Interest Only Mortgage Query

Boozer

megarchie wrote: »

plus, as our house is at present close to £600,000 !

How on earth have you managed to get a house worth this much, with so little knowledge????

I am smiling while i write this, please dont take it to heart, you have done well.

beecher2

I still think it is all made up to be honest.

megarchie

somethingcorporate wrote: »

Either you know what interest only is - you just pay off the interest that the capital is accruing on a daily basis. Or you don't understand what it is and think that your interest only repayments would contribute to the capital owed (which your last point alludes to).

Maybe it's just me but I'm still not convinced you know what you are talking about...:eek:

Exactly! I obviously didn't know what I was talking about otherwise I wouldn't have joined this forum and asked the questions that I have and found many sensible answers from your goodselves.
I can only say it again: For some reason when I sat down to renegotiate the mortgage I was taken aback to find that the previous interest only payments were very much down the drain. O.K. you could well argue then that I didn't at all understand what interest only meant. Fine! In hindsight I should have gone to the building society earlier to arrange paying off the capital but it's always a disappointment saying goodbye to wasted money whether you understand the mortgage or not. At the time, at the outset of the mortgage, the Interst Only mortgage was the only option to acquire this lovely house we now live in. We always knew, whether it should be said or not, that some inheritance would eventually be due which would pay it all off, plus that our salaries were due to increase, plus our three children would eventually leave uni, stand on their own two feet and free up more cash our way.
And if anyone thinks that I am making any of this up then I am sorry if it appears that way. I certainly am not.
I thank you for your views. It has certainly generated a lot of conjecture. When I post/seek any further financial advice on this forum you'll certainly remember the guy who couldn't understand why he'd given away £50,000 ( but at the end of the day it enabled us to live in this house for four years before we started paying off the mortgage!!!!!!!!!.........and for that it was worth it!!!)

picardygirl

Dan_1976 wrote: »

This is good picardygirl, gives you flexibility, although if you are not good with money you are better to change to repayment.

Thanks Dan, we have set our DD up to make the equivalent payment as it would be for a full repayment mortgage plus a little extra each month. I know what you mean though, could be very easy to think i need that extra money this month and just pay the required payment. Need to change lenders next year so am being very disciplined!

Sorry, not trying to hijack thread, just wanted to explain that we on part and part mortgage and paying like a repayment.

Dan_1976

Boozer wrote: »

How on earth have you managed to get a house worth this much, with so little knowledge????

I am smiling while i write this, please dont take it to heart, you have done well.

What has owning a house of that value and knowledge got to do with anything??

kai666

megarchie wrote: »

Exactly! I obviously didn't know what I was talking about otherwise I wouldn't have joined this forum and asked the questions that I have and found many sensible answers from your goodselves.
I can only say it again: For some reason when I sat down to renegotiate the mortgage I was taken aback to find that the previous interest only payments were very much down the drain. O.K. you could well argue then that I didn't at all understand what interest only meant. Fine! In hindsight I should have gone to the building society earlier to arrange paying off the capital but it's always a disappointment saying goodbye to wasted money whether you understand the mortgage or not. At the time, at the outset of the mortgage, the Interst Only mortgage was the only option to acquire this lovely house we now live in. We always knew, whether it should be said or not, that some inheritance would eventually be due which would pay it all off, plus that our salaries were due to increase, plus our three children would eventually leave uni, stand on their own two feet and free up more cash our way.
And if anyone thinks that I am making any of this up then I am sorry if it appears that way. I certainly am not.
I thank you for your views. It has certainly generated a lot of conjecture. When I post/seek any further financial advice on this forum you'll certainly remember the guy who couldn't understand why he'd given away £50,000 ( but at the end of the day it enabled us to live in this house for four years before we started paying off the mortgage!!!!!!!!!.........and for that it was worth it!!!)

But you haven't given away £50,000. You would have paid it what ever type of mortgage you had. It's the INTEREST on the money you borrowed. It's just in an IO mortgage thats all you pay each month-the interest, with a capital repayment mortgage it's all bundled into one monthly payment with the capital. Surely you don't think with a capital repayment mortgage everything goes towards paying of the amount you originaly borrowed?

Either way you you would have what you call given away £50,000

Boozer

Dan_1976 wrote: »

What has owning a house of that value and knowledge got to do with anything??

All i was saying is that i am surprised that they have managed to get themselves into such a good position with a nice of this value, without previously having a mortgage and understanding how it works, but i do not know the OPs situation.

Just surprising to me

megarchie

Boozer wrote: »

All i was saying is that i am surprised that they have managed to get themselves into such a good position with a nice of this value, without previously having a mortgage and understanding how it works, but i do not know the OPs situation.

Just surprising to me

Boozer, we did have a 25 yr Repayment mortgage previously, on our old house, which we paid off after 20yrs

Dan_1976

Working in FS for 10 years I wondered about all sorts of people and how the do so well!

sandsy

I do like a happy ending where the OP sees the light

And for the record, we have a part-repayment, part-IO mortgage.
Our mortgage is for x+y.
x is repayment.
y is IO.