intrest only mortgages

somethingcorporate

I wonder whether the son with ooodles of debt is the 6 figure earner!?

Wh05apk

somethingcorporate wrote: »

You've been foolish and whilst you don't like Poppy10s response it is a valid question. What did you do with the 90k?

Why wait until the mortgage is almost due at repayment before thinking about what you are going to do?

If it's a free country then we are entirely in our right to tell you you have treated your house like a cash machine and are now deservedly so paying the price.

Fail to plan; plan to fail.

If you don't like this go and talk to your kids, they'll give you a cuddle rather than an honest opinion.

Apart from giving the OP a good kicking doesn't really help them move forward though does it?

JimmyTheWig

An interest-only mortgage with no means to repay at the end of it should be seen as renting. Rather than paying rent to a landlord you have been paying rent to the bank.
You don't own the property - the bank owns most of it.

Not surprising, then, that you are in a similar situation to someone who has been renting all these years.

The simplest thing would be to sell and rent.

If there is a lot of sentimentality in the house and your son is up for the idea then a single person earning £100k a year could reduce his lifestyle to that of someone earning, say, £30k a year and pay off the mortgage pretty quickly.
Once he'd done that he would be mortgage free on that property and then would have no problems getting a mortgage for himself.

JimmyTheWig

Hold on, a better idea along the same lines might be for you to carry on as you are for a while and your son to start saving like mad (again on the basis of reducing his lifestyle to that of a reasonable earner of his age). Once he's saved up £178,000 he could buy a portion of your house (71%, on current valuation) and you could pay off your mortgage.

The beauty of this plan is that he could still buy a place with his girlfriend (as long as they are looking for a modest place) as he would never have a mortgage on your place.


Look at it this way - he's got 6 years to save up £180k. That's 30k a year. Taking tax into account, that would be like him taking a £50k pay cut, which should be perfectly possible for him to do on £100k+ and still have a high income.

rodenal

JimmyTheWig wrote: »

Hold on, a better idea along the same lines might be for you to carry on as you are for a while and your son to start saving like mad (again on the basis of reducing his lifestyle to that of a reasonable earner of his age). Once he's saved up £178,000 he could buy a portion of your house (71%, on current valuation) and you could pay off your mortgage.

The beauty of this plan is that he could still buy a place with his girlfriend (as long as they are looking for a modest place) as he would never have a mortgage on your place.


Look at it this way - he's got 6 years to save up £180k. That's 30k a year. Taking tax into account, that would be like him taking a £50k pay cut, which should be perfectly possible for him to do on £100k+ and still have a high income.

Well, that could be an option - but seems like a pretty big ask of the son to me? We don't know what his partner earns if anything at all, if they live in London then £30k per year would provide less than a modest living (I would say)

somethingcorporate

Wh05apk wrote: »

Apart from giving the OP a good kicking doesn't really help them move forward though does it?

No you're absolutely right, but I, like yourself, have struggled to come up with a workable way forward aside from selling the property.

They seem to want to blame others (bankers etc) for their own foolishness whereas I wanted to point out they should take responsibility for their own situation that of doubling their IO mortgage without giving any consideration as to how to pay it back!

I am also staggered at their attitude saying they can spend their £90k how they like as it is a free country but then don't comprehend it's a free country to post whatever opinions on their issues we like - they've come to a free forum so have to learn to take the rough with the smooth.

I will try and be more constructive in future, I tend to get really annoyed at stupid people remaining ignorant of their own stupidity.

JimmyTheWig

rodenal wrote: »

Well, that could be an option - but seems like a pretty big ask of the son to me?

Like I say, it depends on the sentimentality of the place.

They need to raise £178k in 6 years.
They can raise about £0 (less, probably, if the past is anything to go by) themselves.
The only solutions would be the son stumping up the cash or selling the house.

We don't know what his partner earns if anything at all, if they live in London then £30k per year would provide less than a modest living (I would say)

My second suggestion took him down to an income of £50k+. I'm sure that's livable on, even in central London.

Would seem like a reasonable investment to me at a time (i.e. before kids come along) when they can afford it.

storeton

to Somethingcorperate What's the difference on the way I spent my money on anyone or anyting
I earned it legally and the last time I looked this was a free country
I could have spent it on medical treatment for a sick relative I could have used to help my children in Private education Icould have spent it on wine woman or song ,or all three, none of your business so butt out

As for leaving it late to do anything about my predicament,yes that stating the bleedin obvios,my only concearn is food on the table , a roof over our heads and clothes on our backs.(that harks bark too the 1930's depression.if you know what that is)If that's been foolish with my money over last11 years then your opinion is worth buggar all
So don't judge me with your narrow minded principles on my lifestyle
saying I am foolish ,simple moaner your nothing more than a negative !!!!!

poppy10_2

storeton wrote: »

to Somethingcorperate What's the difference on the way I spent my money on anyone or anyting
I earned it legally and the last time I looked this was a free country

You didn't earn it. You borrowed it. Now you have to pay it back. It's a free country, but it's not free money.

maryjane01

OP, I know you are only looking for positive input, that is why I read this thread, but to be honest I don't think there is any.

My inlaws are in the same boat as you, but unfortunately they are even older, 65 and 69 I think, and may have even less equity in their property than you. They have been robbing Peter to pay Paul for years, both still work self employed full time. Part of the reason I hate Christmas is that they continue to live in denial and buy presents for everybody like they are buying the gifts with their own money.

One of my FIL's favourite sayings is 'if you worry you die, if you don't worry you die, so why worry' while they pretend they are both really happy to still be working full time and hardly ever see their grandson. I hope for their sake they drop dead of a hart attack or die in a car crash together because if one of them had an accident and couldn't work, or suffered from dementia the pack of cards they have built will tumble very quickly.

You are in a better position than them, you are a bit younger, and on the face of it have a little more equity than them, so you have a few years to try and make some amends.

If you live somewhere where you could rent a modest flat for less than the cost of your mortgage sell up now, if your mortgage is less than local rents stay put. Cut all costs, go to the debt free wannabe board and see how others do it. If you start right now you may be able to save enough for a modest retirement flat.

I am sure you don't want to stuff up your son's future so don't ask him to take out a mortgage for you. Come up with a plan, whereby you do as much as you can on your own, and possibly put it to him you might like his help to gift you some money when you retire so you can buy a basic flat. He could start putting some money aside each month now in an ISA himself, along side saving for a house deposit for himself, so he can help out a bit. But even then don't rely on his help, there are enough years between now and then he could have a kid and his partner could rightly try and convince him his money should be spent on a family home to raise his child rather than bail out his parents.

If you live in a house worth £250,000 with the size mortgage you have, like my inlaws, you are not being realistic about the lifestyle you can afford. Even in London there are properties worth less than £250 a couple could live in. You only NEED a one bed flat, if you are used to a 3 bed house that might be difficult to come to terms with, but please for the sake of your son get real sooner rather than later while you still have the time (Just).