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Debate House Prices
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One million homes face Interest-only remortgage threat
Comments
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sister-in-law is in this position, currently paying about 100 a month on her interest only mortgage, when i asked her whether she was saving the difference to pay towards capital she just laughed and said why?!
If her monthly IO mortgage is just £100, then she is effectively renting for £100 a month in probably a reasonable property. It's quite easy to see her point of view to be honest.0 -
The majority of people who take out IO mortgages do so reduce the monthly payment enough to enable them to afford to move into a house that they otherwise couldn't afford."The problem with quotes on the internet is that you never know whether they are genuine or not" -
Albert Einstein0 -
The majority of people who take out IO mortgages do so reduce the monthly payment enough to enable them to afford to move into a house that they otherwise couldn't afford.
Not necessarily. BTLers, for example, whom either rely on capital appreciation or just want a regular income stream, but want to keep the outgoings down as one would.0 -
amcluesent wrote: »More than one million homeowners on interest-only mortgages face a repayment timebomb when they next come to remortgage.
Interest-only loans are increasingly difficult to find as lenders tighten criteria ahead of a crackdown by the City regulator.
More than a million homeowners with no loan repayment plan were sold interest-only mortgages between 2005 and 2009, according to the FSA.
The regulator is worried these borrowers are sitting on a mortgage time bomb, due to explode between 2024 and 2033, unless they devise a way to repay the capital.
FACT - That's a lorra, lorra peeps with no means to repay the capital while permanent work dries up, businesses close and the public sector lays-off 800,000. Could be some very attractive houses being sold at fire-sale prices soon!
That would imply that house prices are going to head down longterm.0 -
How would they know?amcluesent wrote: »More than a million homeowners with no loan repayment plan were sold interest-only mortgages between 2005 and 2009, according to the FSA.0 -
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That would imply that house prices are going to head down longterm.
We recently re mortgaged on an interest only loan, the bank did ask us how we would pay it back, we simply told them through using our annual ISA savings.
It was easy enough, no questions asked from then on.
I think the likes of the banks will look at your excess income along with how you plan to pay it back.
As for lower prices, I don’t think so, just lower transaction numbers like we are seeing. The banks will lax the criteria when/ if sales reduce to get the turnover.0 -
JimmyTheWig wrote: »How would they know?
Exactly. We have an IO mortgage and no specific 'vehicle' in place. We did of course say 'yes' when asked if we had one because the mortgage was a good deal and saying 'No' would have been really unhelpful I feel....
We simply overpay/offset massively when appropriate - Given we have gone from 80% to approx 45% LTV in approx 2.5 years it's working fine so far.
Think we are on 999,997 now?
Edit - 999,996Go round the green binbags. Turn right at the mouldy George Elliot, forward, forward, and turn left....at the dead badger0 -
amcluesent wrote: »More than a million homeowners with no loan repayment plan were sold interest-only mortgages between 2005 and 2009, according to the FSA.
there are 600,000 properties on Rightmove - i see all three are linkedamcluesent wrote: »FACT - That's a lorra, lorra peeps with no means to repay the capital while permanent work dries up, businesses close and the public sector lays-off 800,000. Could be some very attractive houses being sold at fire-sale prices soon!
<chucky laughs at the nonsense some people post>
do you think they may, just may be out of negative equity in the next 14 to 23 years?amcluesent wrote: »The regulator is worried these borrowers are sitting on a mortgage time bomb, due to explode between 2024 and 2033, unless they devise a way to repay the capital.0 -
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