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Is your lender coming after your IO mortgage?

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Comments

  • Dan:_4
    Dan:_4 Posts: 3,795 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    Bullfighter wrote: »
    Which is it? An astute investment or a risk?

    Your move.

    An astute investment - everyone knows it.

    Life is a risk. Some people are born to worry, they cant handle the burden of a mortgage, and therefore they will never be homeowners. If only they could see the bigger picture....
  • chucky
    chucky Posts: 15,170 Forumite
    10,000 Posts Combo Breaker
    Bullfighter wrote: »
    Which is it? An astute investment or a risk?

    Your move.
    investing in a property is always a risk - luckily the house always wins
  • Bullfighter
    Bullfighter Posts: 414 Forumite
    Dan: wrote: »
    An astute investment - everyone knows it.

    Life is a risk. Some people are born to worry, they cant handle the burden of a mortgage, and therefore they will never be homeowners. If only they could see the bigger picture....

    millionaire-fail.jpg

    FAIL.
  • Dan:_4
    Dan:_4 Posts: 3,795 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    Hahahahaha - good luck for the future Bullfighter
  • ILW
    ILW Posts: 18,333 Forumite
    Dan: wrote: »
    An astute investment - everyone knows it.

    ....
    #

    Try telling that to some of the "investers" in some of the BTL developments in places like Woolwich.
  • Dan:_4
    Dan:_4 Posts: 3,795 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    edited 3 August 2010 at 10:14AM
    ILW wrote: »
    #

    Try telling that to some of the "investers" in some of the BTL developments in places like Woolwich.

    oh im sorry I thought we were talking about IO residential mortgages...
  • mustrum_ridcully
    mustrum_ridcully Posts: 1,453 Forumite
    edited 3 August 2010 at 10:24AM
    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.

    Yes true. But will they be in a position or willing to sell their home, pay-off the capital and buy somewhere to live if they haven't made proper provisions. You also assume that they are aware that they need to pay-off the capital.

    Their house may well increase in value, but so will every other house.

    Maybe they could get downsize or get a retirement flat, however it's quite reasonable to assume there will a lot of competion for those as the population gets older so the prices could surge. Maybe they'll have to go out and get a mortgage at the age of 50 or 60, when their friends/work mates have just finished with their repayment mortages - I'm sure they won't be happy about this.

    They could move to a cheaper part of the country or buy an ex-council house, that assumes they're willing and in position to able to do this (i.e. they haven't just had to sell their ex-council house in a cheap part of the country). Perhaps they'll move-in with their children, assuming they're kids have enough room or are willing to accomodate them. Yet more things people might be rather unhappy about.

    So irrespective of whether house prices go up, down or stagnate I can foresee IO mortgages being the next endowment 'mis-selling' scandal. I can see the ambulance chaser adverts now "Mis-sold an IO mortage? Then phone... and get the money you're entitled to"
    "One thing that is different, and has changed here, is the self-absorption, not just greed. Everybody is in a hurry now and there is a 'the rules don't apply to me' sort of thing." - Bill Bryson
  • ILW
    ILW Posts: 18,333 Forumite
    Dan: wrote: »
    oh im sorry I thought we were talking about IO residential mortgages...

    Why refer to an investment then?
  • Dan:_4
    Dan:_4 Posts: 3,795 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    ILW wrote: »
    Why refer to an investment then?

    errr its still an investment BTL or not.
  • nearlynew
    nearlynew Posts: 3,800 Forumite
    The majority of people that take out IO mortgages don't do so because they are "financially savvy"


    They do it because it lowers the monthly payment enough to enable them to "buy" (and move into) a house they couldn't otherwise afford.
    "The problem with quotes on the internet is that you never know whether they are genuine or not" -
    Albert Einstein
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