Interest only mortgages

Intriguing reply?

May I ask the on what basis - not pay the loan at all?

Duncan

"Duncan" wrote

Question: do you expect to live in the house until you die?

If so - just let your beneficiaries sell the house, pay off the loan, and benefit from the equity - after you die.

If not - eg you intend to move when you retire - then when you do retire, sell the house, pay off the loan, move to a (smaller?) house and live the rest of your years.

What's the problem?

The problem is that by the time he retires the sale proceeds may not be sufficient to pay off the loan, and his pension may not be enough to rent a smaller one. But that's OK, all it means is that he'll have to revert to plan A, and die in house 1 instead of house 2.

Another potential problem is that the lender might want the money back before he dies, i.e. even IO loans have a term, and whether a lender is amenable to extending it to be open-ended depends on what they feel like. Probably OK but only if (a) pension is enough to pay loan interest and (b) equity doesn't go low enough to make the lender nervous.

In message , Duncan writes

So long as you keep paying the interest, then I dont see why it should be automatically assumed that you should ultimately repay your mortgage. In fact, in later life there might be no need even to cover the interest, just let the loan roll up.

Wont work for everybody admittedly, but there is no reason to assume that mortgage must be repaid prior to death.

In message , Ronald Raygun writes

I dont know of a case where an IO lender has demanded repayment after 25 years (or whever). So long as you keep meeting the payments they are happy.

Everyone says to steer clear of endowments these days, yet banks still offer interest only mortgages. If not endowment policies then what is the best way of investing to pay of the mortgage? Or is the best advice simply to get a repayment mortgage?

In message , tmellors writes

Current accounts Deposit accounts, High interest accounts Horse racing Betting on Horse Racing The Pools Lottery Premium Savings Bonds Aunty Mary will eventually dieing ISAs Pensions One of those nigerian scams actually coming off in your favour Passing GO 4356 times Shares Spread Betting Hedge Funds Property speculation Pyramid selling Becoming an MP Writing 'Delias Guide to Cookery Book 6' before Delia does Getting away with coughing.

er,,,,, thats it.

Oh, sorry forgot.....

A Repayment Mortgage.

ROTFLOL

Better enrol on a landscape gardening course first.

Anyone want to buy Cheops?

"Ronald Raygun" wrote

Only if they come with a nice side-order of cod!!

In message , First Surname writes

In UK, there are two elements to house prices. The price of the land, and the price of the house.

It is mostly the land price that has suffered the recent boom, not the cost of building a house upon that land.

"First Surname" wrote

So, the house that granny/grandpa bought in 1920 for a few guineas, should now be worth less than that - just a couple of pennies? I wouldn't have thought so! [Even just keeping pace with inflation would be an *appreciation*, not depreciation.]

But how much has been spent on maintenance in that period? If it's nothing the house is probably derelict ...

In message , Stephen Burke writes

Not THERE'S an idea....... :-)

"Stephen Burke" wrote

Even if it were derelict I'd expect the *land* to have appreciated in value ...

Let's take a longer view in time. You can buy a castle with one euro. That kind of gorgeous castle just needs a little bit of refurbishment. In this example the depreciation has gone a step too far. I might think that walls and even a pile of rocks is more valuable than one euro. Maybe there was an overproduction of castles in the past and that sector of real estate business is still in recession.

There's usually some condition that it has to be retored or maintained.

It's like buying a football club for a few pounds. You alos have to guarantee several million pounds of debt in the insolvent club.

Peter Saxton from London snipped-for-privacy@petersaxton.co.uk

I think prices of isolated, usually, Scottish, castles are cheap but a lot of money needs to be spent and then their resale value is less than the repairs. I dont think they are thought of as an investment.

All I have said is based on very little experience!

Peter Saxton from London snipped-for-privacy@petersaxton.co.uk

"Stephen Burke" wrote

I understand that in Liverpool more recently, the mass exodus has turned-round -- and now house prices have shot up many times over since the