Originally posted by _V_
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Reform to put millions in interest-only trap
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Originally posted by _V_ View PostAccording the the Guardian:
What the watchdog is banning – and thinking of banning
Amber light (possible ban)
• Mortgages that run past retirement age
Originally posted by Doggy Styles View PostWhat about these:- That would be a forced sale, and is unpleasant for people who are around retirement age
- Not only would you have no home, but little or no equity with which to buy/rent a new one
- The house might not even be worth what you owe on it
That there is another timebomb...
2 - only no equity if no house price rises in the meantime. And if you rented instead of buying in the meantime you still have no equity
3 - might or might not - who knows - I have 50% equity right now - I'm not worried.This default font is sooooooooooooo boring and so are short usernamesComment
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Originally posted by MPwannadecentincome View Posthmm what age is 'retirement age' going to be in 20 to 30 years time?
1 - sure its a risk but you don't wait 'til retirement date before putting the house on the market
2 - only no equity if no house price rises in the meantime. And if you rented instead of buying in the meantime you still have no equity
3 - might or might not - who knows - I have 50% equity right now - I'm not worried.Comment
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Originally posted by MPwannadecentincome View Post1 - sure its a risk but you don't wait 'til retirement date before putting the house on the market
Interest only strategy only made sense in a world of constantly raising house prices.Comment
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Originally posted by AtW View PostHow often people on average in this country move on to sell houses? I think something like every 3-5 years? So this strategy assumes you'll never sell it - even if you lose job and can't find new one without moving.
Interest only strategy only made sense in a world of constantly raising house prices.
Even with limited inflation you're going to get more than your initial loan back when you sell (unless you bought in 2007 and are selling now)"See, you think I give a tulip. Wrong. In fact, while you talk, I'm thinking; How can I give less of a tulip? That's why I look interested."Comment
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Originally posted by Moscow Mule View PostOn average, house prices go up 2% a year (since 1950 something). I don't see any reason for that to change.
That's like to say on average stock exchange goes up.
Or that on average diver breathes normally, but what's good in it if you dive too deep and you can't breath? What if you HAVE to sell house or shares during downturn when pricing is more depressed?
Your statement is only true if you can hold out through downturn - enough people can't, especially overextended people. The only reason house prices did not crash is because rates were dropped to the floor - this will only prolong pain without solving any fundamental issues of overpricing.Comment
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I cant see anything wrong with an interest-only mortgage. It's no worse than renting a property and lining a landlord's pockets.
The FSA are going to pop the housing market bubble singlehandedly. This should be interesting!'Orwell's 1984 was supposed to be a warning, not an instruction manual'. -
Nick Pickles, director of Big Brother Watch.Comment
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Originally posted by Sysman View Post... In the early 90s nobody wanted to talk to you about a repayment mortgage ...
They always would eventually, if you stood your ground, even if they insisted on going through their sales shpiel and proving you'd be 1p a month better off or something.Work in the public sector? Read the IR35 FAQ hereComment
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Originally posted by AtW View PostHow often people on average in this country move on to sell houses? I think something like every 3-5 years? So this strategy assumes you'll never sell it - even if you lose job and can't find new one without moving.
Interest only strategy only made sense in a world of constantly raising house prices.
Every 3 to 5 years is the average? God knows what has happened to all the people over 60 on my street who have been here 30+ years and there are families all over the houses as soon as they 'move on'!
Besides, maybe its 3 to 5 years average in a certain price bracket, I cannot imagine paying stamp duty at 3% + every 3 to 5 years.This default font is sooooooooooooo boring and so are short usernamesComment
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Originally posted by AtW View PostThe only reason house prices did not crash is because rates were dropped to the floor -"See, you think I give a tulip. Wrong. In fact, while you talk, I'm thinking; How can I give less of a tulip? That's why I look interested."Comment
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