Lender forbearance becoming “a sick joke”

ILW

OK
Try this for size.
Is it a good idea that people should try to cover down periods either through savings or insurance or a mixture of the two?

If you think it is a good idea, what is the best way to encourage people to do it?

If you have a system that says the state will pay for you, but not if you have any savings, what is that saying?

wotsthat

ILW wrote: »

OK
Try this for size.
Is it a good idea that people should try to cover down periods either through savings or insurance or a mixture of the two?

If you think it is a good idea, what is the best way to encourage people to do it?

If you have a system that says the state will pay for you, but not if you have any savings, what is that saying?

For me it's a no brainer that people should cover down periods either through savings or insurance. However, this should be regardless of whether we're talking about renters or buyers.

It needs to be reasonable. There's no point having no safety net because no money would get into the economy as people would save every penny they could. The government to a certain extent is already encouraging this by extending the qualification period for SMI.

I expect we'll see further tweaks as the economy improves. Really not sure what they are going to do about pensioners who have been on SMI for years,

ukcarper

wymondham wrote: »

In the scenario whereby someone takes on a big mortgage without thinking it through (assuming rates will be 5% for eternity!), struggles with it and then the state helps him with this for two years or whatever .... is this really fair on someone who wants to buy but sensibly does not, but the state is happy he pays someone elses mortgage who has not been so sensible?

It is wrong for people to gain out of state aid, and this includes having house paid for in part by the state....

I don't see what assuming rate will be 5% for enternity has got to do with SMI. If they are working and can't pay that has to be sorted out between them and the bank.

ILW

wotsthat wrote: »

For me it's a no brainer that people should cover down periods either through savings or insurance. However, this should be regardless of whether we're talking about renters or buyers.

It needs to be reasonable. There's no point having no safety net because no money would get into the economy as people would save every penny they could. The government to a certain extent is already encouraging this by extending the qualification period for SMI.

I expect we'll see further tweaks as the economy improves. Really not sure what they are going to do about pensioners who have been on SMI for years,

So what is the point in paying for insurance or putting some savings away in the current system where you mortgage interest is paid for years?

Strikes me you would be rather stupid to try and cover yourself.

wymondham

ukcarper wrote: »

I don't see what assuming rate will be 5% for enternity has got to do with SMI. If they are working and can't pay that has to be sorted out between them and the bank.

It's got nothing to do with it - me just trying to make up a scenario.....

So, there is little point in any mortgage protection payment planning now is there, as the state will pay it for you!

chewmylegoff

ILW wrote: »

So what is the point in paying for insurance or putting some savings away in the current system where you mortgage interest is paid for years?

Strikes me you would be rather stupid to try and cover yourself.

(1) SMI covers only upto £200,000 of mortgage and then only for 2 years

(2) SMI can be removed by the govt at any time

anyone whose plan is not to save any money because SMI will be there to help them if they get made redundant is just as much of a moron (in my view, of course) as the people who say that they won't save for their retirement because they see that people who haven't saved receive handouts from the govt.

RenovationMan

chewmylegoff wrote: »

anyone whose plan is not to save any money because SMI will be there to help them if they get made redundant is just as much of a moron (in my view, of course) as the people who say that they won't save for their retirement because they see that people who haven't saved receive handouts from the govt.

I wish I could thank this twice.

ukcarper

wymondham wrote: »

It's got nothing to do with it - me just trying to make up a scenario.....

So, there is little point in any mortgage protection payment planning now is there, as the state will pay it for you!

They always have

ukcarper

chewmylegoff wrote: »

(1) SMI covers only upto £200,000 of mortgage and then only for 2 years

(2) SMI can be removed by the govt at any time

anyone whose plan is not to save any money because SMI will be there to help them if they get made redundant is just as much of a moron (in my view, of course) as the people who say that they won't save for their retirement because they see that people who haven't saved receive handouts from the govt.

You also have to wait 3 months before you can claim.

ILW

ukcarper wrote: »

They always have

So are the majority of mortgage insurance policies a waste of money as the state will pick up the bill anyway?