Interest only mortgages

kenshaz

seven-day-weekend wrote:

I thought it may be something like that!

But it still doesn't negate my point that within a few months you can sell your BTL, thereby releasing the capital, which the poster who wrote about Tenants from Hell seemed to doubt.

Release the increased capital,no one these days talks about negative equity,property has enabled those who have been prepared to speculate .

regularsaver1

This man had problems getting the court order in the first place.

I know a colleague who can't get a court order as her tenant has done the sypathy vote and said she has no where else to go so the court order for eviction will not be granted, and she needs to sell.

Like you said, you know its easy,. but I'm sure its not always the case.

BTL's are so different to residential anyhow, You put down bigger deposit in most cases, and your rent should cover mortgage. also liable for any repairs, where as at home if can be left and left lol

lightspeed

As a recent buyer, i was faced with a choice:

1) Continue to live at home with parents and wait for the crash, just like i have done for the past 3 years.

2) Rent and fritter away money on a home i will NEVER own nor be able to have complete freedom to do as i please with my stop gap home

3) Buy a home on a repayment mortgage in which i would be content, but living in a home that i didnt really want but made do with (i.e. too small, wrong area etc...)

finally...

4) Take out an IO mortgage for a home which i want (i.e. in a desirbale area, front and back gardens, off road parking, 3 beds etc...)

I chose option 4, why?

I am 25y/o in a stable and secure profession where my salary will only continue to increase. I am just as much as a home owner as the guy next door who has an similar size repayment mortgage (technically neither of us own our homes until the loan is fully repaid). I had a decent sized deposit and i am very astute financially.

In theory i could wait until i am 30 (5 years away), pay £260 per month into a bog standard (4.25%) savings account for 25 years (so i will be 55y/o) and still have more than enough money saved to repay my mortgage.

The funny thing is that i could afford that £260pm now if i so choose (i havent because my house needs mass updating therefore the extra cash created by the IO mortgage is coming in handy), furthermore, when i am 30 (excluding the unpredictable things that life can throw at you) i will be earning considerablly more than i am now and be in a far better position to save £260+ pm.

IO mortgages are a good thing if the borrower understands them and they are managed correctly.

Every situation and individual is different - it would be boring if we were all the same!