking the hit.
>You get the problems of remortgaging a property with negative equity or a high LTV
>If your job moves, you have the problem of finding a buyer for the house.

Yes there are disadvantages with interest only when compared to renting but there are disadvantages with whatever you choose.

airhostess seems to think repaying her mortgage would have cost her money. That is nonsense. She should think of the repayment element as a savings account earning tax-free interest at the relevant mortgage rate.

GG

SingleSue

MissMoneypenny wrote: »

If they need more money, then why can't they work on Satrurday or Sundays too? Who told you life was going to be easy?



Parents are responsible for their own childrens wellbeing. It is the parents job to support their children.

Days of easy credit have gone and the some peoples are going to find it a big shock that they have to work extra hours in perhaps jobs they think are beneath them, to support their families. Other parents will just go out and get on with it.

I must admit to finding this view rather simplistic and without empathy to others.

I get on with things but one thing I cannot 'just' get on with is working...I have tried every which way to get work but with 2 disabled children (which obviously we didn't know they were going to be disabled) it is nigh on impossible.

Taking in ironing...hmm, well could be possible apart from the fact that they are both ASD and it would mean me doing it at silly o clock in the few short hours they actually sleep, mind you, god knows when I would then sleep! My own ironing is a very sporadic event, I buy clothes that don't need it!

Doing a paper round - I would spend more time calming the children/running after them when they get stressed because we are going to strange doors.

Bar work - Absolute impossibility, I can't even get out to the pub once a year on a social basis let alone be able to get out a few nights a week to work in one (and if I could, then I could just go back to my old job paying way more than bar work does).

Sometimes, there are very real reasons why a person cannot take on extra work and to just state that it is easy is a rather simplistic view of life.

For the record, I have been applying for all kinds of jobs, most completely out of my normal sector of work. No work is seen as inferior to me but time constraints and impossibility of finding childcare are the biggest problems.

Also, I am of the old school when it comes to finances too, I have no credit cards,loans etc etc, blimey I don't even have a mortgage (yep I don't know why I come here either)...everything is paid for in hard cash and only when it is an essential not a want.

I was also told a few short weeks ago that I was being selfish by looking for work, the reason? I have responsibilities in making sure of my disabled childrens welfare and ensuring I am available at all times to take them on the various different appointments/therapies needed and by working, that would make it difficult!

And I will not be unique, there will be countless families facing the same situation with their children....and they will probably have mortgages which at traumatic times, could well need the option of going interest only.

airhostess

sabretoothtigger wrote: »

That was nice timing you had there!

I know... I was sooo lucky! If it had been after Christmas there would have been no chance... I got the asking price as well!!:D But I did pull out all the stops to sell it, new carpet, painted, decluttered, threw in furniture free etc etc.