Used their home as a cash cow through re-mortgaging.. now in deep do do

homelessskilledworker

http://www.dailymail.co.uk/femail/article-2105011/Stuck-rent-trap-How-middle-class-family-kept-remortgaging-home-pay-bills-longer-afford-repayments.html


These people used their property like a cash cow, how many years did they give an impression of doing well for themselves when they were in fact living a false dream.

My big question for myself in recent times and it is what basically gives me my present stance on property, is how many other people are THE WALKING DEAD, how many are similar to this family.

CLAPTON

strange article

how did the housing crash make the mortgage too expensive?
most mortgages have come down in cost rather than the reverse

SailorSam

I know two people who are similar, one was given their house so had no mortgage the other only a small mortgage 'cos of the help they received. The one who started with no mortgage has now had the house reposesed and living in rented 'council' property, the other is on-the-brink. If interests rates start to rise or one of them falls out of work, even the talked about changes in benefits for children maybe the killer.
Why do people only live-for-today and feel the need to show neighbours how well they are doing.

Graham_Devon

The tales of another interest only mortgage...

Even if they hadn't kept on taking money out if it, the fact they needed to take money out to get by (they say they remortaged for school fees and to keep up with the house maintenance) suggests they would never have been able to afford the buy the house at the end of the mortgage anyway.

RenovationMan

A really interesting article, thanks for posting it. There are a lot of parallels with what our family are doing. We saw a house we fell in love with and went out of our financial comfort zone in order to buy it. We're also spending a lot of money on renovations and have a large IO mortgage. It's certainly food for thought to see what happened to this family and makes me even more determined not to get complacent with our own house purchase.

Analysing the main issues that they had, I'd say that if they didn't MEW in order to fund the renovations and, more importantly, didn't send their kids to private school they would not have been in the mire. You see this quite often where people have to 'have it all' (not only the large house but the flash car to sit in front of it and the kids in private school in order to project that whole 'wealthy middle class' image) and 'have it now' (not willing to do the renovations a bit at a time, but MEWing the money and paying builders to do the work all in one go).

mystic_trev

Kids at Private school...what on earth are they thinking? As for Shona Stupid and her husband Keith Nice but Dim (either that or the blokes had a stroke) they need a loud wake up call!

last year, we couldn’t bury our beloved Labrador in the garden when he died. I’m pretty sure that digging graves for family pets is not permitted in the tenancy agreement.

:rotfl:

RenovationMan

Graham_Devon wrote: »

The tales of another interest only mortgage...

Clearly the problem was living beyond their means and MEWing to try and pay for it. The IO mortgage would not have been an issue because they could have sold their large family home at age 65 and retired to a smaller home bought for cash with all that equity they had built up.

nearlynew

A heart-warming story of greed and stupidity.

wotsthat

Graham_Devon wrote: »

The tales of another interest only mortgage...

The IO bit just draws in the hand wringers - these people would be in the s**t anyway. Why? Because they had an IO mortgage? No; because they are morons.

Sounds like the IO mortgage is the very least of their problems.

wotsthat

homelessskilledworker wrote: »

My big question for myself in recent times and it is what basically gives me my present stance on property, is how many other people are THE WALKING DEAD, how many are similar to this family.

Well given repo's and arrears are pretty low an evidence based assessment would be that this couple are atypical.

Jennifer_Jane

Graham - nothing to do with interest-only per se, although I can see how stupid, unthinking people could get lured into not repaying it.

But, you know you have a debt (not 'you', Graham), so why, having found your dream home, wouldn't you do anything to protect it - by paying down the debt as and when you can, and saving up aggressively for an early mortgage finalisation.

Took me 9 years to pay off my house from 2000 to 2009, repaying the allowed 10% every year amongst other things. Could never have afforded this house without having an interest-only mortgage, and didn't do anything to the house in the first few years.

These people are just part of the 'Got to have it now' generation, and perhaps this down-turn will make our society less 'Because I'm worth it', and all the stronger for it.