Mortgage Prisoner

Jake368

I'm currently on an Interest Only mortgage with ten years still left to run but because of my age (65) I can't refinance to a Repayment Mortgage. Why is it that the banking industry, the UK government and EU Mortgage Directives make allowances for the way banks accommodate themselves but not customers who also suffered changes to their endowments as a result of the 2008 banking crisis and now will come up short when their interest only mortgages are due? I was refused not because of ability to make the monthly payments nor my credit history which is excellent...no...according to my mortgage advisor it comes down to age. Citizens Advice and various watchdog groups are warning nearly 2000,000 interest only mortgage holders are going to fall short when their mortgage is due ( nearly 60% by 2020 ). This government needs to wake up and start working on common sense policies and stop these "one size fits all" directives otherwise the homeless situation in this country is only going to worsen.

prosaver

Ill put my name down on the council, in ten years time youl be top of the list for a nice place.

Thrugelmir

Why have you waited until now to address the issue? Down to individual borrowers to monitor their own situation. Not for Governments to micro manage peoples financial affairs. Lenders have been writing to borrowers for some time now.

questionss

I assume you're also wanting to increase the term? If not overpay now so you're paying off capital.
I'd overpay anyway and then when/if you do need to sell you'll at least have some equity.

dunstonh

Why is it that the banking industry, the UK government and EU Mortgage Directives make allowances for the way banks accommodate themselves but not customers who also suffered changes to their endowments as a result of the 2008 banking crisis and now will come up short when their interest only mortgages are due?

There were no changes to endowments as a result of the credit crunch.

You have likely been on track to come up short for the last 15 years. A typical shortfall addressed 15 years ago would have cost most people, less than £50pm. Yet in that time, their mortgage repayments have gone down by far more than £50pm. So, whilst you complain about others, perhaps you should look closer to home.

I was refused not because of ability to make the monthly payments nor my credit history which is excellent...no...according to my mortgage advisor it comes down to age.

Not age. Affordability in retirement is the issue. Retirement is usually age based but its not the defining thing. Being able to afford the mortgage beyond retirement is the issue.

Citizens Advice and various watchdog groups are warning nearly 2000,000 interest only mortgage holders are going to fall short when their mortgage is due ( nearly 60% by 2020 ).

That is not an issue for most as the majority of people make plans. Either converting fully to repayment or taking advantage of the savings on their mortgage repayments to overpay to remove the eventual shortfall. Inflation erodes the shortfall as well.

this government needs to wake up and start working on common sense policies and stop these "one size fits all" directives otherwise the homeless situation in this country is only going to worsen.

You need to wake up for your own failures and stop blaming others.

Jake368

Really?...I've got exactly TWO LETTERS from my lender and I've been actively searching since the second one...so what exactly is your point?...when I took out the mortgage my endowment would have easily covered it when due....now....it doesn't. My point is that the banks were bailed out at the expense of taxpayers when the economy tanked in 2008... But it didn't just tank for the banks....it also affected individuals and their endowments, retirements etc etc..I'm not looking for a handout or anything for free....I'm just looking for a little common sense to be applied.....(obviously that premise escapes you :T)

andrewmp

Jake368 wrote: »

I'm currently on an Interest Only mortgage with ten years still left to run but because of my age (65) I can't refinance to a Repayment Mortgage. Why is it that the banking industry, the UK government and EU Mortgage Directives make allowances for the way banks accommodate themselves but not customers who also suffered changes to their endowments as a result of the 2008 banking crisis and now will come up short when their interest only mortgages are due? I was refused not because of ability to make the monthly payments nor my credit history which is excellent...no...according to my mortgage advisor it comes down to age. Citizens Advice and various watchdog groups are warning nearly 2000,000 interest only mortgage holders are going to fall short when their mortgage is due ( nearly 60% by 2020 ). This government needs to wake up and start working on common sense policies and stop these "one size fits all" directives otherwise the homeless situation in this country is only going to worsen.

Pay off outstanding Capital/120 each month.

csgohan4

Jake368 wrote: »

Really?...I've got exactly TWO LETTERS from my lender and I've been actively searching since the second one...so what exactly is your point?...when I took out the mortgage my endowment would have easily covered it when due....now....it doesn't. My point is that the banks were bailed out at the expense of taxpayers when the economy tanked in 2008... But it didn't just tank for the banks....it also affected individuals and their endowments, retirements etc etc..I'm not looking for a handout or anything for free....I'm just looking for a little common sense to be applied.....(obviously that premise escapes you :T)

Are you not responsible for your own investments and endowments. Did you think burying your head in the sand and hoping it would be enough be good enough for you?

Did you not bother to check the status of your endowment and do anything about it?

So you waited and realized now that your in trouble and wanted to blame someone else other than yourself?

Did you not know what an interest only mortgage was when you took one out? You consented and signed, did you not read the paper work????

You can't blame someone else for all your failures. The banking crisis has nothing to do with you taking out an I/O mortgage. You took it and now you won't be able to clear with your endowment, That is your choice.

Westminster

Jake368 wrote: »

I'm currently on an Interest Only mortgage with ten years still left to run but because of my age (65) I can't refinance to a Repayment Mortgage.

Forgive me if I'm missing something here.

However, it appears you don't really need to refinance to a repayment mortgage.

Very roughly, take the current outstanding balance on your mortgage, divide it by the 120 months remaining on the term of your mortgage, and make that amount of overpayment each month.

This is effectively what a 10 year repayment mortgage would be anyway.

If you do this - you will clear your mortgage in less than 10 years as the interest due will reduce each month you overpay. All that without using whatever your endowment is projected to pay out.

Throw some numbers in here: http://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator for detail

antrobus

Jake368 wrote: »

Really?...I've got exactly TWO LETTERS from my lender and I've been actively searching since the second one...so what exactly is your point?...when I took out the mortgage my endowment would have easily covered it when due....now....it doesn't. My point is that the banks were bailed out at the expense of taxpayers when the economy tanked in 2008... But it didn't just tank for the banks....it also affected individuals and their endowments, retirements etc etc..I'm not looking for a handout or anything for free....I'm just looking for a little common sense to be applied.....(obviously that premise escapes you :T)

Well, common sense would dictate that, since the crisis of 2008 has resulted in interest rates falling to previously unimagined lows, that you mortgage is costing you a lot less in interest payments than it otherwise would have done.

What's wrong with the idea that you can use some or all of this windfall gain to either make capital repayments to your mortgage or, at worst, stuffing the money into an interest bearing account somewhere?

dunstonh

My point is that the banks were bailed out at the expense of taxpayers when the economy tanked in 2008...

Irrelevant. Loads of industries have received government support in the past.

when I took out the mortgage my endowment would have easily covered it when due....now....it doesn't.

It was never guaranteed to cover it. Historically, most endowments did result in a surplus but they started to go off track around 2001 with the dot.com crash that followed a sustained period of low volatility. It was the low volatility in the 90s that did most of the damage.

. But it didn't just tank for the banks....it also affected individuals and their endowments, retirements etc etc..

Retirement planning hasnt been affected. Indeed, the volatility of the last 8 years has been great news for retirement planning (except those that perhaps in the last 12-24 months around 2008 who didnt de risk as they should have).

Really?...I've got exactly TWO LETTERS from my lender

The endowment is issued by an insurance company. Not a lender. The statements each year come from the insurer and give you projections and shortfall warnings. The mortgage statements come from the lender and since around 2009, they have issued a warning on them each year about making sure you have enough money to meet the shortfall.

.I'm not looking for a handout or anything for free....I'm just looking for a little common sense to be applied.....(obviously that premise escapes you )

No. it looks like you are looking to blame others for your poor financial management. That same credit crunch reduced your mortgage payments significantly. What have you done with that money that you saved?