Shortfall fears for over 1m interest only mortgage holders

Graham_Devon

GhIFA wrote: »

And 90% of IO mortgage holders are doing the same, with 75% confident that their plans are on track.

Doesn't matter how many times this gets mentioned, you seem desperate to recognise a problem that the report shows isn't there.

Hmmm.

You were banned from this board weren't you? Or mainly the housing board. The IFA who signed off as "T" or something?

Got absolutely ridiculed for their IO stance.

If you are not I apologise, but the way you write and the way you edit quote is exactly the same. The poster came to this board on IO threads only. The timing of you signing up just so happens to be the same as when the poster was banned.

Maybe its all pure coincidence?

GhIFA

Graham_Devon wrote: »

Hmmm.

You were banned from this board weren't you? Or mainly the housing board. The IFA who signed off as "T" or something?

Got absolutely ridiculed for their IO stance.

If you are not I apologise, but the way you write and the way you edit quote is exactly the same. The poster came to this board on IO threads only. The timing of you signing up just so happens to be the same as when the poster was banned.

Maybe its all pure coincidence?

Sorry, you've completely lost me now?

Never banned from the boards, post plenty on some of the other boards, and don't see anybody "ridiculing" me for my stance?

The way I edit quotes????! Seriously - you highlight the text and hit the quote button - as far as I am aware you can't edit in a particular "style".

All I've done is challenge the point you keep repeating by pointing out how this is not borne out in the report, which you admit you haven't read.

But if the best you now have to come back with is to try and portray me as some mysterious previously banned poster you carry on.....truly bizarre.

Mr._Pricklepants

GhIFA wrote: »

Sorry, you've completely lost me now?

It's okay GhIFA. It's standard Graham procedure when he gets out-debated.

One tactic is the classic muddle. (often followed up by the well known "toy out of pram" manoeuvre.)

Another tactic is to claim posters are sockies and/or banned members.

I've been called nollag, sibley, mr.ree, Renoman....probably forgot a few.

Same old, same old...

StevieJ

Mr._Pricklepants wrote: »

I've been called nollag, sibley, mr.ree, Renoman....probably forgot a few.

Same old, same old...

I have not noticed DD on here since I cuckooed his Avatar a while back.

OffGridLiving

Graham_Devon wrote: »

You need to recognise the problem before you can understand the "who-ha".

You may have done all you did. BUT you did that in an inflationary environment (asset and wages), an environment with ever loosening regulation, with access to easy credit.

Try doing it in todays environment. You can't just switch to another mortgage without increasing your payments 2 fold. Wage inflation isn't cutting the debt. Price inflation is eating up disposable income. People are still, even 6 years later in negative equity making remortgaging to a repayment mortgage impossible.

Therein lies the problem.

What you saw is unlikely to happen going forward....certainly not at such a scale where wages outgrow debts on a large scale and credit just becomes easier and easier to the point of insanity.

Well if we are only looking at today's environment, then I think we'll probably be discounting a great number of IO mortgages mentioned in the report. If we just focus on those IO mortgages that were taken out over the last 5 years, then the mortgage holders have at least 20 years to sort themselves out before the 'crisis', much longer if they remortgage and keep their 25 year terms, and so my point....

"Some people will do the same as myself, some will just get a repayment to cover the RPV shortfall, some will downsize and repay the money, some will extend their term and go onto repayment basis, some will use savings, pension TFA or get a small bank loan to repay the shortfall (as someone said earlier, today's £150k mortgages will seem small in 25 years time, just as £20k mortgages seem now)."

...still applies as far as I can see?

Thrugelmir

OffGridLiving wrote: »

If we just focus on those IO mortgages that were taken out over the last 5 years, then the mortgage holders have at least 20 years to sort themselves out before the 'crisis', much longer if they remortgage and keep their 25 year terms, and so my point....

Peak of the lending boom was 2003-2008. This is the period where the problem lies. As many people's disposable incomes have seen no improvement since then. It's low interest rates which are keeping the heavily indebted afloat. Every year through to around 2031. The average interest only mortgage heading for redemption grows ever larger. So difficult to see the exit route for a high %.

CLAPTON

Cornucopia wrote: »

Hmmm....

I'm not sure it is unknown - it's fundamentally based on tracking inflation vs. mortgage debt.

And weren't Endowments meant to be cheaper than Repayments - wasn't that the point?

I just think that ordinary housebuyers ought to be able to benefit from different approaches to financing in the same way that many BTL owners do.

If anything, the focus on Repayment mortgages is all about safety and predictability from the Banks' POV, whilst allowing for virtually no creative accountancy at all on the part of buyers.

No, endowments were generally more expensive than repayment mortgage.

they were meant however to produce a surplus at the end of the mortgage term so you ended by with your mortgage paid off plus some spare cash.

they worked Ok in a high inflation economy but were basically the 'normal' financial service fraud.

Thrugelmir

CLAPTON wrote: »

they worked Ok in a high inflation economy but were basically the 'normal' financial service fraud.

As goes debt. As you never have work harder to pay it back.

Hence why politicians are desperate for growth driven by debt. As they are clueless as to how to actually create growth without it.

TruckerT

Graham_Devon wrote: »

I doubt it.

The government won't let that happen...not currently anyway. There would be a scheme designed to shovel taxpayer money at these fmailies. Maybe an extension of the existing scheme, SMI.

Thrugelmir wrote: »

People did. The boom in interest only mortages was when Northern Rock etc were giving away credit. House prices were rising double digit every year. So people thought that the property would pay for itself. By leveraging up on the maximum amount of the debt they could borrow.

A Warren Buffet famously said about the Stock Market. When the tide goes out you can see who is swimming without any trunks on.

Blackbeard_of_Perranporth wrote: »

Good. Cheap house coming soon to those that need them.

Blunt I know, but why should those of us who can do mental arithmetic bail those who cannot read out?

It wasn't the borrowers who did the leveraging-up, it was the lenders.

The FCA is warning about the problems which might face the borrowers, but I haven't heard that it is instructing the lenders to put money aside to cover their potential losses.

I wouldn't be at all surprised if the taxpayers will be required once more to cover the banks' losses.

TruckerT

TruckerT

Thrugelmir wrote: »

Hence why politicians are desperate for growth driven by debt. As they are clueless as to how to actually create growth without it

Politicians are clueless about how to create growth full stop!

Some might say that it is time to stop worrying about growth, and concentrate on preserving our habitat.

TruckerT