Nearly one million face mortgage difficulty.

BobQ

wotsthat wrote: »

Even on this forum I can't quite believe we're giving dignity to the idea that anyone taking on a IO mortgage wasn't clear about what an interest only mortgage was given there's a strong hint in the name.

Of course, there will be a few examples of mis-selling but I expect the customers to be simpletons who shouldn't have been given any mortgage let alone an interest only mortgage.

These days lenders are more inclined to explain but in the past they used product names that did not make it obvious.

Landofwood

Thrugelmir wrote: »

I sold my family home in 2005 for £335k. Looking the other day the most any property has realised in the development since is £365k.
(The development consists of 18 - 4 bed detached houses of the same floor area in different room layouts in a lovely rural location).

Hence my hindsight comment. My point was factual so hit the target. There's an element of good fortune in life.

Please post the Zoopla link.

Snakey

I got an interest-only mortgage in 1993 when I was 21. At the time I hadn't had the benefit of twenty years working in finance that I have now, I was working in a factory and my then-boyfriend was a filing clerk. We understood the difference between "interest only" and "repayment". And that's as near as dammit 25 years ago. I don't believe that there is anybody out there who didn't understand what they were doing - unless people were given mortgages who actually shouldn't have been allowed out of the house without a responsible adult carer, in which case they can void the contract on the grounds that they lacked the mental capacity to legally bind themselves.

Yes, salesmen tried to make it sound like endowments were more or less guaranteed to not only repay the capital but also make you a nice profit, as well as being cheaper to fund than capital repayments, but this isn't even what people are complaining about - the people in the articles I've read had literally just not bothered to do anything about repaying the capital.

As others have said, there is no moral difference between a 45+ year old who doesn't own a house because they have always rented, and a 45+ year old who doesn't own a house because they got an interest-only mortgage and had to sell up at the end of the 25-year term because they couldn't repay the capital. Should everybody be given a free house otherwise it "isn't fair" (in some unspecified manner - there are a lot of things that I don't own that people who are better off than me do own, who shall I send my list of expectations to)?

I have an interest-only mortgage and I would be fuming if somebody tried to make me put a repayment plan in place just because, somewhere in the country, there are some absolute morons who had no idea that they'd have to pay back the money they borrowed. I'll pay it back as and when I have spare money, thanks, just as I said I would when I took it out. I'm an adult. You can start having a go at me when it gets to the end of the term and I tell you I can't pay it, and not one day before. That was the agreement we signed. You don't get to nag me throughout the intervening 25 years on a "just in case" basis.

Technically, I'm one of those million people in the article. I suspect that there are more like me than like those idiots who are sitting there saying "oh, we just didn't really think about how we'd pay it back, it's so unfair". Sheesh, can you even imagine the outrage if somebody had tried to tell them that maybe they shouldn't take out this sort of loan because they weren't sophisticated enough/hadn't thought it through? Seriously, can you? I can almost write the article for you right now

Snakey

Daisy !!!!!!, 27, today blasted "selfish" banks who REFUSED to let her borrow the money she needed to buy her dream home. The Normaltown branch of Everybank apparently DEMANDED to know how she planned to repay the loan, INSISTED that she demonstrate she could afford the necessary investment plan, and REJECTED her application on the grounds that she couldn't afford it.

"I explained that I needed a four-bedroom detached home because I'd really, really wanted one ever since I was a little girl, but they didn't listen" she fumed. "I showed them my Pinterest board with the colour schemes on it, and everything."

"They made us feel like we were trying to borrow money we might not be able to repay - as if we hadn't given it any thought or something. It was humiliating" said boyfriend Jordan Thickasmince.

Daisy and Jordan are hoping to SUE the bank for one thousand million pounds for hurt feelings.

"They had no right to turn us down. It's because they're jealous." Daisy said yesterday, speaking from her brand new car which she took out on 100% finance with a payday loan. "It was like applying for a mortgage in Nazi Germany!" she added.

Everybank could not immediately be reached for comment because they were too busy laughing.

BobQ

Snakey wrote: »

I have an interest-only mortgage and I would be fuming if somebody tried to make me put a repayment plan in place just because, somewhere in the country, there are some absolute morons who had no idea that they'd have to pay back the money they borrowed. I'll pay it back as and when I have spare money, thanks, just as I said I would when I took it out. I'm an adult. You can start having a go at me when it gets to the end of the term and I tell you I can't pay it, and not one day before. That was the agreement we signed. You don't get to nag me throughout the intervening 25 years on a "just in case" basis.

I would dispute the "moron" label because some people will always take the easy, short-term or convenient options. Also there are some who are genuinely stupid or naive and make mistakes.

However, can you not see why lenders are concerned? You sound as if you are doing the right thing in paying off what you can as and when you can. It is a plan of sorts and presumably it is evident to the lender that you have such a plan.

Do you really object to telling them what your plan is? As I said earlier I took the same view as yours (ie none of their business until I default). But on reflection I see nothing wrong with telling them.

antrobus

wotsthat wrote: »

....They really ought to be able to show loss too - with 25 years of cheap digs and HPI equity I wish them the best of luck.....

If, as in the case of Emptage vs FSCS, you were advised by an IFA to take out a mortgage on your home and use the proceeds to buy a Spanish holiday home whose value then tanked, then you have suffered a loss. But that's not what we are talking about here. We are talking about people who have taken out IO mortgages to buy the houses they are living in. Unless the price of that house has also tanked, it is difficult to see how they could have suffered a loss.

wotsthat wrote: »

....That tick tock sound isn't the ticking IO time bomb it's time running out for the compo bandwagon.

People have been flying that particular kite for a number of years now.

mayonnaise

Thrugelmir wrote: »

I sold my family home in 2005 for £335k. Looking the other day the most any property has realised in the development since is £365k. (The development consists of 18 - 4 bed detached houses of the same floor area in different room layouts in a lovely rural location).

Landofwood wrote: »

Please post the Zoopla link.

Yes, I'd also like to know where those £365k 4-bed detached family homes are in that lovely rural location in Surrey with barely any HPI since 2005.
The Zoopla link that Thrugelmir will provide shortly will surely clarify.

Thrugelmir wrote: »

My family home was Surrey.

Jack_Johnson_the_acorn

mayonnaise wrote: »

Yes, I'd also like to know where those £365k 4-bed detached family homes are in that lovely rural location in Surrey with barely any HPI since 2005.
The Zoopla link that Thrugelmir will provide shortly will surely clarify.

Well a quick rightmove search in Surrey shows ZERO results for 4 bed detached properties around £365k..... The properties that do show are either retirement scheme properties or delapadated terraces that are not exactly "rural"

ukcarper

Looking in my road can't go back to 2005 but in 2007 4 bed detached sold for £277k similar sold earlier this year for £350k this is in Surrey.

wannabe_sybil

I have no economic knowledge to contribute but this may be a discussion point - all facts absolutely correct at time of typing. Our house, bought with an interest only mortgage linked to an endowment in 1994, is worth @ £6k more than it was 21 years ago (six thousand pounds. Not a typo).

At the same time the value of the endowment is less than optimistic.

Over ten years ago we started over paying on the mortgage because even an idiot like me can work out that there could be issues.