The property boom is well underway now.

SingleSue

Graham_Devon wrote: »

I didn't miss the point.

What if you do not want to sell the house? You are left with no choice. Everything is a gamble, spending your 30 years working to get to the point where you have to sell your home to pay for it.

What if I get to the point where I am selling the larger house, only to find my daughters parner has left her with a kid in tow and she has no where to go, and I have to say to her "oh sorry, I have no space for you in the family home, I have to sell up".

Theres loads of reasons why I may not want to move.

For really to tell me thats a slight difference to owning your home is hysterical.

I haven't got issue with what you have said, it's everyones choice, it's really trying to make out this is merely a slight difference. It's vastly different.

As an extra to your post...

My parents purchased their 3 bedroom semi when it was just two adults, a toddler and a baby on the way (me!), they added another baby just over 6 years later...fast forward 40 years and it is just two adults as we have all left home but they cannot bear to leave the house.

It has space for us to stay, it has room for them to enjoy and they are comfortable....the thought that they would have had to sell up to pay off the mortgage would really have done their heads in and caused untold stress.

Harry_Powell

Graham_Devon wrote: »

I didn't miss the point.

What if you do not want to sell the house? You are left with no choice. Everything is a gamble, spending your 30 years working to get to the point where you have to sell your home to pay for it.

What if I get to the point where I am selling the larger house, only to find my daughters parner has left her with a kid in tow and she has no where to go, and I have to say to her "oh sorry, I have no space for you in the family home, I have to sell up".

Theres loads of reasons why I may not want to move.

For really to tell me thats a slight difference to owning your home is hysterical.

I haven't got issue with what you have said, it's everyones choice, it's really trying to make out this is merely a slight difference. It's vastly different.

I guess it all depends on how large your home is when you reach the housing 'zenith'. The IO strategy still works though as you climb the ladder, but if you feel you've bought a dream house that you would like to live in for good, then there is nothing to stop you buying that home with a repayment mortgage.

As I said earlier, most gain in equity is not from mortgage debt repayment but from HPI. You could gain from HPI with your earlier purchases and then settle into your final home with a repayment mortgage.

nearlynew

Harry_Powell wrote: »

...............The IO strategy still works though as you climb the ladder,

This was one of the lines used to sell me (and many others) an endowment mortgage back in the late 80s.


More importantly, it highlights the racket which is our modern banking system -

The bank creates the "money" from nothing, adds some figures to your account and then you are expected to find some real money to pay interest on the fictitious money that you have "borrowed"

Fantastic isn't it?

Kohoutek

nearlynew wrote: »

Fantastic isn't it?

Works great for bankers and money lenders, works terribly for the productive economy.

Harry_Powell

nearlynew wrote: »

This was one of the lines used to sell me (and many others) an endowment mortgage back in the late 80s.


More importantly, it highlights the racket which is our modern banking system -

The bank creates the "money" from nothing, adds some figures to your account and then you are expected to find some real money to pay interest on the fictitious money that you have "borrowed"

Fantastic isn't it?

We're talking about using IO mortgages to climb the housing ladder faster and then realising those gains by downsizing into retirement.

You're talking about using an alternate repayment vehicle (endowment) to repay a mortgage.

Apples and oranges.

Thrugelmir

Harry_Powell wrote: »

I think you missed the point graham. You don't pay off the 5 bed home at year 25, you don't need the 5 bed home any more because the kids have left home. You downsize and buy a smaller home outright with the HPI gains you made over the 25 years (or 30 or 40 years before retirement).

Trading down , requires someone else to trade up.

What happens when the music stops ?

Harry_Powell

Thrugelmir wrote: »

Trading down , requires someone else to trade up.

What happens when the music stops ?

Has it stopped in the last 1000 years? It might go a little quiet for a year or two, as it did in the last correction, but as we have seen this year, prices soon continue to rise and volume goes right back up.

nearlynew

Harry_Powell wrote: »

We're talking about using IO mortgages to climb the housing ladder faster and then realising those gains by downsizing into retirement.

You're talking about using an alternate repayment vehicle (endowment) to repay a mortgage.

Apples and oranges.

Cheers.
I do know the difference.

My point was about IO mortgages.
And one of the attractions was as you describe.

I only mentioned the endowment because in those days, you had to have a savings vehicle running alongside.

Kohoutek

Harry_Powell wrote: »

Has it stopped in the last 1000 years? It might go a little quiet for a year or two, as it did in the last correction, but as we have seen this year, prices soon continue to rise and volume goes right back up.

What will happens to house prices when the amount of credit banks can lend decreases (which is what will happen according to CML), taxes go up, interest rates go up and unemployment stagnates or increases (taking into account spending cuts)?

Harry_Powell

nearlynew wrote: »

Cheers.
I do know the difference.

My point was about IO mortgages.
And one of the attractions was as you describe.

I only mentioned the endowment because in those days, you had to have a savings vehicle running alongside.

Sorry, but your entire post was about the failure of endowments to pay off interest only mortgages. What we're talking about is to not pay off any part of the mortgage but to use HPI instead - no worries about an investment vehicle if you don't have one in the first place.