Interest only Mortgages - chelsea or Santander (repayment vehicle)

anoriginalusername

Credit-Crunched wrote: »

the massive flaws in your 'advice'

As above, I am not advising anything.

without a level 4 diploma in financial planning am FSA licence and a suitability report I would be careful what you recommend.

As above, I am not recommending anything.

Credit-Crunched

"A Key Facts illustration showing the projected worth of a stocks and shares ISA at the end of your mortgage term. This means that they will accept it if you walk into a bank today, say you'll pay in £500 a month, get the appropriate illustration, then close the plan.

what part of the above sentence does not constitute advice?

Please refer to font in bold and re think your previous statements!

Wh05apk

This is getting silly!

Suggest everyone backs down!

There is nothing wrong with I/O in the right situation, possibly for the OP now looking to remortgage, possibly after a change in circumstances, as it would appear they now have youg child(ren), they wish to keep commitments as low as possible till child care costs reduce, at this stage we have no indication of income etc, it may be they get a relatively low basic, so just surviving monthly, but a large bonus's which they use to make lump sum repayments?

In an ideal world, we would all have repayment mortgages, but these do not suit everyone, sometimes I/O are more approriate, with regards downsizing as the OP currently has nearly £300,000 of equity, it is a possibility if they do nothing else (albeit, they may have to move areas for somewhere cheaper)

With regards the comment about an ISA, perhaps a little silly, and unnecessary, but I think the point was that it was really just for the lenders compliance, ultimately anyone doing that, would have to take the consequences of their actions, when the time comes to repay the mortgage and they have nothing to use.

noh

Credit-Crunched wrote: »

"A Key Facts illustration showing the projected worth of a stocks and shares ISA at the end of your mortgage term. This means that they will accept it if you walk into a bank today, say you'll pay in £500 a month, get the appropriate illustration, then close the plan.

what part of the above sentence does not constitute advice?

Please refer to font in bold and re think your previous statements!

It's plain to see none of the above is advice or a recommendation. It is simply a statatement of fact.

anoriginalusername

Although I think it was clear to begin with, I have edited my post to include a disclaimer and make it explicit that I am not advising anything in particular, and just illustrating the reality of these repayment vehicles when it comes to a bank assessing you for an IO mortgage.

kingstreet

Wh05apk wrote: »

This is getting silly!

Suggest everyone backs down!

There is nothing wrong with I/O in the right situation, possibly for the OP now looking to remortgage, possibly after a change in circumstances, as it would appear they now have youg child(ren), they wish to keep commitments as low as possible till child care costs reduce, at this stage we have no indication of income etc, it may be they get a relatively low basic, so just surviving monthly, but a large bonus's which they use to make lump sum repayments?

In an ideal world, we would all have repayment mortgages, but these do not suit everyone, sometimes I/O are more approriate, with regards downsizing as the OP currently has nearly £300,000 of equity, it is a possibility if they do nothing else (albeit, they may have to move areas for somewhere cheaper)

With regards the comment about an ISA, perhaps a little silly, and unnecessary, but I think the point was that it was really just for the lenders compliance, ultimately anyone doing that, would have to take the consequences of their actions, when the time comes to repay the mortgage and they have nothing to use.

Who do you think you are, a mortgage broker? Coming on here making reasonable, well thought-out suggestions that don't agree with the current perceived wisdom. Next thing, you'll be telling us self-cert had a place and Northern Rock's Together was just a poor, misunderstood little mortgage...

PeppaP

Thanks for your replies - they have been very helpful

We're aware and we will make provisions for capital repayment but our issue is very high childcare costs for the next 2 years and we'd prefer to be on an i.o short term until we have this extra cash available. Extending the term is not really an option as my husband is 40 now and will be at retirement age in 25 years. The mortgage is tied for 2 years and in practise we always re-mortgage at the end of the tied period.

For now, we just need to know the lenders criteria for i.o so that we can get the mortgage approved. Its really good to know that we can quote downsizing as an option.

Tjrw1985

As a worker in this industry with one of the names mentioned, I can say that our current policy is not to lend a full i/only mortgage without an appropriate repayment vehicle in place.

Sign of the times I'm afraid.

Thrugelmir

PeppaP wrote: »

We're aware and we will make provisions for capital repayment but our issue is very high childcare costs for the next 2 years and we'd prefer to be on an i.o short term until we have this extra cash available.

Maybe you need to draw up a detailed budget and adjust it accordingly. Deferring until tomorrow is the easy option. That merely compounds the problem.

shortchanged_2

Credit-Crunched wrote: »

"A Key Facts illustration showing the projected worth of a stocks and shares ISA at the end of your mortgage term. This means that they will accept it if you walk into a bank today, say you'll pay in £500 a month, get the appropriate illustration, then close the plan.

what part of the above sentence does not constitute advice?

Please refer to font in bold and re think your previous statements!

Personally I would say that is tantamount to fraud, whether or not it is legal.

It is a deceptive way of getting an IO mortgage.