Interest-only mortgages expiring

AdrianC

Anybody hear MoneyBox on R4 this lunchtime?
http://www.bbc.co.uk/programmes/b080mhd6#playt=0h00m50s (9min 50)

Christine from Liverpool, who seemed very surprised that her interest-only mortgage would actually expire, and now faces repossession, since she can't repay it.
<boggle>

Apodemus

Yes, heard it and did a lot of shouting at the radio! Thought the interviewers did a pretty poor job of exploring all the options and missed opportunities.

I was also surprised that a flat worth £150,000 in 2004 when the loan was taken out was still only worth £150,000.

csgohan4

Apodemus wrote: »

Yes, heard it and did a lot of shouting at the radio! Thought the interviewers did a pretty poor job of exploring all the options and missed opportunities.

I was also surprised that a flat worth £150,000 in 2004 when the loan was taken out was still only worth £150,000.

Overpriced and probably a new build.

Guess some people don't read their contract,

mrginge

Unfortunately some people are thick.

losgiganteskid

This may be the next miss selling debacle - where the many hundreds of thousands of interest only mortgage holders will try and say "it was never explained to me that I would still owe the amount I borrowed at the end of my mortgage"

adindas

TBH It will take a !!!!!! person not to understand this. But it is extremely hard to believe if anyone capable of taking a mortgage, purchasing a house did not know that with interest only mortgage the capital has not been paid.

Evey year you will get a annual statement which explain how much you still owe to this date.

Keep in mind that anyone in this situation know very well that by playing an innocence game it might help if the case ever go to court.

boliston

quite a lot of mortgsges used to be part repayment and part interest only with and endownment to cover the capital on the interest only part - quite a few policies underperformend leaving people with lump sums to find

AdrianC

boliston wrote: »

quite a lot of mortgsges used to be part repayment and part interest only with and endownment to cover the capital on the interest only part - quite a few policies underperformend leaving people with lump sums to find

This was a 100% interest-only, 0% repayment - with zero endowment or other policy in place.

She had a second property abroad which she was intending to sell eventually - but the crash meant she had zero equity in it.

FBaby

You can't understand the most basic notions of investment, don't invest in the first place.

leveller2911

Seems she gave as much importance in doing her research into buying the property as she would do in buying a mobile phone.........

In a way I do feel sorry for her as she is likely to lose her home but she seems to have thought she could just keep paying IO until she died..

leveller2911

FBaby wrote: »

You can't understand the most basic notions of investment, don't invest in the first place.

I still think many people (correctly) look at buying a house as a home rather than an investment.......... Personally I see a house as a home ,not a way to make money..:)