Mortgage term ending - capital unpaid - what will the Market do?

amnblog

shortchanged wrote: »

Answer this honestly then amnblog.

Are you as a broker feeling a little worried of the potential backlash of IO mortgages?


It's quite likely to be the next big mis-selling raft of claims (wrongly so in my eyes).


Is your conscience clear?

As regulated individuals we are asked to operate within the rules at the time.


The problem we have to manage is the track record of the 'rules' being changed retrospectively.

kingstreet

I don't ever remember adding "20/20 retrospective vision" on my CV when I joined this industry in 1984, but it's a skill I've had to develop.

lonestarfan

yarbar wrote: »

Well that certainly created a bit of a stir amongst you. However you have all missed the main thrust of the reply which was to poll your knowledge of the Santander Lifetime Mortgage proposals. This has been completely ignored because of my use of the word "unfortunate".

We are all different in this world and all experience differing circumstances in life and I am well aware of a significant number people who find themselves unable to pay back capital in full at the end of their term through no real fault of their own. These people ARE unfortunate and deserve a little more sympathy and assistance than given by many in this thread.

The above was my first contribution to the forum and I have to say I expected helpful opinion and advice. I am disappointed that a lot of that posted is critical almost to the point of being aggressive. What a shame. :(:(

You will soon recognise the regular trolls oh and the ones who've had a perfect life with no divorce, disability, accident, death or low paid jobs. There are some fabulously helpful posters too though so do persevere as I've learnt loads on this forum. Nothing to add about the Santander lifetime Mortage tho sorry - I keenly await the detail as I find this income/age thing interesting and want it to be able to help people.

amnblog

I can see a time when the major banks all have a similar product to the one mooted by Yarbar.

shortchanged_2

amnblog wrote: »

I can see a time when the major banks all have a similar product to the one mooted by Yarbar.

Personally I think it would be better if IO mortgages were scrapped altogether.
That way there would be a level playing field for everyone and there would be none of this uncertainty regarding the capital being paid off at the end of the term.

Rollinghills

When my husband worked in Switzerland he looked into buying a property and was told 100 year mortgages were the norm! I don't know the details but I suppose the family takes over the property + the mortgage or the bank takes over.

gadgetmind

shortchanged wrote: »

Personally I think it would be better if IO mortgages were scrapped altogether.

I can't see the problem with them as long as people have a repayment vehicle in place, and we applied for one today!

JimmyTheWig

kingstreet wrote: »

You may be right, but as I said no lender offered to lend more because interest-only was cheaper than repayment.

But presumably not everyone borrows the maximum that they are allowed. Presumably some people borrow the maximum that they believe they can afford.

kingstreet

JimmyTheWig wrote: »

But presumably not everyone borrows the maximum that they are allowed. Presumably some people borrow the maximum that they believe they can afford.

Quite possibly.

As I mentioned earlier, what they do with the savings they make on paying only interest then becomes the interesting bit.

gadgetmind

Lease a car, don't make final "balloon" payment, car goes back.

Same with a house.

Caveat emptor.