Mortgage misery for backfooted boomers

ruggedtoast

http://www.dailymail.co.uk/money/mortgageshome/article-2225427/Over-50s-mortgage-trap-cost-home.html#comments

I can't meet the mortgage on my £1m home

Ken Wheeler also needs to sell his home in Harpenden, Herts, because he is struggling to meet the mortgage payments.

But he can’t find a buyer — the property has been on the market for two-and-a-half years.

The City worker is stuck paying the mortgage on a £1million property while bleeding even more money in costly rent on a separate property.

Mr Wheeler, 52 and divorced, took a series of bets on the property market to trade up the ladder.

He bought his first family home for £550,000 on a repayment mortgage of £350,000. The home loan repayments were £2,200 a month. But when he traded up to a £960,000 home, he brought across the outstanding mortgage and took out a new home loan for £350,000 in a bid to keep his total repayments low.

Despite this, he was still paying £4,000 a month.

The new house was supposed to be the perfect home in a good area for him and his wife to raise their two boys.

But as the banking crisis hit and the couple separated, Mr Wheeler moved the whole mortgage — which at that time stood at £660,000 — on to interest-only.
He is also paying £1,250 rent while he waits for the house to sell.

‘I don’t have a private pension. This property was supposed to be my retirement fund,’ he says.

‘We thought Harpenden was a strong area for property investment and that our house would accumulate in value.

‘The plan was to take early retirement, sell the house, put some money in our boys’ trust funds for university and buy a smaller property.

‘When we first saw the house, it was love at first sight. But now it feels as if I’m stuck in a vacuum. I don’t see what is going to change unless we accept a loss in order to sell the house.’

In a pickle on interest only

ukcarper

Shouldn't the title be Boomer not Boomers

ash28

I'm a babyboomer and my heart bleeds ....not.

On the endowment one - a friend was told in the early 1990s that his endowment policy wouldn't meet his mortgage at the end of the term.

We had an endowment mortgage then too - we moved in 1993 with a repayment mortgage.

The one who couldn't afford to pay off his mortgage when his pension was a lot less than he had been forecast - says his wife died - didn't they have life insurance?

And the one with the £1m house in Harpenden and the £660k mortgage should reduce the price, sell it and buy a 2 bed terrace in County Durham - this would do...

http://www.rightmove.co.uk/property-for-sale/property-35321317.html

tanith

We knew hardly anything about mortgages and endowments when we bought our house but we knew enough when warned that our endowment probably wasn't going to cover the mortgage to switch to a repayment mortgage.. some of these people in the article worked in high flying jobs how can they not of known that they were in a very vulnerable position if they didn't do something.

dryhat

Every single one of the people in that story and thousands of others in a similar situation are total idiots. Simple as that.

They should be riduculed not pitied.

ukcarper

One was city worker able to get a £700k mortgage must have had a good job.

Sapphire

dryhat wrote: »

Every single one of the people in that story and thousands of others in a similar situation are total idiots. Simple as that.

The scenario described by the OP (and similar scenarios where individuals have over-borrowed) certainly doesn't apply solely to 'boomers'. :cool:

chewmylegoff

ukcarper wrote: »

One was city worker able to get a £700k mortgage must have had a good job.

i feel very sorry for him, poor chap has only made a gain of £100,000! was able to get a £700,000 mortgage but doesn't have a pension scheme?!

what is the point of this article. just seems to be a lot of people who have gained large amounts of equity through HPI complaining about the fact that they still have a mortgage which is unsurprising since they have never attempted to actually pay the mortgages off.

ILW

As a boomer myself, I think they should stop complaining.

societys_child

Nothing to do with being a boomer, just someone who thought they'd backed a winner, unfortunately for him it went lame . .

ruggedtoast

Not much sympathy here then, I felt a bit sorry at least for the first couple who didn't seem to realise what they were getting into.

Looks like its a boomer eat boomer world out there. Nice.