Woodchopper wrote: ↑Thu Sep 23, 2021 8:52 am
... in the UK you can get help paying mortgage interest (but not capital) from the state for mortgage balances up to (I think) about 200k iirc, as that usually works out cheaper than paying the rent via housing benefit for a re-housed family....
In the UK its also possible to get mortgage payment protection insurance which will cover the payments for a period in case of unemployment or sickness.
Is this supposed to be a satirical comment? Ie a way of saying that the protections in the quote you commented on are rubbish?
If not, then you might have misunderstood the PPI scandal.
The main cited complaint in the
PPI scandal was mis-selling, a useful cover-all term which fails to specify the nature of the scam. The main thing that was mentioned, perhaps because it was less shocking than the main offence, was the large rake-offs were being taken (This source cites a court case where
72% of the premium being taken as profit, split between the lender and insurer.
But the real scandal, the reason that there was such large free profit in the premiums, is that
these policies were often useless. Typically Catch-22 clauses were incorporated, written in such a way that once you were ill or unemployed, you were no longer eligible to make a claim for being ill or unemployed. I think I saw an estimate once that total claims paid on PPI insurance were only about 10% of the premiums paid.
Maybe there are now fit-for-purpose PPI contracts. But after what happened in the past, no one will touch them with a bargepole these days. As the first link I cited mentioned, very few new policies have been taken out since 2010.
I was required by my lender in 1988 to take out one of these policies, as condition for borrowing 95% of property value. I knew it for what it was - a way of taking more money from me, in effect a higher interest rate for a higher risk loan. After about four years, I made a partial capital repayment, and cancelled the insurance. They didn't squeak. But most people would have carried on paying for much longer. Also they'd probably have used the free capital to buy a nice car rather than reduce their mortgage exposure. I'd long worked out that paying down mortgage was one of the highest interest rate investments available to typical home-owner with a mortgage.