Interest only Morgage ???

suethedriver

We are thinking of getting an interest only mortgage but my question is does the lender force you to have an endowment as well. ?

opinions4u

Most lenders would expect you to have a suitable investment product to repay the mortgage with.

Why do you want interest only?

suethedriver

Int only is a lot cheaper but also we want it as an investment for approx 10yrs so thought it would be ok.
Did read somewhere on here aboout an isa ? instead of endowment is that an option ?

getmore4less

What happens after 10y.

paying off your house is part of retirement planning.

suethedriver

We have a house, this one is for our daughter to live in and we are hoping that as well as helping her in the shirt term , values will go up and we can have a bit of equity out of it.
We have just sold one in another town that we bought for our son but that was repayment and we have equity from that to put as deposit.

opinions4u

suethedriver wrote: »

We have a house, this one is for our daughter to live in and we are hoping that as well as helping her in the shirt term , values will go up and we can have a bit of equity out of it.
We have just sold one in another town that we bought for our son but that was repayment and we have equity from that to put as deposit.

Why will values go up?

I'm not saying they won't, I don't know. But why do you think they will?

Thrugelmir

suethedriver wrote: »

We are thinking of getting an interest only mortgage but my question is does the lender force you to have an endowment as well. ?

Interest only mortgages are increasingly harder to find. As lenders are now wanting to know how the capital is to be repaid.

A straight repayment mortgage makes far more sense than an endowment policy to repay the capital.

An interest only mortgage would leave you exposed to higher interest rates. As they are only going to head one way at some point in the future.

confused31_2

opinions4u wrote: »

Why will values go up?

I'm not saying they won't, I don't know. But why do you think they will?

house prices will always go up they may have gone down in the last year or so, but eventually they will rise again, if you look at the history of house prices they have always gone up, they have had peeks and lows, but they always go higher.

Ive currently got a interest only mortgage, im not planning on stopping where i am and when my next mortgage deal finishes hopefully i will be able to sell, pay the mortgage off, and have a little left over from the equity.

dmg24

confused31 wrote: »

house prices will always go up

confused31 wrote: »

they may have gone down in the last year or so

Big old contradiction there. Very concerning to hear a mortgage advisor talking such ill informed nonsense.

beecher

dmg24 wrote: »

Big old contradiction there. Very concerning to hear a mortgage advisor talking such ill informed nonsense.

Read his sig again - it says 'I am not a Mortgage Adviser'

Thrugelmir

confused31 wrote: »

house prices will always go up they may have gone down in the last year or so, but eventually they will rise again, if you look at the history of house prices they have always gone up, they have had peeks and lows, but they always go higher.

Ive currently got a interest only mortgage, im not planning on stopping where i am and when my next mortgage deal finishes hopefully i will be able to sell, pay the mortgage off, and have a little left over from the equity.

Good luck with your plans.

I'm afraid the credit crunch may have put paid to your house purchase scheme. Recent history is a totally different set of circumstances to prevous eras.