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Very long or interest only mortgages
- Thread starter Thirsty
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Gordon Gekko
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Mortgage protection is relatively cheap because the outstanding balance and the associated cover are declining over time. It is materially more expensive if the balance is remaining high.
And just as an aside, it’s wrong to say that policies don’t pay out for suicides; some do.
And just as an aside, it’s wrong to say that policies don’t pay out for suicides; some do.
Thanks, Gordon
There is a good chance a person taking out a lifelong mortgage policy would be on a budget I suspect the ones including paying out on suicide is not the cheapest and looking for suicide included in the policy is the last thing on their mind,
an interest-only mortgage policy until death the balance insured stays the same,
Mortgage protection is relatively cheap I agree, My understanding is a lifelong insurance policy backing an asset to be paid out after death to clear a mortgage is very expensive, some have clauses that increase the premium once you reach a certain age,
If you have access to a lifelong insurance policy that pays out the amount insured at 35 years of age on death at age 76
and is not reviewed and increased after lets saw 65 years of age I would be interested in knowing about it,
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At the risk of being repetitive - the proposal is not for interest only for the entire mortgage period.
I did not explain myself well on a few posts
I said the amount insured at 35 years of age in other words if you took out a mortgage of 600K and took out lifelong insurance of 300K to payout on death still enforce after 65 years old is not cheap,
I would also like to know from posters in the know, not your good self is their cost-effective life policies out there that do not have a provision in the small print raising the premium cost once you reach retirement age,
I have seen sight of such a policy where the underwriters review it every few years and no one can tell what that increase might be until you reach review age once over 65,
let's say you were the ripe old age of 95 and underwriters were reviewing it for another five years chances are you would die of a heart attack straight away when you see the price for another five years, and paying upfront before reaching 65 for the privilege,
If you are not careful you can waste a lot of money buying expensive lifelong policies all you are buying is the right not to ask about your health at the review date, and no certainty when it comes to cost,
Gordon is the only one in the know to add anything of interest I was expecting others in the life business to
post about the cost-effective products on offer I am not aware of,
I said the amount insured at 35 years of age in other words if you took out a mortgage of 600K and took out lifelong insurance of 300K to payout on death still enforce after 65 years old is not cheap,
I would also like to know from posters in the know, not your good self is their cost-effective life policies out there that do not have a provision in the small print raising the premium cost once you reach retirement age,
I have seen sight of such a policy where the underwriters review it every few years and no one can tell what that increase might be until you reach review age once over 65,
let's say you were the ripe old age of 95 and underwriters were reviewing it for another five years chances are you would die of a heart attack straight away when you see the price for another five years, and paying upfront before reaching 65 for the privilege,
If you are not careful you can waste a lot of money buying expensive lifelong policies all you are buying is the right not to ask about your health at the review date, and no certainty when it comes to cost,
Gordon is the only one in the know to add anything of interest I was expecting others in the life business to
post about the cost-effective products on offer I am not aware of,
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Brendan Burgess
Founder
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But Kinn
Your whole argument is flawed. You don't need life insurance at that age.
The whole idea is that the house would be sold and the mortgage repaid.
The purpose of Mortgage Protection Insurance is for someone who has dependents living in the house who lose their main earner and could not pay the mortgage.
Brendan
Your whole argument is flawed. You don't need life insurance at that age.
The whole idea is that the house would be sold and the mortgage repaid.
The purpose of Mortgage Protection Insurance is for someone who has dependents living in the house who lose their main earner and could not pay the mortgage.
Brendan
If you read post no 1 again
you will see the suggestion is to clear the mortgage using a lifelong policy,
nowhere does the post say anything about selling the house to clear the mortgage,
and to be honest what mortgage lending bank in Ireland would go along with your suggestion,
there is a possibility of running into all sorts of problems,
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back to the OP:
What's so bad about paying interest only on your home loan, if your life assurance will clear the capital when you die?
Or if that doesn't work, the mortgage can be inherited along with the property.
And yet it's done elsewhere.
The single biggest barrier, in my view, and it's nothing to do with banking, it's our legislation; is that it's ridiculously difficult to regain possession of a property when a loan defaults.
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Thirsty
We need to keep things simple I am all for a long fixed interest rate mortgagrs paid off before retirement,
I am also for a second-tier pension and AVC, I am retired and have both, I had a fixed interest rate mortgage before I retired, it wasn't the cheapest option but it allowed me to provide for my family to pay my mortgage off before I retired and provide for my retirement once you pass forty you don't feel retirement coming around,
lots of life Insurances past 65 have small print saying something like subject to underwriters review,
might not seem important at forty, all I will say is the same cannot be said once you reach 65,
all I will say is if you have the wrong one and intended to use it to pay off your mortgage at death is your snookered,
again all I will say I was out of work in the mid-1980s for around six months I was not the only one in the estate we lived in there were several layoffs no one had to default on their mortgages for the very reason back then like other EU countries you got over 75% of your wages while on layoff,
If your OH had a full or part-time job you were accessed on your own prsi, if you got to work a few days you took it to extend the length of your entitlement,
at the time of the last crash,I was lucky enough to work in a business where our orders increase in a downturn,we make parts that ware out people refurbish requiring more spare parts rather than buy new units in a downturn,
We would have taken on extra people to meet this demand, I came across people who had been off work for a while
resulting in not being able to meet their mortgage repayments, none wanted to be in that position some because there OH had a low paying full or part-time job leaving them receiving the same amount as if they never worked a day in there life, they were not used of being in that position,
I finished up with the job of accompanying a few of them up before a court register, the people representing the banks were completely out of there depths they hadn't any records of any correspondence between a mortgage holder, and the banks,
I could see the court register was not happy I could see she knew they hadn't a clue what the up to date position was,
When good people like these come up before a judge he/she already know they get a raw deal when out of work I can see where the reluctance to issue eviction notice came from I suspect most posters from where they are sitting don't understand how all this all came about,
so we have to live with the best we can,
isn't it strange the same politicians who were calling for unemployment payment to be cut back around 1980s were the same politicians giving out about how hard it is to get an evection notice years later and blaming the courts for their own shortsightedness,
so says all of us
I don't want to go off-topic
yes the system users will always spot and take advantage of loopholes in the system
I hope the covid payment will show when people have half enough to pay their mortgage or rent they will,
as the person said to me up before the register if I have half enough to eat and my family can keep a roof over their head I am happy,
yes the system users will always spot and take advantage of loopholes in the system
I hope the covid payment will show when people have half enough to pay their mortgage or rent they will,
as the person said to me up before the register if I have half enough to eat and my family can keep a roof over their head I am happy,
Life long interest only mortgages are a great idea.
The borrower has security of tenure with only the interest to pay.
The bank has forseeable income with little future cost.
Properly organised with the appropriate insurance and repossession arrangements in the event of default in place I am sure it would be very popular.
So popular that house prices might rise as high as they are in Switzerland.
Not to range into the dangerous house price discussion area; but all these things are relative.
As I mentioned previously - at one point Tokyo had three generation mortgages.
Was that when a 3 bed semi in downtown Tokyo was the price of an airplane, or whatever the headline was at the time.
not sure 3 bed semis are typical of the architecture in central Tokyo, but yes I believe the prices were sky high (pun intended!
)Here it is from the New York Times
'At the market's peak in 1991, all the land in Japan, a country the size of California, was worth about $18 trillion, or almost four times the value of all property in the United States at the time.'
www.nytimes.com
'At the market's peak in 1991, all the land in Japan, a country the size of California, was worth about $18 trillion, or almost four times the value of all property in the United States at the time.'
Take It From Japan: Bubbles Hurt (Published 2005)
FOURTEEN years ago, Yoshihisa Nakashima looked at this sleepy suburb an hour and 20 minutes from downtown Tokyo and saw all the trappings of middle-class Japanese bliss: cherry-tree-lined roads, a cozy community where neighbors greeted one another in the morning and schools within easy walking...