Advice on interest only mortgages and how to pay off the captial

FabDee

Hi all

I've got a question from a friend well 2 actually.

If they get a interest only mortgage which is the best way to do it.

1. Just get the mortgage and only ever pay the interest part, but hope that the property in question rises in value and then sell it on, thus paying off the capital and making a profit?

2. Get interest only mortgage and then purchase some sort of policy to run along the interest part to pay it off when selling but before the mortgage term is up. What sort of vehicle to pay off capital would be best.

Its to separate people as well live on there own.

My friend seems to think that the first one is the best option, I don't, they don't seem to care about the capital part.

What advice can you give, I don't think they want to live in the flat for many years up to 3 or 5.

thanks in advance.

F

homer_j_3

you have to consider house prices falling too.

I would always say repayment is best if you have no existing plan in place. If you simply are looking at a monthly cost then you should look at longer terms on repayments.

What vehicles are best are not for me to say but common ones are ISA & Pensions.

You need to seek professional advice tbh. Not something we can easily answer on here.

FabDee

Hi

thanks for information.

As I thought really I am right.

they seem to think that they only need to pay the interest only and sell up and never think about any other payments regarding the mortgage. I think they are living in well house prices always go up and I'll make a profit on property no matter what land. Not always the case I know.

anyway thanks and I'll pass on the advice but I doubt they will heed it. I tried.

F