Mortgage maturity date ; what to do!?

[pocster]

Hi all,

 

I have a number of buy-to-lets (though what I am suggesting could benefit anyone with a mortgage).

Overpayment to any extent isn't possible (not if I wish to eat) and yet the mortgages end in 15 years (yes I am thinking ahead).

Now, lets assume property prices in 15 years time are the same as today or less (hard to even consider but given the economic climate I think worth the thought).

How do I repay the mortgages?; they might have negative equity; they 'were' my income/pension.

 

Ok, I don't know the state of the market 15 years from now but 'what if'.

 

The solution for me and indeed many many other people might be that the lender is obligated (under some regulation for mortgages taken out at a certain point before the financial collapse) to extend the mortgage by 10 yrs. This would give time (and of course more profit to the lender).

 

This prevents bankruptcy ; and if overpayments were occurring previously then you have another 10 yrs to try and reduce the capital.

 

It was actually my daughter who made me think that some protection for current mortgagees should be in place. She has a mortgage and 'assumed' the value would increase substantially 20 yrs down the line. But then she questioned if it hasn't what should she do? - assuming I have the answer!

 

It would seem that the financial mess has been created nothing can be done about that. But the way forward can be made easier by giving time. It took 3 decades to get here, why not 3 decades to undo the mess.

 

I noticed the council of mortgage lenders don't accept comments from us poor consumers.

 

Anyone's views welcome.

 

Cheers

[interestrateripoff]

Ludwig von Mises describes the endgame brought on by reckless expansion of credit: "There is no means of avoiding the final collapse of a boom brought about by credit (debt) expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit (debt) expansion, or later as a final and total catastrophe of the currency system involved."

 

South Sea Bubble, Tuplip mania, Railway mania.

 

I'm afraid we have been in a housing bubble prices are going to correct.

 

 

http://www.marketoracle.co.uk/Article8080.html

Edited March 4, 2012 by interestrateripoff
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[pocster]

Well,

I tend to agree that 'Japan' style is how we are going. Of course this is a double edged sword!. Assuming interest rates remain low (although greedy Halifax have increased their SVR already!!!); then overpayments may be possible. So you have a mortgage of 200K; you overpay £100 a month for 10 years - great. Then the mortgage comes to maturity the property is worth the same as today or possibly less. You are pretty much stuffed *unless* it becomes law the mortgage 'term' is extended. I know you could argue it's 'kicking the can' ; but is it if you are overpaying? - equally the extra years may (or may not!) see the property rise in value.

Oh what to do!

 

Cheers