It's time for an Interest Only Mis-selling campaign

mikeb222

OK, I know some folk will say "it was your own decision" but I really believe that Interest Only mortgages are a scam.

We, like a lot of folk, brought our house using interest only because it was the cheapest way and nobody checked that we could pay it back. We were gambling that house prices would continue rising of course, but we still had no way of paying off the capital when end of term came.

This can't be right!
Surely the mortgage company are jointly responsible.

I would like to see a campaign for mis-selling of interest only mortgages similar to the bank charges campaign.
Whats the difference?
I certainly don't see any.

The mortgage company concerned-GE Money-won't even let us swop mortgage types now because we had some arrears, even though they originally said we would be able to. So even this isn't right.

C'mon Martin, start a campaign for us!

getmore4less

mikeb222 wrote: »

OK, I know some folk will say "it was your own decision" but I really believe that Interest Only mortgages are a scam.

We, like a lot of folk, brought our house using interest only because it was the cheapest way and nobody checked that we could pay it back. We were gambling that house prices would continue rising of course, but we still had no way of paying off the capital when end of term came.

This can't be right!
Surely the mortgage company are jointly responsible.

I would like to see a campaign for mis-selling of interest only mortgages similar to the bank charges campaign.
Whats the difference?
I certainly don't see any.

The mortgage company concerned-GE Money-won't even let us swop mortgage types now because we had some arrears, even though they originally said we would be able to. So even this isn't right.

C'mon Martin, start a campaign for us!

So you could not afford the interests only mortgage anyway and now looking to blaim someone else.

dunstonh

OK, I know some folk will say "it was your own decision" but I really believe that Interest Only mortgages are a scam.

I have an interest only mortgage and I dont think its a scam. I'm doing very well out of it. Professional landlords will go interest only. Professional investors using investment backed mortgages will go interest only.

We, like a lot of folk, brought our house using interest only because it was the cheapest way and nobody checked that we could pay it back. We were gambling that house prices would continue rising of course, but we still had no way of paying off the capital when end of term came.

This can't be right!

So you chose to enter into a risk based contract on the basis that you knew you would not be able to pay the capital back. That says just as much about you as it does any lender.

Surely the mortgage company are jointly responsible.

Yes. They have lent money stupidly.

I would like to see a campaign for mis-selling of interest only mortgages similar to the bank charges campaign.
Whats the difference?
I certainly don't see any.

They are not even close to being similar. Bank charges, for a start, will not stop even if the banks lose the court case. They will be revised to a lower level. They are based on people breaking the terms of their current account.

You bought a mortgage. The interest you pay is not a penalty. You knew the costs when you bought the mortgage. You knew it was interest only. The warnings are present on mortgages. You ignored them.

I know what I am typing sounds negative but it appears you are trying to shirk your responsibilities and get a free house out of it.

If you think you cannot afford it and you now realise your error then start to consider selling up and going back to renting (which is effectively what you are doing now but have the potential to at least end up with some capital surplus at the end).

michaels

And at the same time could the govt ban renting as people who rent are not automatically saving money as equity in the property they are living in.

And lottery ticket sales - what a carp investment, putting the same money on an accumulator at a casino offers much better odds.

Oh and I bought a pint of milk at the corner shop last week whereas if I had been sensible I would have bought it for half the price at the supermarket last time I was there - the govt should not allow me to make this stupid mistake again.

poppy10_2

mikeb222 wrote: »

We were gambling that house prices would continue rising of course, but we still had no way of paying off the capital when end of term came.

This can't be right!
Surely the mortgage company are jointly responsible.

Oh, hell no! :mad:

Radiantsoul

Not going to happen I'm afraid. Interest only mortgages are probably less common now as they are risky for the lender too. But everyone knew what could happen with interest only mortgages.

_bankrupted

mikeb222 wrote: »

We were gambling that house prices would continue rising of course, but we still had no way of paying off the capital when end of term came.

So House prices rise, modestly of course otherwise your 2 bed terrace is worth 1.5 million and average earnings are 30k. 25 years come to an end then what do you do? Sell the house, pay off the loan and live in a cardboard box.

Maybe there should be an intelligence test as well as an affordability test for a mortgage.

Hopejack

Oh my, I don't think you'll get anywhere with this one. I'm fairly sure somewhere - if even only in the small print, you would have to have been told that you will have the capital to pay off at the end and therefore need to think about where the money is going to come from to pay it off!!!

Sorry to hear you are in arrears but I don't think you can blame your lender!?!

PS - If we were to start pointing fingers at 'irresponsible' lenders in the past, I don't think there would be any left standing who weren't - they've had their fingers well and truly burnt though and I'm hoping they have learnt from it - not sure though!

Radiantsoul

...And if you can't afford the interest only part how could you afford the capital repayment part?
The problem is that you borrowed too much, and in that it seems that you have only yourself to blame imho.

opinions4u

mikeb222 wrote: »

OK, I know some folk will say "it was your own decision" but I really believe that Interest Only mortgages are a scam.

No. They're a choice that isn't right for many people.

We, like a lot of folk, brought our house using interest only because it was the cheapest way

And you knew exactly why it was cheapest - because you weren't reducing capital.

and nobody checked that we could pay it back

Ah, so you declared an income that was higher than it really was?

We were gambling that house prices would continue rising of course

Despite the fact that the 1990s saw negative equity too. Stupid gamble.

but we still had no way of paying off the capital when end of term came.

Yes you do. Sell up.

Surely the mortgage company are jointly responsible.

Probably. But I don't see that they should be liable for your choice (from a range of options) and the likelihood that you exaggerated your income to get the loan.

I would like to see a campaign for mis-selling of interest only mortgages similar to the bank charges campaign.
Whats the difference?
I certainly don't see any.

A million and one differences that I can't be bothered going in to now. Some of them being points of law.

The mortgage company concerned-GE Money-won't even let us swop mortgage types now because we had some arrears, even though they originally said we would be able to. So even this isn't right.

They don't have any obligation to offer you a range of products. Out of interest, how did you end up in arrears on an interest only mortgage?

C'mon Martin, start a campaign for us!

Come on now. Grow up and take responsibility for your own decisions. You bought a house that was beyond your means with the help of a self-certified mortgage where you've most likely been less than totally honest about your ability to afford the debt.

ManAtHome

Would be interesting if you 'won' - you'd have to cough up to bring the mortgage account to the same balance as a repayment..! (it has more in common with endowment 'mis-selling' than bank chanrges).