Got a mortgage? Make sure you pay attention!!

tooldle

LHW99 said:

tooldle said:

I didn’t think it was possible to have interest only ( no repayment vehicle) all those years ago. Even in the 90’s evidence of a repayment vehicle was required for an interest only option. If my memory serves correctly interest only without a repayment vehicle became common in the 2000’s.

There were interest only mortgages being sold with endowment policies / unit linked investments in the 1980's. However, when endowments began missing targets, many people sold them / made them paid up, or gave up with the unit-linked policies.That left interest only morgages which either had no repayment vehicle.

Also where the policies / investments only paid a part of the debt after 25 years, the outstanding amount remained as a debt with the lender.

Presumably this happened, and the couple hadn't realised that the rest of the debt remained as interest only, rather than ensuring it went onto a repayment basis.

Ah, I could see your second scenario happening. We had an endowment and i recall a few hoops in removing its assignment to the mortgage company, letters back and fore etc. 

lookstraightahead

Lots of people aren't interested in their mortgages (present company excepted) and have no idea what their payments are for.

Dustyevsky

Typical 'scare the pants off old folk' story from a rag notorious for it.

As our founder states, “My hope is that with a 40-year property, its house price would have gone up many many many more times than the mortgage is worth, so hopefully the mortgage will be relatively small compared to what the house is worth."

Under 40 years ago, we bought a semi for £70k, and similar ones are currently selling for around £600-650k.Of course these 'unfortunate' folk might live somewhere less salubrious, but the price paid initially will no doubt reflect that too.