MSE News: Interest-only mortgage warning
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Renters know that they have no security of tenure, and expect and plan to move on at some point.I do not understand, more people rent than have IO mortgages and yet those with the IO mortgages who almost certainly have some equity are a problem and the renters with no equity are fine.
Can someone explain it to me?
Many "homeowners" on IO mortgages with no repayment vehicle have just been burying their heads in the sand. They really can't see themselves getting kicked out of a house they have lived in for 25 years.poppy100 -
I do not understand, more people rent than have IO mortgages and yet those with the IO mortgages who almost certainly have some equity are a problem and the renters with no equity are fine.
Liars loans etc. Underwriting standards were extremely poor in the run up to the GFC by certain lenders. Was well discussed at the time. HBOS paid Paul Moore to keep quiet. Interesting guy to listen too if you ever get the chance. Record low interest rates has simply deferred the problem.0 -
Thrugelmir wrote: »Liars loans etc. Underwriting standards were extremely poor in the run up to the GFC by certain lenders. Was well discussed at the time. HBOS paid Paul Moore to keep quiet. Interesting guy to listen too if you ever get the chance. Record low interest rates has simply deferred the problem.
Even with no equity, they have probably been renting from the bank cheaper than they would have rented the same property from a landlord.I think....0 -
Deleted_User wrote: »I did read it.
But I don't see why that will stop claims companies charging a large advance fee for their services. They know there are many suckers out there.
and plenty of borrowers looking to blame someone else for their poor financial planning...."You've been reading SOS when it's just your clock reading 5:05 "0 -
The alternatives to paying of an interest mortgage are going to be difficult to find.One market place to try to avoid getting into is the Equity Release /Lifetime Mortgage situation.This alternative has to be closely looked at,especially from the point of what reduction will be made to the future value of your estate.0
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Thrugelmir wrote: »Safe to assume that many borrowers simply have no plans. Slowly rising interest rates aren't going to help either. As will reduce the opportunity to pay down capital.
And now the Bank of England have just said that might not be as slow as first thought.
they said rates would need to rise "earlier" and by a "somewhat greater extent" than they thought at their last review in November.
Economists think the next rate rise could come as soon as May.
http://www.bbc.co.uk/news/business-42986729
How soon before the mortgage lenders follow?
The BBC mortgage calculator site used to have a warning that rates rise and as a guide would also give their monthly repayments at 10% interest.
The IOs were OK if people used the low interest rates to overpay their mortgage/pay off their mortgage early.RENTING? Have you checked to see that your landlord has permission from their mortgage lender to rent the property? If not, you could be thrown out with very little notice.
Read the sticky on the House Buying, Renting & Selling board.0
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