With nearly a third of households in the UK having a mortgage, mortgage mis-selling could affect millions.
You might not realise it, but your mortgage may have been mis-sold to you for a variety of reasons. If you think your mortgage is unsuitable for your circumstances or you’re unsure of the risks involved, you may be eligible for redress.
Here are five reasons why you may be liable for compensation for mortgage mis-selling.
1. Broker fees
Did you advisor make you aware of the broker fees you’d have to pay? Through signing you up to or helping you switching mortgage providers, your advisor will take a percentage as commission. This tends to be a percentage of the overall loan amount. It can vary from mortgage provider to mortgage provider.
You would either have pay this fee upfront or it may have been included in your mortgage repayment plan without you knowing. The issue with this is you could be paying additional interest as a result of those extra fees.
A self-certified mortgage is when you don’t have to provide evidence of your income. They’re sometimes also referred to “Fast Track” mortgages. These were often sold to people as they paid higher commissions. They don’t necessarily offer the best deal as they don’t take into account your income and what you are able to afford.
3. Interest-Only mortgages
An interest-only mortgage may have been sold to you as an attractive option as your monthly payments would be significantly lower than other types of mortgages. However, they leave you responsible for making a large final repayment, as you only make interest payments for the duration of the mortgage, rather than any capital repayments. Your advisor should have made you aware of this and set out a plan with you as to how you would repay your mortgage after your loan ends.
House prices have fallen in many parts of the country since the financial crisis hit. This means you could have less equity in your home if you needed to sell at the end of your mortgage term, and you may find it difficult to get a replacement deal.
4. Remortgaging to clear debts
If you were advised it would be best to put all your loans and credit cards onto your mortgage as a way to clear your debts, your mortgage was probably mis-sold. In the short-term you’ll have lower monthly outgoings. However, you will actually have more debts to pay off in the long-term. On top of this, you will have the added expense of additional interest to pay back.
5. Repayment of mortgage
Are you in a situation where you might not be able to repay your mortgage before your retirement? Your advisor should have told you if your mortgage would run past your likely retirement age. They should have discussed with you options for meeting your repayments once you are retired.
They should also have asked you to complete a household budget analysis. This would outline your monthly income and spendings, as well as how much money you would have left over at the end of the month. Without knowing your household spending, you could have been mis-sold a mortgage you cannot afford.
If any of these situations apply to you, contact our team of approachable solicitors today for advice and guidance on how to seek redress.