The property boom is well underway now.

nembot

I know very few who've overpaid, even with these low interest rates saving them hundreds per month.

But as Graham mentioned, there is only one real reason to go for an IO mortgage and there's no denying that.

Part of the problem you see, too many couldn't afford to buy the proper way.

HammerSmashedFace

Conrad wrote: »

This is not some wind up thread, merely my observation that the next boom is well underway having it's origins in spring 2009.

I've been fairly quiet since mid 2007 and prior to that on this very forum urged people to sell thier B2Ls. I've been in business since 97 so have a fair feel for the market.

Business in 2010 thus far is back to levels I last saw in early 07. People are bored of recessionary talk - not my sentiment - thiers, and I am told again and again they simply pay the media no heed and are just getting on with life.

They don't trust pensions, and long term they plan to downsize at retirment and release Tax free main resi accumulation.

No one ever mentions public deficts or unemployment and most are aware borrowing is very cheap - for example 85% 3.99% or 75% 1.99%. Will it remian cheap - very doubtful but the body public dont let this concern them AFTERALL LESS THAN 1% WERE REPOSSESSED IN THE EARLY NINETIES WHEN RATES WERE HIGHER.

Parental assistance now plays a major role for buyers of all ages in my first hand experience, quite often where parents have released some of the 'free' equity they happen to have accumulated and which is not particularly missed.

Sure lending is still very tight but people are simply borrowing from other sources such as bosses and relatives.

To remain property bearish now is frankly shortsighted.

:A

Read Conrad's signature, says it all really, pure VI desperation. Come back in 12 months mate when the illusion created by borrowing and printing vast sums of money will feel like a lifetime ago.

Being bullish about property now is frankly short-sighted, 2000-2007's property market was built on sand, all they have done is sure it up with more sand. No more to say really, if people fail to see the blindingly obvious fundamentals in front of us, there is little argument or debate to be had.

Emy1501

Conrad wrote: »

I do not give advice - my service is 'information only' (as per FSA service level options) so the clients make thier own decisions.

99% of mortgagees do NOT get repossessed - can someone let all the dailywail readers in on this

Do you not have a duty regarding TCF? Your comments regarding the 73 year old does not seem to take it into account. I'm not sure you are following FSA guideline.

Really2

Graham_Devon wrote: »

Is this how IO has really been used though?

It's usually been used because those buying simply cannot afford the equivalent repayment each month.

Really, all offset are IO as standard and it is up to you if you set up repayment or manage it yourself.

I pay the equiverlent of 6% at the moment which means I am vastly overpaying without punishment.
This can then be used pay down or investment in the future.

Personally i think many who use IO use it becasue they can manage their mortgage their selves.

But would you actualy get leant more on IO than repayments? the affordability criteria would be the same as a repayment system is meant to be in place and accounted for.

Emy1501

Really2 wrote: »

Really, all offset are IO as standard and it is up to you if you set up repayment or manage it yourself.

I pay the equiverlent of 6% at the moment which means I am vastly overpaying without punishment.
This can then be used pay down or investment in the future.

Personally i think many who use IO use it becasue they can manage their mortgage their selves.

But would you actualy get leant more on IO than repayments? the affordability criteria would be the same as a repayment system is meant to be in place and accounted for.

http://www.metro.co.uk/news/42853-interest-only-mortgages

I doubt many people even know what an offset mortgage is. Everyone I konw who has a IO mortgage has one because they could not afford a repayment mortgage. Their plan is to get one when they earn more money.

Graham_Devon

Really2 wrote: »

Really, all offset are IO as standard and it is up to you if you set up repayment or manage it yourself.

I pay the equiverlent of 6% at the moment which means I am vastly overpaying without punishment.
This can then be used pay down or investment in the future.

Personally i think many who use IO use it becasue they can manage their mortgage their selves.

But would you actualy get leant more on IO than repayments? the affordability criteria would be the same as a repayment system is meant to be in place and accounted for.

I'd expect you to be different Really.

Are you suggesting that the normal use for a IO mortgage over the last decade has been by switched on financial wizz's working out how to manage their own mortgages with overpayments etc?

Are you really suggesting this?

I did use the word "usually" in my sentence. That in general means that most of the time it's been used because people cannot afford any other way. It does not mean I am talking about every single person.

treliac

My view is that most of the population are not at all genned up on personal finances and, especially given the encouragement to take on more and more debt in recent years, will have taken IO for exactly the reason that they could buy more for less short term cost.

There's a lot of ostriching going on out there, I'm sure, and lots of s**t still to hit the fan.



(Sorry, carolt, to bung this to the top again, but it's really a derailing!)


....

Thrugelmir

Really2 wrote: »

Really, all offset are IO as standard and it is up to you if you set up repayment or manage it yourself.

Mine isn't and I didn't get the option of interest only back in 2007. A repayment vehicle was a necessity.

Majority of higher risk interest only lending was through the lenders who are no more (or at least had their wings severely clipped since).

Interest only mortgages will be a millstone for many. As they find expected increases in disposable income fails to materialise.

Kohoutek

treliac wrote: »

My view is that most of the population are not at all genned up on personal finances and, especially given the encouragement to take on more and more debt in recent years, will have taken IO for exactly the reason that they could buy more for less short term cost.

I'm astonished how few people can grasp the concept that house prices can only continue to rise if people take on larger and larger mortgages to finance house acquisitions.

Eventually all bubbles burst, all ponzi schemes fail etc...

HAMISH_MCTAVISH

Harry_Powell wrote: »

Exactly.

Whether the bears like it or not, over the 40 years of home ownership property will increase. Those of us who are young now and only just getting on the ladder might look back and sigh at the huge gains made by the previous generation, but surely at the start of their housing journey the previous generation looked back at the one before and sighed?

So true.

People always think "this is it, house prices can never go higher".

In fact, many people were saying that in 2007, and already we have some areas where prices have crossed their previous peak.

In just 20 years time, 2007 prices will look ridiculously cheap, and a new generation of bears will be complaining and moaning about how easy the youth of today had it.