For many, a mortgage is one of the most important loans to take out. Therefore, you must select the right mortgage for you and soften the stress that comes with repayments.
Mortgage advisors and lenders are regulated by the Financial Conduct Authority (FCA) — the body that outlines the rules relating to mortgage advice offered to customers. However, despite the FCA’s rules, financial advisors and lenders often fail to provide the correct advice, leading to individuals left with unpayable mortgages due to personal circumstances.
How Do I Know if I Was Mis-Sold a Mortgage?
Your mortgage provider and lender may have fallen foul of the FCA’s guidelines if they failed to do the following:
- Properly evaluate your circumstance
- Provide information about all your available options
- Provide a recommendation reflective of your situation
Realising your mortgage was mis-sold a mortgage is stressful. Therefore you should seek the services of a claims management company that is capable of processing your claim efficiently. Perhaps the company uses powerful claims management software, is well-reviewed, or has an enviable track record. Whatever the case may be, seek the best advice possible to complete your claim promptly.
Mis-Sold Mortgages in Detail
Let’s look at some of the ways a mortgage advisor may have mis-sold you a mortgage.
Interest Only Mortgages
You may have been a victim of a mis-sold mortgage if every month you were only paying the interest — and your advisor did not inform you how you could repay the mortgage. If the lender or broker did not outline the costs of a Capital and Repayment mortgage compared to the lower costs of an interest-only mortgage, you might also be entitled to claim.
Remortgaging For Debt Clearance
Did your lender advise you that it may be cost-effective if you consolidate all your debts — including loans, credit cards and finance into your mortgage? Did they also explain that — although you might be lowering your monthly outgoings at first — the length of your debt and the overall interest might increase?
If the answer is “no,” you may be a victim of mis-selling.
Household Budget Analysis
When you take out a mortgage, a household analysis is required to assess your monthly income and outgoings. If this didn’t occur when you took out your mortgage, you might have unwittingly over-committed yourself to a mortgage you can’t afford.
You might be the victim of a mis-sold mortgage policy if your adviser suggested you take out an investment to pay off your mortgage — only to discover the payment was insufficient.
Some mortgage products earned high commissions for brokers and so were widely sold. If your broker advised you to take out a “Self Cert” or “Fast Track” mortgage without asking for documented evidence of your income, you might be able to make a claim.
Post Retirement Mortgages
If your advisor failed to consider whether you can afford your mortgage payments after retirement at 65, you could be the victim of a mis-sold mortgage. For instance, if you took out a mortgage for 20 years at the age of 50, did the adviser discuss ways you could repay the mortgage five years after you retired?
High Broker Costs
Were you informed about the broker fees involved in taking out a mortgage? If they were unreasonably high or added to your mortgage without your knowledge, you may be entitled to seek compensation for a mis-sold policy.
What to Do Next
If any of the above applies to you, then you need to act quickly as there are legal deadlines (known as “limitation periods”) that apply to mis-selling claims. It may be challenging to claim for a product taken out over six years ago.
Remember to see the advice and services of an established claims management company to help you get the compensation you deserve.
Author – James Speyer