With nearly a third of households in the UK having a mortgage, mortgage mis-selling is something that impacts millions.
There are various reasons why your mortgage may have been mis-sold to you. If you think your mortgage is unsuitable for your circumstances or you were unsure of the risks involved, you may be eligible for redress.
Here are some of the ways mis-selling can happen when applying for a mortgage:
- Broker fees
Your mortgage advisor will, of course, take a percentage when signing you up or helping you to switch mortgage providers. But did they fail to make you aware of the fees?
Some fees are paid upfront, while others may be included within your payment plan without you knowing. This can create an issue, as you could end up paying additional interest as a result of those extra fees.
Sometimes referred to as ‘Fast Track’ mortgages, a self-certified mortgage is where you don’t need to provide any proof of your income ahead of the deal being made. The problem is that clients aren’t necessarily getting the best or fairest deal and may be unable to afford the repayments.
- Interest-only mortgages
Interest-only mortgages can seem very attractive, as the monthly payments are often significantly lower than other mortgages. The catch is you will need to make one large final repayment, as you only make the payments for the interest during the mortgage.
It’s important that an advisor makes you fully aware of the terms and discusses your plan with you for paying off the cost after the loan has ended. If house prices fall, it is possible home owners can find they have less equity in their homes than they hoped.
- Repayment of the mortgage before you retire
If you are in a situation where you’re not going to be able to repay your mortgage before you retire, there may have been a case of mis-selling at play. Your mortgage advisor should have made you aware that your payment plan would likely outlive your retirement age and made sure you had a plan for this when the time came.
Mortgage advisors are required to have you complete a household budget analysis outlining your monthly income and spending, as well as money left over at the end of each month. If they missed this crucial step, you may have been mis-sold a mortgage you couldn’t actually afford.
Need advice on other types of mis-selling and interested in making a claim? Call 01615 180980 or email [email protected]