Windfall fears for over 1m interest only mortgage holders

ILW

Graham_Devon wrote: »

Right.

But this isn't a windfall is it.

It's situation where your life will have to adjust immensly, where you may, dependant on circumstances and how far it went, have adverse credit records and difficulty following on from that when going through rental checks.

Why dress it up as anything else? Especially a "good thing" as that is what a windfall is usually described as.

Why are you standing up for these idiots?
They have bought something but decided not to pay for it.

michaels

Funnily enough the removal of access to IO could turn out to be the problem. Imagine someone aged 30 who took out a 25 year IO mortgage planning to pay off the capital using the 25% pension tax free payout. Unless a govt employee their retirement plan at 55 is likely to have to be 60+ because of incrreased longevity. Rather than being able to extend the IO term or remortgage on IO to the new retirement date the new repayment only rules will prevent this - to the benefit of who?

LydiaJ

IveSeenTheLight wrote: »

I wonder how many divorced couples who had bought but then end up in rented.
Maybe not IO, but certainly buyers who may end up in rented accomodation.
I think PN may be a poster in that scenario

Is this any real difference?

As I said before, IO mortgages provided those who may not have been able to afford to repay capital and Interest a way of renting at financially better terms and improved security of tenure.

Unexpected life circumstances that totally change one's housing situation? Yeah, done that twice. Once when late-nearly-ex got himself sacked from a job with tied housing and we ended up in rented, and then when he was killed while waiting for the decree absolute, and I was able to move out of rented and buy with the life insurance.

PN is not a divorcee, but yes, she's owned in the past. She's posted on here that since then she's rented, lived with elderly parents who needed her help, lodged, rented again, and is now house hunting, looking to buy.

Graham_Devon

ILW wrote: »

Why are you standing up for these idiots?
They have bought something but decided not to pay for it.

I'm not standing up for them.

Every single thread on IO I'm attacked for wanting people chucked out of their homes. Suddenly, I'm now accused of standing up for them.

I'm talking solely about the "windfall" and it's descriptive use. Surely you can see that?

michaels

Graham_Devon wrote: »

Right.

But this isn't a windfall is it.

It's situation where your life will have to adjust immensly, where you may, dependant on circumstances and how far it went, have adverse credit records and difficulty following on from that when going through rental checks.

Why dress it up as anything else? Especially a "good thing" as that is what a windfall is usually described as.

So you have a property that you can not afford the mortgage for but does have some equity.

Do you (a) stick your fingers in your ears, head in the sand and run up huge costs by failing to repay the mortgage thus minimising any windfall and maximising the misery and financial damage or (b) accept the situation and sell in good time to maximise the windfall profit.

It appears that you are assuming that everyone would do (a). Why do you make this assumption?

Cornucopia

So it comes down to financially better off, but with a possibly difficult emotional situation to deal with?

Sounds okay to me. People need to man/woman up.

Graham_Devon

michaels wrote: »

So you have a property that you can not afford the mortgage for but does have some equity.

Do you (a) stick your fingers in your ears, head in the sand and run up huge costs by failing to repay the mortgage thus minimising any windfall and maximising the misery and financial damage or (b) accept the situation and sell in good time to maximise the windfall profit.

It appears that you are assuming that everyone would do (a). Why do you make this assumption?

This is what i have been saying for how many years!?!?

Can I say it again....

I'm not looking at whether they were right or wrong to buy. I am looking at the descriptive use of calling this situation a windfall. It's anything but.

I give up. Clearly I'm being railroaded.

HAMISH_MCTAVISH

Graham_Devon wrote: »

. I'm often descirbed as wanting to see people reposessed....funnily enough by Hamish who in this instance describes it as a windfall!

Why do you keep bringing up repossession?

I didn't mention it.

The article I based this on wasn't about it.

But you keep banging on about it.....

Surely 99.999% of people with an Interest Only mortgage will come to the end of term having either...

• remortgaged onto a repayment mortgage
• sold the house
• saved enough money to pay off the mortgage
• etc

So why the obsession with repossession?

LydiaJ

The conclusion of the report is that the banks should (and will) write to all these people spelling out exactly what the position is. The sensible ones will get a letter telling them something they know already - no harm done there. The idiots will have another opportunity to wake up and smell the coffee. The banks will have given themselves some protection against possible mis-selling claims in future. Surely this is a good thing all round. It's to nobody's advantage for the idiots to remain in ignorance of the situation they're going to find themselves in, even if it would be entirely their own fault.

Graham_Devon

HAMISH_MCTAVISH wrote: »

Why do you keep bringing up repossession?

I actually said reposession or facing up and selling. I don't need to keep saying it. I have already explained myself on page 1.