FTB - Mortgage repayment declaration help

Wickedkitten

fogma wrote: »

because the equity that has been paid off the mortgage can help towards a deposit on the next property along with 75% of any profit made on the property.

What equity will they have built up with prices are falling and in the first 5 years or more of a mortgage you are mainly paying off interest?

sneakyg

fogma wrote: »

the 25 year loan is interest free for the first five years

then it is 1.75% for 5 - 10 years

then 3.75% for 10-25 years

I don't see it as unreasonable to expect yourself to be on a higher wage, hopefully with some help from someone else to pay the mortgage

and if the worse comes to the worse, you would have to sell the house

exactly.

some people come on these forums to wind other up and make divvy jokes. most people on these forums are happy to share their knowledge and help others.

Wickedkitten

sneakyg wrote: »

exactly.

some people come on these forums to wind other up and make divvy jokes. most people on these forums are happy to share their knowledge and help others.

I don't think people are here as a wind up, people are genuinely wondering why do you not actually know how you will pay it off before you even take it out.

Especially considering that a mortgage is the biggest debt that you will ever take on in your life.


You might want to check this thread actually.

http://forums.moneysavingexpert.com/showthread.html?t=1517829

bob79

I think this is a rather interesting scheme.

*Contrary to other 'affordable housing' schemes you can buy whatever property you like. So nothing negative there.
*You are tied to the co-operative bank, so you can't shop around for a mortgage, but the co-op isn't that bad.
*The interest paid on this loan is LOW (much lower than on a long term fixed mortgage).
*You don't need a deposit (I think that's a negative, but for many people it will be a godsend).
*The lender takes part of the risk of the house price fluctuations (you may consider this to be positive or negative....).

I don't see the fact that the loan is interest only as too much of a problem. You could pay off the loan at the end of the term by taking out a repayment mortgage. That in effect is no different than taking out a (longer) repayment mortgage originally for the entire amount.

The sums depend on house price increases, but due to the low interest rate on the loan and the low interest rate on the mortgage due to the artificially low LTV, I think this scheme may very well work out to be cheaper than getting a high LTV mortgage.

Of course the sad thing is that this scheme is government backed, so I as a taxpayer pay for that.....

QTPie

Wickedkitten wrote: »

What equity will they have built up with prices are falling and in the first 5 years or more of a mortgage you are mainly paying off interest?

Agreed, as I ranted before... it just seems "irresponsible" to allow someone to borrow money when they don't have the means to repay the loan... (saying "well i will probably get a better job and meet a rich partner in the future" just doesn't count... Should I buy a ferrari now because I will doubtlessly win the lottery in the next five years?).

In this whole "credit cruch" situation, you just have to ask "do people ever learn"? No, they are still looking to live well beyond their means...

QT

QTPie

bob79 wrote: »

Of course the sad thing is that this scheme is government backed, so I as a taxpayer pay for that.....

Of course, more "bad debt" to be written off by the "good" taxpayers... :rolleyes:

QT

silvercar

We took an interest only mortgage in 2006 and were asked on the application how we intended to repay the loan. We wrote that we had endowments maturing in years x, y and Z and for the rest of it would be using excess income and lump sum bonuses.

The lender didn't even ask how much the endowments were for.

I can only guess that the low LTV meant they weren't bothered as a sale should well cover the loan.

sneakyg

QTPie wrote: »

Agreed, as I ranted before... it just seems "irresponsible" to allow someone to borrow money when they don't have the means to repay the loan... (saying "well i will probably get a better job and meet a rich partner in the future" just doesn't count... Should I buy a ferrari now because I will doubtlessly win the lottery in the next five years?).

In this whole "credit cruch" situation, you just have to ask "do people ever learn"? No, they are still looking to live well beyond their means...

QT

QT if i had the choice id pay it off cash. but i dont.