Interest-only mortgages expiring

Apodemus

adindas wrote: »

We see this sort of things often on MSE especially about taking loan. People fall in debt because of spending more than they could efforts, gambling, etc.

Few are even trying pushing responsibility to their own children ...
Unbelievable how people could use various excuses, blatantly lie even noone will ever believe it.

The chance that this lady does not know what entail an interest free mortgage are next to none. How come she did not know while capable of signing a few mortgages, having few properties including the one abroad.

Next time people could say, I am not aware that if I do not pay my mortgage, my house will be repossessed. And if it the duty of lender to prove that I am not lying.

Yes, she mentioned her son was a co-mortgagee, she also mentioned her Financial Advisor, she talked of her property investment on the continent, she has not taken action in the two years since the original loan expired and she talks of fighting this all the way...

I suspect that there is either more to the story or the BBC is just doing a Daily Mail type of story to encourage outrage. If the latter, then it has clearly had the desired effect!

Mossfarr

moneyistooshorttomention wrote: »

I think that rather proves my point - everyone and their dog wants to be in Southern England.

Absolute rubbish.
Millions of us in the UK have no desire whatsoever to live in the South East.
According to wikipedia only one third of the population of ENGLAND is in the south east, so two thirds are happily living in the rest of our beautiful country.

Apodemus

marksoton wrote: »

The council recoup initial costs through increased council tax revenue in the long term...

Well, again, that depends...

Councils typically only get a minor percentage of their revenue from Council Tax, the bulk of it coming from Government. The initial costs are capital costs, with an on-going revenue consequence in loan charges. There then follows the actual revenue costs of the new households themselves and any maintenance costs associated with the new infrastructure.

Even if the additional cost of each new household was equal to the average cost of all the existing households, there is a need to have the additional Council Tax portion matched in the right proportion by additional central Government block grant. At the moment, that just ain't happening!

exiled_red

I think that a significant number of people gambled that house prices and incomes would keep rising and that 25 years down the line the money that they borrowed at the start would be so small in real terms that they didn't need to worry about saving for it, and now that gamble has backfired fairly spectacularly.

A friend of my parents bought a large house on interest only (that they wouldn't have been able to afford on a repayment mortgage) the idea being that they would live their for 20+ years while they had their kids living at home. The value of the property would keep rising, then when the kids leave home they could sell up repay what they initially borrowed and have enough equity in the house to buy something for the two of them to live in in their retirement. It sounds like madness but they thought this was a good strategy at the time, but it hasn't worked out...

Thrugelmir

exiled_red wrote: »

A friend of my parents bought a large house on interest only (that they wouldn't have been able to afford on a repayment mortgage) the idea being that they would live their for 20+ years while they had their kids living at home. The value of the property would keep rising, then when the kids leave home they could sell up repay what they initially borrowed and have enough equity in the house to buy something for the two of them to live in in their retirement. It sounds like madness but they thought this was a good strategy at the time, but it hasn't worked out...

Interest rates have fallen significantly though in the same time frame. So people have had the option to take action if they so wish to address the situation. May not have resolved the issue entirely. However would improve their financial position considerably by reducing the debt owed.

marksoton

All of which begs one question. Why oh why is personal finance not a mandatory curriculum item at schools/colleges?

I'm 38 so i stand corrected if it now is.

Hell, just do one term on it and tie it in on other subjects like cookery on further terms. Call it what you want, i dunno call it "lifestyle skills".

Why are such basics omitted to the detriment of society as a whole?

patchwork_cat

I do hope they don't pull interest only mortgages just because some people are too stupid. Although they are getting harder and harder to find.

She knew exactly what was going on and she has an eye for the main chance, she is going for a misselling. Too many have had something for nothing without taking any responsibility and she wants her bit.

Thrugelmir

marksoton wrote: »

All of which begs one question. Why oh why is personal finance not a mandatory curriculum item at schools/colleges?

I'm 38 so i stand corrected if it now is.

Hell, just do one term on it and tie it in on other subjects like cookery on further terms. Call it what you want, i dunno call it "lifestyle skills".

Why are such basics omitted to the detriment of society as a whole?

Should be ingrained through culture. My parents and grandparents always reminded me of financial basics. Some where along the road business was allowed to dictate to make a profit. At the expense of human misery and distress. Given this lady was 70. No excuse for her being of the post war generation. Rationing and all.

exiled_red

Thrugelmir wrote: »

Interest rates have fallen significantly though in the same time frame. So people have had the option to take action if they so wish to address the situation. May not have resolved the issue entirely. However would improve their financial position considerably by reducing the debt owed.

True, I know that they have been doing something to remedy it I'm not sure what exactly, but they are aware of the situation and have been for a while as they have admitted how stupid they were originally trying this, but I imagine that there are many people in similar positions who buried their heads in the sand.

jimbog

marksoton wrote: »

All of which begs one question. Why oh why is personal finance not a mandatory curriculum item at schools/colleges?

I'm 38 so i stand corrected if it now is.

Hell, just do one term on it and tie it in on other subjects like cookery on further terms. Call it what you want, i dunno call it "lifestyle skills".

Why are such basics omitted to the detriment of society as a whole?

It isn't, which is really frustrating.

I always spend at least some time each year telling/warning teenagers about different types of mortgages/loans/payday loans/guarantors/insurance etc...