got an interest only morgage? Whats your plan?

Pssst

Do you have an interest only mortgage?

If so,do you have a repayment vehicle and if so what is it and how does it work?

If not,whats your plan of action?

Are you hoping your home will increase in value,you can sell,make a profit to finance a better situation?

What about interest only,no repayment vehicle AND negative equity? surely the owrst of all situations?

Wutang_2

Yes, savings

"Are you hoping your home will increase in value,you can sell,make a profit to finance a better situation?" its not a priority

"What about interest only,no repayment vehicle AND negative equity? surely the owrst of all situations?" cancer rates well above all of those.

ILW

National Lottery tickets?

System

I have £108000 mortage, currently at 5.34 fixed until June 6th.

I have around £6000 saved up to clear some capital, but it won't be enough to get me a sensible mortgage. I save about £500 a month.

My plan is to keep saving until I have enough to clear enough capital so that I can remortgage.

I don't think I should overpay until I know I can remortgage because I stand to lose it all if I can't get a decent deal in the next couple of years, so I'll hide the money and pretend it never existed

Dan_1976

When I look back and think about how many people I set interest only mortgages up for and the plan they had was to change it to replayment in a few years or hope house prices continue to rise it scares me! I used to use a document for the client to sign saying they new they were going against my advice etc etc!!

I imagine there will be a few going through it at the mo!

Told em so!!

CPS

Joeskeppi wrote: »

I have £108000 mortage, currently at 5.34 fixed until June 6th.

I have around £6000 saved up to clear some capital, but it won't be enough to get me a sensible mortgage. I save about £500 a month.

My plan is to keep saving until I have enough to clear enough capital so that I can remortgage.

I don't think I should overpay until I know I can remortgage because I stand to lose it all if I can't get a decent deal in the next couple of years, so I'll hide the money and pretend it never existed

Why would you do this? Iam in the same boat and opted to overpay instead of hoarding the cash. Im savings rate was about 0.75%. My mortgage rate was 5.35%. Surely you are using your money better to pay down your mortgage? Doing this will also have the same affect as putting down a lump sum to get a better ltv....?

System

CPS wrote: »

Why would you do this? Iam in the same boat and opted to overpay instead of hoarding the cash. Im savings rate was about 0.75%. My mortgage rate was 5.35%. Surely you are using your money better to pay down your mortgage? Doing this will also have the same affect as putting down a lump sum to get a better ltv....?

I just worry that even if I do dump all my savings into the mortgage and overpay by £500 a month, the interest rates will suddenly rise, Abbey still won't offer me a deal and I'll end up losing my house and all my savings. At least if I hoard my savings until I have enough to remortgage with Abbey can't take it all from me if it all goes tits up (assuming I keep it hidden in a secret place somewhere )

On the other hand clearing the capital gradually saves me something like £4 a month for every £1000 saved.

michaels

Cash ISA - pays a lot more than the interest I pay on the mortgage

Pay_ALARP

We have taken another view which may or may not interest some.

We worked it out that the amount of money we have paid on an interest only mortgage works out at around the same price as if we were renting the property and, as long as we get back our original investment (which we will do) we arn't out of pocket. It is almost like renting from yourself with the added advantage that the property is yours to do what you like with and you keep any profit when you come to sell it.

When we retire we are going to downsize anyway so its worked out well for us.

Wutang_2

Pay_ALARP wrote: »

We have taken another view which may or may not interest some.

We worked it out that the amount of money we have paid on an interest only mortgage works out at around the same price as if we were renting the property and, as long as we get back our original investment (which we will do) we arn't out of pocket. It is almost like renting from yourself with the added advantage that the property is yours to do what you like with and you keep any profit when you come to sell it.

When we retire we are going to downsize anyway so its worked out well for us.

Which is fine as long as you dont get stuck on a high SVR

Dan_1976

Pay_ALARP wrote: »

We have taken another view which may or may not interest some.

We worked it out that the amount of money we have paid on an interest only mortgage works out at around the same price as if we were renting the property and, as long as we get back our original investment (which we will do) we arn't out of pocket. It is almost like renting from yourself with the added advantage that the property is yours to do what you like with and you keep any profit when you come to sell it.

When we retire we are going to downsize anyway so its worked out well for us.

What happens if when the lender says its time to pay up, you cant and the housing market has crashed.

Not something I would do, very risky for lots of reasons. I get the logic and if you were guarenteed to sell the property at the right time and price then fine, but as we know now, things that go up, must come down!