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View Full Version : Are people inherently stupid when it comes to money?



SimonMac
30th October 2016, 14:55
Listing to Money Box and the story is an old dear with an interest only mortgage that has been told she needs to repay the capital, she is up in arms that the bank are not allowing her to stay in the property till she dies paying the just the interest, after which they can sell the property.

I know everyone is anti bank, and how they are picking on the little people, but it was refreshing to hear that the presenter trying to give her the opportunity to be a sob story, but at every turn it seems the bank has been doing decent things, giving her more time, writing in big letters on statement that she is only paying back the interest and she will need to find the capital.

Please tell me, as I hope and suspect, that the extreme cases are the ones that get out in the public, and that editors/producers are just trying to make the banks look bad and running out of examples of them doing so.

mudskipper
30th October 2016, 15:32
Shall we have a whip round?

vetran
30th October 2016, 15:56
Yes mostly.

Cirrus
30th October 2016, 16:05
It is sad.

It's sad that people are stupid. They can't understand that life is what it is and not some fantasy world they want to live in.

Even more than that, it's sad that the media take the side of such idiots. In fact they could serve a useful purpose by running exactly the same stories excepting finishing up by saying "Don't make the same ridiculous mistake as this self deluded old codger"

It affects us because lifetime mortgages make total sense (and would provide a ton of contract positions to implement) but the banks are too frightened of them because of the PPI/whatever happens we'll fine the banks mentality.

It's gradually changing however.

NotAllThere
30th October 2016, 17:34
She's not totally in la la land. There are mortgage products that do exactly that. You just pay interest and they take the house when you snuff it.

In Switzerland, mortgages are inherited. It's repayment that's unusual (because interest payments are tax deductible against the wealth tax).

vetran
30th October 2016, 17:57
She's not totally in la la land. There are mortgage products that do exactly that. You just pay interest and they take the house when you snuff it.

In Switzerland, mortgages are inherited. It's repayment that's unusual (because interest payments are tax deductible against the wealth tax).

If she had been sold such a product and the bank had changed it then maybe you would have a point.

Its like complaining you should have a Ferrari when you bought a Lada.

NotAllThere
30th October 2016, 19:08
Oh I see - she was supposed to repay it at retirement. Silly bint then.

RSoles
30th October 2016, 19:28
I got the impression she was trying it on.
Playing moneybox to promote her 'Big bad bank vs the poor wee woman' story.

greenlake
30th October 2016, 19:51
Its like complaining you should have a Ferrari when you bought a Lada.

http://c1.staticflickr.com/3/2340/2209741640_bcbaa7a113_b.jpg

mudskipper
30th October 2016, 20:37
Oh I see - she was supposed to repay it at retirement. Silly bint then.

A mortgage vendor should ensure that the buyer understands what needs repaying and when, and has the appropriate financial arrangements in place to make that repayment.

Sounds like misselling to me.

eek
30th October 2016, 20:45
A mortgage vendor should ensure that the buyer understands what needs repaying and when, and has the appropriate financial arrangements in place to make that repayment.

Sounds like misselling to me.

I don't think it is. It would have been sold with a repayment plan attached and then the mortgagee would have cancelled the repayment mechanism.

vetran
30th October 2016, 20:47
A mortgage vendor should ensure that the buyer understands what needs repaying and when, and has the appropriate financial arrangements in place to make that repayment.

Sounds like misselling to me.

seriously?

people need to take some responsibility for their stupidity.

Its not like its complicated. You borrow £XXXK and then pay half the amount others do you do need to understand why. Its not like they are adding 10% on top of a £50/year insurance payment.

mudskipper
30th October 2016, 20:56
I don't think it is. It would have been sold with a repayment plan attached and then the mortgagee would have cancelled the repayment mechanism.

If that were the case, then fair enough - although she may have fallen for the 80s/90s endowment misselling. Is there any evidence that that was what happened?

mudskipper
30th October 2016, 20:57
seriously?

Semi-serious

It really does depend on what she was told when she was sold her mortgage.

eek
30th October 2016, 20:59
If that were the case, then fair enough - although she may have fallen for the 80s/90s endowment misselling. Is there any evidence that that was what happened?

Nope but even if it was an missold endowment she would have covered most of the loan....

vetran
30th October 2016, 21:00
Semi-serious

It really does depend on what she was told when she was sold her mortgage.

partially but such a contract does require a certain investment of intelligence.

If she is mentally sub standard then possibly.

SueEllen
30th October 2016, 21:31
Nope but even if it was an missold endowment she would have covered most of the loan....

True.

I know people with unsold endowments and they either have or nearly have paid their mortgages off.

She probably remortgaged and while they where telling her she needed to have an investment vehicle to pay off the mortgage ignored them.

After the pensions then endowment mis-selling financial institutions and brokers have been careful to tell you stuff a minimum of 4 times while taking out the mortgage.

BigRed
30th October 2016, 21:40
I feel the same about extended warranties and PPI. Surely people understand that insurance companies are there to make money? a little bit of savings to cover unexpected costs will save you a fortune in the long run.

SueEllen
30th October 2016, 21:50
I feel the same about extended warranties and PPI. Surely people understand that insurance companies are there to make money? a little bit of savings to cover unexpected costs will save you a fortune in the long run.

PPI was sold to people who said "No". They got the paper work and found it had automatically been ticked for them.

Other people were told they couldn't get the loan or credit card if they didn't agree to PPI.

Complaining against financial institutions can be a lot of hassle as I learnt last year with Nationwide.

They try all sorts of tricks to not to deal with your complaint from lying to pretending they don't receive your complaint letters to accusing you of being abusive. Most people don't record phone calls so can't prove they behaved themselves and don't send complaint letters by recorded delivery.

In regards to extended warranties I have said to companies for the past few years something along the lines off "So you are admitting the product you have made/sold has a fault with it?" Oddly they they stop trying to sell the warranty to me...

northernladuk
30th October 2016, 22:36
I heard this on R4 moneybox repeat tonight. She was very well spoken and confident. I thought it was an actor at first. Some of the stuff she said just didn't make sense though. She expected them to give her a repayment mortgage on a lower rate so she could pay the capital off. Just give her it. No lending criteria or affordability checks. That alone shows she's just not got it.

ASB
31st October 2016, 07:54
What were her repayment conditions on her actual loan?

The first io mortgage i had 30 ish years ago had no term and was, in fact, silent on capital repayments. In those circumstances it is reasonable to be aggrieved on a repayment demand.

Of course my current io, which is offset, is explicit.

OwlHoot
31st October 2016, 10:05
partially but such a contract does require a certain investment of intelligence.

If she is mentally sub standard then possibly.

I didn't listen to the program, but possibly her hubbie organized the mortgage originally. So speculating on her intelligence or otherwise may be irrelevant.

As someone has already pointed out, in so many words, what is to stop her getting equity release and repaying the mortgage out of that?

vetran
31st October 2016, 10:14
I didn't listen to the program, but possibly her hubbie organized the mortgage originally. So speculating on her intelligence or otherwise may be irrelevant.

As someone has already pointed out, in so many words, what is to stop her getting equity release and repaying the mortgage out of that?

it will cost her more?

eek
31st October 2016, 10:15
it will cost her more?

Because her daughter owns some of it....

BrilloPad
31st October 2016, 10:29
She sounds stupid.

Can you post her contact details? Plan B is to fleece the stupid...

Old Greg
31st October 2016, 10:36
She sounds stupid.

Can you post her contact details? Plan B is to fleece the stupid...

How did that contractor loan scheme work out for you?

LondonManc
31st October 2016, 10:42
How did that contractor loan scheme work out for you?

He accidentally loaned himself a tenner and went bust on the interest.

d000hg
31st October 2016, 11:38
She's not totally in la la land. There are mortgage products that do exactly that. You just pay interest and they take the house when you snuff it.

In Switzerland, mortgages are inherited. It's repayment that's unusual (because interest payments are tax deductible against the wealth tax).

I was going to say what some here dismiss as "stupidity" is exactly how things may work in other countries.

It's not primarily a question of stupidity, it's a question of poor education. This stuff isn't (or at least wasn't) taught at school as part of basic money education which would be more useful than learning P=IV and the capital of Australia.

SueEllen
31st October 2016, 11:59
I was going to say what some here dismiss as "stupidity" is exactly how things may work in other countries.

It's not primarily a question of stupidity, it's a question of poor education. This stuff isn't (or at least wasn't) taught at school as part of basic money education which would be more useful than learning P=IV and the capital of Australia.

What do people have parents for?

You can't make schools teach everything otherwise they get accused of teaching leftish or rightish views.

d000hg
31st October 2016, 13:21
What do people have parents for?

You can't make schools teach everything otherwise they get accused of teaching leftish or rightish views.
Basic money management like how to create a budget, how borrowing and saving work, what a mortgage is, should be mandatory. You could say the parents should teach the children how to read and write and do simple arithmetic; more parents know those things!

All these financial things can very easily be covered as part of the existing curriculum as it's basic arithmetic, you just apply the context. Relying on parents who may not know themselves just perpetuates the issue.

I'm not saying we should have GCSE questions "Tarquin's fathers earn £34k collectively, if they get 99% mortgages how many BTLs can they buy" just basic, useful skills. Hell if you think education should focus on the more pure academic stuff then teach it along with woodwork and IT as a namby pamby life skill module!

SueEllen
31st October 2016, 18:29
Basic money management like how to create a budget, how borrowing and saving work, what a mortgage is, should be mandatory. You could say the parents should teach the children how to read and write and do simple arithmetic; more parents know those things!

All these financial things can very easily be covered as part of the existing curriculum as it's basic arithmetic, you just apply the context. Relying on parents who may not know themselves just perpetuates the issue.

I'm not saying we should have GCSE questions "Tarquin's fathers earn £34k collectively, if they get 99% mortgages how many BTLs can they buy" just basic, useful skills. Hell if you think education should focus on the more pure academic stuff then teach it along with woodwork and IT as a namby pamby life skill module!

Oddly it was actually taught in my schools but not in one subject area.

So it was taught in Maths, History and Personal Development as we had a bank come into our school.

However if you asked anyone apart from those in the top set with me they would claim they weren't taught anything about money management in school.

So I expect other schools do cover it.

SimonMac
1st November 2016, 09:07
She sounds stupid.

Can you post her contact details? Plan B is to fleece the stupid...

I thought the the ExMrsBP's had already worked that plan faultlessly!

vetran
1st November 2016, 10:06
I thought the the ExMrsBP's had already worked that plan faultlessly!

:laugh:laugh

naughty!

not as well as this one

Mother awarded family's entire £550k estate in 'extraordinary' 100pc divorce ruling - Telegraph (http://www.telegraph.co.uk/news/uknews/law-and-order/11736479/Mother-awarded-familys-entire-550k-estate-in-extraordinary-100pc-divorce-ruling.html)

though to be fair he does seem a very bad boy.