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MSE News: Warning - if the state helps pay your...
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One thing that does strike me reading some of the stuff about SMI loans not just on here is the number of people who have reached retirement age who still have a mortgage that without state help they cannot afford.
If the govt wanted to make savings on SMI and I'm sure they do! perhaps they could have thought about limiting it to a set number of years, my suggestion would be 10 maximum, that would give people more than enough time to downsize or move to a cheaper area.0 -
skcollobcat10 wrote: »All of them could have taken out insurance to cover them for their mortgage.
Also the ones with endowment mortgages got plenty of time to make other arrangements to pay back the debt but looked the other way.
I have been buying and selling houses since 1977 I was always asked how I was going to complete mortgage Before retirement age.
At one point ME/CFS was considered ( wrongly) a mental illness and insurance companies wouldn't pay out ( so I believe I don't have first hand experience) now it's considered a neurological one. There are probably other illnesses as well.
We've always been asked how we would pay off our mortgages but as soon as the advisor heard where we worked they never bothered selling us insurance. OK years ago and jobs tended to be jobs for life then.0 -
At one point ME/CFS was considered ( wrongly) a mental illness and insurance companies wouldn't pay out ( so I believe I don't have first hand experience) now it's considered a neurological one. There are probably other illnesses as well.
We've always been asked how we would pay off our mortgages but as soon as the advisor heard where we worked they never bothered selling us insurance. OK years ago and jobs tended to be jobs for life then.
At one point was not considered to be an illness that was early nineties and gp's thought it was just people skiving from work.
It wasn't up to the mortgage lenders to hold your hand and make you pay insurance. Your partner could have paid it instead.
I was around when jobs used to be for life as a similar age to you but even I had a couple of professions throughout working life. It's called future proofing.0 -
skcollobcat10 wrote: »At one point was not considered to be an illness that was early nineties and gp's thought it was just people skiving from work.
It wasn't up to the mortgage lenders to hold your hand and make you pay insurance. Your partner could have paid it instead.
I was around when jobs used to be for life as a similar age to you but even I had a couple of professions throughout working life. It's called future proofing.
Canada and the WHO considered it an illness in the early 90s just not in UK possibly something to do with who was advising the government at the time.
It wasn't me who had ME/cfs I was just pointing out that someone who took out insurance and then developed ME the insurance companies wouldn't necessarily pay out because it was considerd a mental illness. There might be other illnesses affected in the same why but I've only heard of it in relation to ME
I can see why some people have problems especially when the insurance company refuse to pay.
I've never expected the building society to 'hold my hand' in fact at the last mortgage application the advisor said it was pointless us taking out insurance because of how secure our income was and the low amount we were borrowing.0 -
we were told by SERCO that the interest rate WILL go up TWICE each yearAlso, downsizing, is NOT an option as where we live, smaller properties command a premiumSo, we are in our mid 60's.What we have worked so hard for all of our lives so as our children would have something after we are gone, it seems, doesn't matter.
Plus why should the taxpayer give you free money so you can leave it to your children? People on housing benefit don't get an allowance to put towards their kids inheritancepoppy100 -
Serco have no idea whether the interest rate will go up or down
So move somewhere else? You're not working, you could move to a cheaper area without having to worry about commuting to work
You're at retirement age already. What was your plan for paying off your mortgage when you stopped working? You've had a lifetime to pay off your mortgage like everyone else
You aren't working, that's the point
Plus why should the taxpayer give you free money so you can leave it to your children? People on housing benefit don't get an allowance to put towards their kids inheritance
If that is the case and they can't offer any advice about this scheme who should people turn to? Oh yes a solicitor or financial advisor. Given that they are at this late stage pushing people into making a decision with only 12 days to go before it starts there is little time to take advice plus who is going to pay for it?
That's not really an option for most people. Would I want to move all the way to say Middleborough where property is cheaper from the leafy suburbs of Surrey? Where do family ties come in to it?
Quite a few of my friends took out interest only mortgages in their late 50's/early 60's - in fact it was pushed as the 'modern' way of moving to a better area. Some have realised that their insurance policies won't cover the debt, some have found themselves out of work due to illness. It's a national disgrace that there were so few restrictions and assessments when banks were doling out these mortgages.
Mortgage interest help was put there in order to avoid people having their homes repossessed. You can't blame householders for the ridiculous increase in equity. The same could be said for the BTL landlords who not only had the interest they pay on the property mitigated by tax relief, but saw a good operating profit on their investment and to top it all up to 100% increase in value of the property. Who was paying this rent paid to these landlords? The government courtesy of Housing Benefit - nice if you had half a dozen of these properties.0 -
But that wouldn't work for someone who is chronically ill / already lives in a cheap area/ has a small property. Maybe there needs to be some exceptions for instance if the SMI payable is less than say half the amount paid for a 1 bedroomed place by HB then SMI continues to be paid or SMI should still be paid for people on ESA ( support group only maybe).
There will be no such thing as one size fits all, but I take your point about relating SMI to LHA0 -
But that wouldn't work for someone who is chronically ill / already lives in a cheap area/ has a small property. Maybe there needs to be some exceptions for instance if the SMI payable is less than say half the amount paid for a 1 bedroomed place by HB then SMI continues to be paid or SMI should still be paid for people on ESA ( support group only maybe).0
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skcollobcat10 wrote: »So you are in your mid 60's and have 71/2 years of mortgage to pay taking you up to 721/2 years old. Surely mortgage lender asked you what means you had to pay mortgage off by 65 years old?
I have been asked from 1977 how I propose to pay mortgage off when I retire. Every time having insurance for critical illness etc and other facilities to pay off mortgage bang on time when I collect state pension.
I am paralysed and a permanent wheelchair user accident at work aged 42 years old, so no excuse not to have roof over my head safeguarded.
It used to be possible to have an interest only mortgage with the capital paid off on the death of the (second) borrower - my parents had one and it worked well. Unfortunately, lenders changed the goalposts after the crash, leaving many borrowers (including us) needing to either remortgage or downsize.
Just because you haven't come across this before, doesn't mean that it is unusual.0 -
Quite a few of my friends took out interest only mortgages in their late 50's/early 60's - in fact it was pushed as the 'modern' way of moving to a better area.
If someone gets out an interest only mortgage in their early 60s I can't help but think they intended for the state to pay for it for the rest of their lives. It would be exactly the same cost to them as buying a property they could afford with the benefits of living in a nicer houe and bigger house price increases to leave to their children.0
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