5 Reasons Your Mortgage Could Have Been Mis-sold
If you have a mortgage, you’ll be just one of around a third of UK households who do. You might not realise it, but mortgages have been mis-sold to potentially millions of homeowners!
But were you mis-sold your mortgage? And could you be owed thousands of pounds by your lender?
Check out the five main reasons for mortgage mis-selling below to find out if you could be owed compensation:
Five reasons your mortgage could have been mis-sold
Did your financial advisor make you aware that you would have to pay broker fees?
When signing you up for a new mortgage or helping you to switch mortgage providers, your advisor will be paid a percentage of the overall loan amount as commission.
You would have paid this fee upfront, or it could have been included in your mortgage repayments without your knowledge. That would mean you would pay additional interest as a result of those extra, undisclosed fees.
If you took out a self-certified or “fast-track” mortgage, you wouldn’t have been required to provide evidence of your income. Often, these kinds of mortgage products were sold to people purely because they attract higher rates of commission. Fast-track mortgages are not necessarily the best deal because they don’t take into account what you can afford to pay relative to your income.
You may have been sold an interest-only mortgage as a way of lowering your monthly repayments. However, interest-only mortgages also leave you responsible for making one large final repayment, as you only repay the interest on the loan during the mortgage term, rather than making any capital repayments.
If your advisor didn’t explain this to you and failed to devise a plan with you as to how you would make the final mortgage payment after the term of the mortgage expired, you could have been mis-sold.
Remortgaging to clear existing debts
If an advisor told you that it would be best to incorporate all your existing debts onto your mortgage, you were probably mis-sold. Although in the short-term, your monthly outgoings would be lower, your long term debt will actually be greater. You’ll also have the extra expense of the interest on the mortgage to repay on top of this.
Mortgage repayment date
Your advisor should have told you that your mortgage would still be in place after your likely retirement age. They should also have discussed with you how you would meet your repayments once you had retired.
Also, your advisor should have asked you to complete a household budget analysis. That process would set out your monthly income and expenditure, as well as showing how much spare cash you would be left with at the end of each month. If this exercise were not carried out, you’d have no idea how much you could afford to repay, so the mortgage was probably mis-sold to you.
If any of the above scenarios sound familiar, you could have been mis-sold your mortgage. To find out if you could be owed compensation, talk to an experienced claims management company today.
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