Nearly one million face mortgage difficulty.

lisyloo

When I was shopping around for a mortgage (admittedly that was 2008) you chould chose your term.
There is obviously a tendancy with first homes to make it 25 years or thereabouts, but later on in life some people have firm plans to pay it down more quickly.
The ideal would be long term and complete flexibility, but where there are overpayment limits/penalties it's cheaper to pay off the mortgage as soon as you can.

Graham_Devon

wotsthat wrote: »

20% of all IO were redeemed in a single year - I find that an amazingly high number but we're meant to worry about the 0.7% that came up for repayment and haven't yet been redeemed?

We don't have to worry about anything.

It was a simple question. What's happening to those mortgages?

Thrugelmir

wotsthat wrote: »

20% of all IO were redeemed in a single year - I find that an amazingly high number but we're meant to worry about the 0.7% that came up for repayment and haven't yet been redeemed?

More likely remortgaged to a new lender than redeemed. Remember NRAM's SVR is still at 4.74% for example. So those that are able to are switching onto repayment. Though on an extended repayment period to make repayments affordable.

chris_m

Thrugelmir wrote: »

The FCA asked them too. Lenders will take the view that people have been warned. They'll be no mis-selling scandal as a result.

Why people get so arsey when asked a straight forward question of fact is beyond me. Normally those that do get agitated are those most at risk.

It probably depends on how they were asked.
My letter from A&L was very much along the lines of "if there might be a problem repaying the capital, we'd much rather help you find a solution now than leave it until it's too late".
I had no problem with that approach, nor any problem with repaying - did so early anyway, as I'd planned.

gadgetmind

lisyloo wrote: »

later on in life some people have firm plans to pay it down more quickly.

When we took our IO mortgage, the bank manager asked what term I had in mind.

I said, "Well, I'm 52, and you don't lend beyond 65, so 13 years?"

He stared me in the eye and asked "Are you telling me that you'll be still working at age 65?"

"Yes," I assured him, with nose starting to grow a little.

"Excellent", he exclaimed, "and I'm writing down here that I believe you!"

wotsthat

Graham_Devon wrote: »

We don't have to worry about anything.

No but some seem to be more anxious than others

Graham_Devon wrote: »

It was a simple question. What's happening to those mortgages?

How would anyone but the lenders know the full details of each of the individual mortgages but according to the CML (for the third time)

....previous experience shows that most such loans subsequently redeem within a relatively few months of maturity.

However, there is a small minority of customers who have not taken the necessary steps to able to repay on time, or nearly on time. Lenders will always seek to explore every option for such borrowers. And this is so even in cases where obtaining a court order for possession would be relatively simple. The 900 cases of possession reported in our data since 2011 equates to less than 0.5% of the total number of interest-only mortgages that did not redeem on schedule.

300,000 pure IO loans paid off in a year replaced by hardly any and 99.5% of the tiny number of loans not redeemed on schedule were settled without having to resort to repossession.

All the wasted column inches devoted to ticking time bombs. The 'journalists' and the muppets that lapped it all up - I'm embarrassed for them.

chris_m

wotsthat wrote: »

All the wasted column inches devoted to ticking time bombs. The 'journalists' and the muppets that lapped it all up - I'm embarrassed for them.

The journos probably need the income from writing the articles to help pay off their own IO mortgages :rotfl:

wotsthat

Thrugelmir wrote: »

More likely remortgaged to a new lender than redeemed. Remember NRAM's SVR is still at 4.74% for example. So those that are able to are switching onto repayment. Though on an extended repayment period to make repayments affordable.

It's now obvious that the ticking timebomb of IO mortgages isn't going to go off and I won't be required to dip my hands in my pockets to help out.

So I couldn't care less about the semantics of whether loans were redeemed or remortgaged to a repayment basis with the same or alternative lender.