intrest free mortgages

[ukfreehousing]

Hi Guys

we are currently working on a company wich would provide a
service that allows peolpe to borrow money and pay it back
without having to pay any interest on the ammount they borrow.
I would be greatfull if you could tell us what you think of this
concept.

How it works

you join the company by registering and making monthly
contributions of £200.at this point your name is put on a list of
members who are waiting for there houses. when its your turn you
will be notified. you would then go out and look for a
house you like.once youve done that you would borrow the money
from the company and buy your house.you would then pay the company
5% a year of the amount borrowd. once the full amount has been
payed back the house is then transferd to your name.the company
would calculate all the monthly payments you made befor the
purchase of the house an that would be deducted from the amount
borrowd.so essentialy you dont realy pay the company anything
because everything you pay goes back into your house.this is like
a mortgage but you dont pay any interest.

commonly asked questions

Q.How does the company make money
A.it doesnt the point is to help people

Q.How will you cover the cost of running the company
A.we will raise funds from fundraising events,grants an
contributions from sponsors ect

please tell us what you think of this idea


Thank you




john steevens

[DavidT]

Hi John

Maybe it is the way I read it... but to me it sounded just like a scam.

Are people always paying £200 or just until it's "their turn"?

How can that help those later in the line? And doesn't it just help those at the start?

Not given it a great deal of thought to be honest... but I expect it woudl simply be too risky for many people in it.

Maybe there is another way to word it, or use diagrams to better explain it?

David Toohey
The Accountants Circle
Accountancy & Bookkeeping Forums | Accountant & Bookkeeper Blogs | Accounting Templates | Find Me an Accountant

[Dean1st]

im looking for a home as i now am becomming a dad and we need to find somewhere to live. however i really werent jumping up and down at what i just read!

[DavidT]

John

Please don't take our comments as straight criticism... see the constructive side. The last thing we need is people being critical if we are trying something knew and have our hearts in it.

Maybe it's the wording, or maybe just not understanding the concept.

Could you change the wording and describe it better? I think if you make it as clear as possible it might help... but do understand people simply might not like the concept and better finding out sooner than later.

All the best & good luck!

David Toohey
The Accountants Circle
Accountancy & Bookkeeping Forums | Accountant & Bookkeeper Blogs | Accounting Templates | Find Me an Accountant

[ukfreehousing]

Hi guys

Thank you for the responce. i can understand how people can
procieve this as a acam so i will try once again to explain it an
will use an example ammount to illistrate the concept.

john pays £200 a month to the company after 2 years john is told
ist his turn to buy a house.

john buys his house for £100000

the company calculates how much he has payed up to that point
£200 x 12 months x 2 years = £4800

the company calculates how much john ows. £100000 - £4800 = £95200

john now pays 5% of £95200 = £4760 per year

john will pay the £4760 in 10 monthly payments = £476 per month

the remaining 2 months of the year november and december you get
off. the reason for this is most people get into alot of debt over
the christmes period an as we are trying to help people stay out
of debt we think a 2 month break would help.

each year john will be paying £4760 untill he has payed the total
amount he ows this should take 20 years.

The £4760 will go towards helping other members buy there house

As well as this service we offer a full money back service.

the moneyback service would depend on how much money we have
invested in houses.if we can we will pay you back the entire amount
you have payd us in 1 lump sum or we may have to spread it out.
but if this happens you will never get back less than £200 a month
as this was the ammount u payd in.bellow is an illistration of this
concept.

john pays £200 a month for 2 years but after that 2 years he wants
his money back. so john would get £4800 back or 24monthly paments of
£200.this is guarenteed.

hope this helps every1 better understand the concept.

to answer the question of what makes this appealing.bellow is an
illistration wich should explain.

normal mortgage charging interest of 5% interes.

£100000 borrowd at 5% interest for 20 years = £5000 in interest a year

so 5% x 20 years = 100%

100% of £100000 = £100000

£100000 + £100000 = £200000

so you pay back £200000 over 20 years when you only borrowd £100000

this means the bank jus made £100000 from you

with our concept you only pay back what you borrow

or you could look at this in another way compared to the normaly
morgage wich would take 20 years our could essentialy take 10 years
so you have saved 10 yrs of your life.

hope this helps an plz if you have any more questions please
dont hesitate to ask.

Thank you



john steevens

[ukfreehousing]

hi guys

in responce to deean1st. this concept isnt a quick fix its a long term investment and its not ment to buy a mansion for each of our members its ment to help people get on the property ladder.im sure as you start to look around for a morgage and if you do the math you will come to realise our concept is far better than anything out ther and if we have the repsonce we are looking for then the hope is one day there will be little or no demand for the conventional mortgage.

thank you


john steevens

[misch.chief]

To be fair, that seems like a very reasonable scheme, that would be a great help in todays age. I feel it would be very hard to sustain, and the business model may falter, but as far as it being a scam, I feel it isn't and it is nice to see you caring!

I would be prepared to put the money in, providing there was a safeguard against my investment.

Mischa

[Alby]

OK, i can see what you mean, and i think your idea in a perfect world would be great, but have you factored in for defaults, people who for whatever reason cannot/will not pay. In the finance game, it's called risk analysis, and any lender has to factor into their figures a default rate, this rate will depend on factors such as credit history, income etc. This is one of the reasons that subprime loans are more expensive than prime.

[M1ck]

is this a UK based FSA regulated company?