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Debate House Prices
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whats going to happen in years to come with interest only mortgages?
Comments
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shortchanged wrote: »I don't see anything wrong in people being kicked out if they cannot pay off their mortgage when the term is ended.
There were always options open to them such as a repayment mortgage which would have meant that the capital would always be paid back at the end of the term.
I am sick of people whinging when they can't afford to pay off their mortgage at the end of the mortgage term.
They took out a contract for a loan over a period of time which should be paid back at the end of the term. If they subsequently don't have the funds to pay it back then out you go. They took a gamble that didn't pay off.
I would expect nothing different from you.0 -
Graham_Devon wrote: »My parent's expected to pay it off through promotion and an endowment. It didn't happen. It might have done, but a spanner in the works was my dads' health. They could have done it if he could have continued working, but it would have involved spending their later working years scrimping and saving every last penny.
My dad says they were sucked in to the sales pitch when applying. They actually applied for a repayment mortgage, but IO was sold as a much better alternative, alongside it, they had an endowment. So it wasn't as if they hadn't planned ont he repayment part. However, that endowment was around 60% off it's target when they sold up (i.e. 60% off where it should have been at the year they sold). It would have helped, but didn't do what it said on the tin.
They did sell 12 years before the mortgage ended, as they faced up to it.
That's why I say, it's OK projecting, calculation, but !!!!!! happens. How many others are in the non performing endowment boat after initially going for a repayment mortgage but being suckered in by the sales pitch?
Its one of the two biggest financial mistakes they ever made dad says. Both of them were caused by greed he admits. In this instance, the greed of being sold something which would allow them the freedom of extra disposable cash each month and an endowment that would end up profitable.
The other was buying a capri
Thanks GD.
Yes !!!!!! does happen and as you have detailed it isn't usually one thing it is a load of stuff colliding. One thing in isolation might me manageable.
Sad thing is unless it was a badly specified endowment from the outset I would be surprised if the "savings" were that significant in the scheme of things.
Endowments had their place with premium relief. with profits policies and MIRAS for people that knew what they were doing. Those sold in the late 80s/90s onwards were an added commission for the provider.
Look on the bright side it could have been an Allegro."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
scousedave wrote: »The title says it all......with so many people only managing to pay their mortgages on interest only and no savings plan any thoughts when these mortgages come to the end of their period and have to be repaid?
£400 billion of debt to be redeemed.
Average IO mortgage settled in 2012 - £53,000
Average IO mortgage forecast to be settled after 2020 - £150,000.
Many questions yet to be answered.0 -
Thrugelmir wrote: »
Average IO mortgage settled in 2012 - £53,000
Versus average house price in 2012 of circa £225,000Average IO mortgage forecast to be settled after 2020 - £150,000.
Versus average house price in 2020 of, in all likelihood, circa £300,000....Many questions yet to be answered.
Indeed.
Like how many hundreds of thousands of pounds will they be better off through buying on I/O rather than renting for the same time?
Will it be £300,000?
Or £200,000?
Or perhaps only a measly £150,000?“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »Versus average house price in 2012 of circa £225,000
Versus average house price in 2020 of, in all likelihood, circa £300,000....
Indeed.
Like how many hundreds of thousands of pounds will they be better off through buying on I/O rather than renting for the same time?
Will it be £300,000?
Or £200,000?
Or perhaps only a measly £150,000?
Sorry Hamish but I'm being thick now but which index has the average house price at £225000.
And I'd also appreciate an explanation as to why there is such a massive difference in this average price compared to all the others of Halliwide and the Land registry which are around the £160,000 mark.0 -
shortchanged wrote: »Sorry Hamish but I'm being thick now but which index has the average house price at £225000.
The correct one!
0 -
HAMISH_MCTAVISH wrote: »
Versus average house price in 2020 of, in all likelihood, circa £300,000....
Wild speculation. I wouldn't expect anything else from you Hamish.
Do you genuinely believe that the average house price (according to the index you quote) is going to rise by £75,000 in 7 years?
At least we can all look forward to massive pay rises in the next few years to pay for these price rises.0 -
shortchanged wrote: »Sorry Hamish but I'm being thick now but which index has the average house price at £225000.
ONS and Acadametrics are both there or thereabouts. Actually ONS is 235K now, but was 225K a year ago.
As is the Land Registry Quarterly series.
Because they all actually do provide an average house price.And I'd also appreciate an explanation as to why there is such a massive difference in this average price compared to all the others of Halliwide and the Land registry which are around the £160,000 mark.
Haliwide and LR monthly are not average house prices.
Haliwide uses hedonic regression to provide a "typical" house price, and LR monthly uses Repeat sales regression.
And Haliwide is now 170K, BTW. “The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »ONS and Acadametrics are both there or thereabouts. Actually ONS is 235K now, but was 225K a year ago.
Was that before or after it jumped up 20k in a single month due to "new methology"?0 -
shortchanged wrote: »Do you genuinely believe that the average house price (according to the index you quote) is going to rise by £75,000 in 7 years?
8 years.
2012 to 2020.
And yes, I do.
It's up 10K in the last year already, despite ongoing mortgage rationing, high unemployment, a depressed economy, etc, so only another 65K to go in the next 7 years.At least we can all look forward to massive pay rises in the next few years to pay for these price rises.
No need.
Pay will rise, but housing is more affordable than at most times in the last few decades, and that's with real world FTB rates at closer to 5% than 0.5%.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0
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