Windfall fears for over 1m interest only mortgage holders

Graham_Devon

wotsthat wrote: »

I don't care if we call £90k a 'windfall', 'lump sum', '11 years rent' or whatever.

Well sorry, but that's what the thread is about. :undecided

wotsthat

Dear oh dear - it's a thread about IO loans. Hamish only used the word 'windfall' to wind up the usual suspects.

Don't the Oxford English Dictionary have a forum where you can go and argue about the correct use of 'windfall'?

IveSeenTheLight

Graham_Devon wrote: »

Windfall:
wind·fall

A piece of unexpected good fortune, typically one that involves receiving a large amount of money.

http://oxforddictionaries.com/definition/english/windfall

a large amount of money that is won or received unexpectedly

You could argue that someone who is required to leave their family home and then receives a large amount of money has received a windfall.

Maybe you would prefer compensation.

The IO buyer is compensated when leaving their home of many years.
the renter receives no such compensation.

Cornucopia

Seems like the argument is rapidly coming down to "glass half full/half empty"...

If they expected to own a house and ended up not doing so, that is "bad", despite the fact that the scenario they entered into was never going to achieve that. I appreciate that circumstances may have precluded them doing anything else, but they are adults, after all.

If they had no such false expectations and ended the mortgage term with no house, but some accrued equity, then that's "good", surely.

HAMISH_MCTAVISH

Cornucopia wrote: »

If they expected to own a house and ended up not doing so, that is "bad", despite the fact that the scenario they entered into was never going to achieve that.

Interest Only.

The clue is in the name.

Legislating to protect a tiny minority of stupid people from themselves, and in so doing penalising the majority who could benefit from such a thing, is never a good idea....

Thrugelmir

michaels wrote: »

Unlike those who rent who are just given a whole property after 25 years rather than just some proportion? There are a lot more renters than IO mortgage holders, shouldn't we worry about them first?

These figures don't address the issue of interest only BTL landlords either. So property may well yet become affordable again.

Thrugelmir

greggymagic wrote: »

if he can't because of equity problems then it makes even more sense to try and chip away at the capital as he'll benefit from better LTV after a while which will in turn lower his interest rate and increase his ability for capital repayments even more.

The guy needs to pay £500 in capital a month just to stand still even now. Seems as if his dream has burst.

Thrugelmir

IveSeenTheLight wrote: »

The IO buyer is compensated when leaving their home of many years.
the renter receives no such compensation.

Jury is out.

BOI mortgage holders would certainly disagree at the current time.

ILW

Thrugelmir wrote: »

These figures don't address the issue of interest only BTL landlords either. So property may well yet become affordable again.

BTL can just sell on their investment if they wish, pocketing any gain in equity.

Cornucopia

HAMISH_MCTAVISH wrote: »

Interest Only.

The clue is in the name.

Legislating to protect a tiny minority of stupid people from themselves, and in so doing penalising the majority who could benefit from such a thing, is never a good idea....

I totally agree. On my adventures with property, I've never had a repayment mortgage. For various reasons (which differed over time) there was never the need.

I have my own house, though.

The wider picture is that there is a small danger that those with IOs and no plans for the maturity of their mortgages may damage the market and everyone else's interests at the same time.