Should you choose an interest only mortgage ? Page 2

If, however, you discover that you have not been asked to put in place a savings scheme that is

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going to help you repay the principal sum of the home loan on the day that it matures, then you will need to contact your lender and ask them for some advice as to what action you should take next to rectify the situation. You should keep in mind that even if you have to make top-up payments now, in order to get your program back on track, this is far less likely to cause you a significant financial problem the burden of having to pay a massive one-off lump sum (also known as "balloon") on the day the loan matures.

In addition, if you find that your mortgage broker sold you an interest-only home loan without having warned you of what the dangers were having such a scheme without putting in place some form of underlying savings scheme, you should consider talking this through with your Citizens Advice Bureau to see what can be done about this. Here, it is likely that the problems associated with interest-only home ( life insurance ) loans is going to mushroom in the next few years, especially when to true number of first time buyers who may have purchase their new home using this scheme and will likely have had little or no extra money to save comes to light. As such, it is extremely likely that both your lender and you local CAB will be aware of the problem.

The only issue that really remains is whether or not those who have an interest-only home loan without any underlying form of savings scheme in place wish ( life assurance ) to face up to the fact that a very real and serious threat may now exist that the home they have been paying for all of these years may not actually be their one day.