People in thier 60's being forced to sell homes.

roddydogs

RenovationMan wrote: »

So your mortgage term ends when you are 80?

Was it an IO mortgage?

Which mortgage provider are you with?

Yes
No
Woolwich

RenovationMan

roddydogs wrote: »

Yes
No
Woolwich

Out of interest, when you took out your mortgage in 1998 at age 55 did the bank ask how you would finance the mortgage beyond 2008 when you reached state retirement age?

As you would have held the mortgage longer as a pensioner than as a worker (i.e. 10 years as a worker to age 65 and 15 years as a pensioner to age 80), did you have to show pension projections, etc. to show that you could still afford the repayments with reduced income as a pensioner?

silvercar

roddydogs wrote: »

"like everyone else's? so how did I get a 25yr Mortgage at 55? (and ive still got it)

Is your wife 30 years younger than you?

There are a number of scenarios when this shouldn't the an issue, for example if a large inheritance is still to come.

roddydogs

RenovationMan wrote: »

Out of interest, when you took out your mortgage in 1998 at age 55 did the bank ask how you would finance the mortgage beyond 2008 when you reached state retirement age?

As you would have held the mortgage longer as a pensioner than as a worker (i.e. 10 years as a worker to age 65 and 15 years as a pensioner to age 80), did you have to show pension projections, etc. to show that you could still afford the repayments with reduced income as a pensioner?

No to both..........I had to re mortgage quickly due to divorce and wanted to stay in the House, and to pay her the share of equity. I used a mortgage broker in an estate agent and paid brokers fee of £100.

RenovationMan

silvercar wrote: »

Is your wife 30 years younger than you?

There are a number of scenarios when this shouldn't the an issue, for example if a large inheritance is still to come.

Or a large payout from the 25% tax free lump sum that you can withdraw from a pension plan. I know at least one person on here who is planning to do this to pay off his mortgage.

It's pretty tax efficient TBH, because if you had a substantial pension and decide to take the lump sum you then have the problem of how to shield this tax free lump sum from the tax man once it's in an investment product or savings account.

For example, my own private pension 'pot' is projected to reach about £300k, so the 25% lump sum would amount to £75k. If I tried to 'drip-feed' this into an ISA it would take about 7 years for an S&S ISA and 15 years for a cash ISA.

If, on the other hand I reduce my overpayments so that I have a shortfall of £75k at the end of my mortgage, and instead put the overpayments into ISAs now, when I retire I'd pay off the mortgage with the lump sum and have the lump sum equivalent (£75k) already safe and sound in a tax haven.

I'm still pondering this scenario to see what the flaws could be, but it basically seems sound.

chewmylegoff

silvercar wrote: »

The courts judge on what is right, not whether this sets a precedent and what effect this may or may not have on others.

If millions of people are able to stay in their homes by paying the full interest on their mortgage, I haven't a problem with that.

As to your last point, the banks are already screwed and lending has been siezing up, don't you read the newspapers?

You might, as a home owner, have a problem with it in a few years' time when you realise that 10% of available capital has effectively been removed from the mortgage market, and as a result you can't sell your house.

RenovationMan

chewmylegoff wrote: »

You might, as a home owner, have a problem with it in a few years' time when you realise that 10% of available capital has effectively been removed from the mortgage market, and as a result you can't sell your house.

Can you elaborate on this, I don't grasp what you're trying to say.

Are you saying that in order to lend to one person, the banks first have to have the capital from someone else who is paying the capital off their house using a lump sum?

For example:

Ted wants to borrow £100k to buy his FTB house. Bill is about to retire and has a £100k IO mortgage. Halifax Bank cannot lend Ted his £100k until Bill gets his skates on and repays the outstanding £100k on his mortgage.

Is that what you're saying?

chewmylegoff

Yes. As my post a couple of pages back points out in more detail, of all IO mortgages are allowed to just roll, then there is 10% less capital for banks to lend as new mortgages. The system relies on the capital being recycled.

A knock on effect of that is that the housing market would become more illiquid.

RenovationMan

chewmylegoff wrote: »

Yes. As my post a couple of pages back points out in more detail, of all IO mortgages are allowed to just roll, then there is 10% less capital for banks to lend as new mortgages. The system relies on the capital being recycled.

A knock on effect of that is that the housing market would become more illiquid.

Does it? I thought the majority of money was just created rather than being recirculated, hence why net debt is larger than net savings within the banks.

silvercar

chewmylegoff wrote: »

Yes. As my post a couple of pages back points out in more detail, of all IO mortgages are allowed to just roll, then there is 10% less capital for banks to lend as new mortgages. The system relies on the capital being recycled.

A knock on effect of that is that the housing market would become more illiquid.

You're assuming that the money available for mortgages is a fixed pot, which just isn't true.

Banks lend money they haven't got.