Okay, I am not suggesting that any other country’s situation is better or worse just that I have exclusively research the data and information pertaining to the UK. I was shocked to find out that almost one in every seven interest only mortgages have no repayment plans.
This is a ‘ticking time bomb’ as interest only mortgages only in the short-term help where income is and has been squeezed by income constraints and the ever-growing costs. This will lead many to suffer at some point, as the mortgage has to be repaid, so if the person suffers a financial hic-up along that road called life they are at risk of losing their home. If you had a repayment mortgage then mortgage loan companies will consider these more favorably. Let’s assume all goes well in life – what happens when you reach the end of the mortgage term ? Interest only may well be a fools’ economy. If you rely on property values rising then selling the property to pay-off the mortgage then you may be lucky but then again you may not.
So I would expect in this scenario, people maybe forced to downsize or continue to pay large mortgages well into retirement, and I believe that the household income would be tighter.
In addition, many lenders are either withdrawing or introducing stricter criteria for interest-only mortgages. Royal Bank of Scotland is the latest high street lender to make changes to interest-only lending criteria.
Personally, I am an Independent Financial Adviser who specialises in investments, wealth management and tax planning – so only offer debt, finance and mortgage services through colleagues who specialise in whole of market mortgage advice.
To avoid a payment shock when you remortgage and your mortgage planning, it is vital you seek a whole of market mortgage adviser.
Any questions just ask me at welshmoneywiz@virginmedia.com
welshmoneywiz 