Is your lender coming after your IO mortgage?

Bullfighter

Spartacus_Mills wrote: »

They could force them to have an investment vehicle tied to the mortgage. My first mortgage was an endowmenr and the policy was tied to it.

Squeaky bum time coming for some

Yep, my first mortgage in the 90's was specifically tied to an endowment, I also had to take out MIG as well, I also seem to remember having to jump through lots of proof of earnings hoops.

My next mortgage in 2006 took 15 mins and the broker was baffled as to why we didn't take up the offer to borrow at 8x our joint earnings... :rotfl:

Bullfighter

julieq wrote: »

SNIP
There's nothing at all wrong with IO mortgages. Worst case you have relative costs decreasing year on year because of general wage inflation and wage inflation from promotion. At the end of the 25 years you have an asset which has increased in value compounding nicely in the opposite direction.
SNIP

Where do you see wage inflation coming from in the next decade?

chucky

Bullfighter wrote: »

Yep, my first mortgage in the 90's was specifically tied to an endowment, I also had to take out MIG as well, I also seem to remember having to jump through lots of proof of earnings hoops.

i did the same thing - it didn't stop me cancelling the endowment a month or two into the mortgage.

chucky

Bullfighter wrote: »

Where do you see wage inflation coming from in the next decade?

pay rises.....

Bullfighter

chucky wrote: »

pay rises.....

So you foresee inflation beating pay rises for Nurses, Civil Servants, and workers in industries serving the public sector? I personally think we are in for wage stagnation (if not drops) in real terms over the next decade - unless we hit massive inflation , but then we are off to the races...

Sure, some of us will always be able to negotiate raises or find better paying jobs, but Mr. & Mrs. Average are usually at the discretion of their employer and therefore the market conditions.

Dan:_4

nearlynew wrote: »

The majority of people that take out IO mortgages don't do so because they are "financially savvy"


They do it because it it lowers the monthly payment enough to enable thm to "buy" (and move into) a house they couldn't otherwise afford.

Correct.

But does this make them financially savvy? Of course it does. In 10 years time they would be sitting on an asset worth more then they paid for. Meanwhile you will still be renting and moaning about high prices.

Grow some balls and take a risk.

Bullfighter

Dan: wrote: »

Correct.

But does this make them financially savvy? Of course it does. In 10 years time they would be sitting on an asset worth more then they paid for. Meanwhile you will still be renting and moaning about high prices.

Grow some balls and take a risk.

Which is it? An astute investment or a risk?

Your move.

ILW

Dan: wrote: »

Correct.

But does this make them financially savvy? Of course it does. In 10 years time they would be sitting on an asset worth more then they paid for. Meanwhile you will still be renting and moaning about high prices.

Grow some balls and take a risk.

It will only be worth more than they paid for it if the house increases in price at a higher rate than the interest they are paying.

chucky

Bullfighter wrote: »

So you foresee inflation beating pay rises for Nurses, Civil Servants, and workers in industries serving the public sector?

no - but that's very different to saying that there will not be any wage inflation.

Bullfighter wrote: »

Where do you see wage inflation coming from in the next decade?

there will be wage inflation - maybe not greater than inflation but there will definetly be wage inflation. 100% guaranteed.

System

Plenty of wage inflation in the private sector, public sector is screwed but hey, it's their turn.