Mortgage mis-selling has been reported in the media as the next PPI scandal.
With 28 percent of UK households currently having a mortgage, the potential impact could be felt by hundreds of thousands across the UK.
If you believe your mortgage isn’t suitable for your needs, it’s possible you have been mis-sold. Here’s what you can do.
What is a mis-sold mortgage?
There are a number of reasons that your mortgage could be classed as mis-sold.
If you could have had a better deal or if you didn’t receive correct advice from your financial or mortgage advisor then you may have been mis-sold.
This could cover:
- If you were sold a mortgage that ends after your retirement date
- If you weren’t provided with clear information on the other mortgage options available to you
- If you were advised to self-certify your income, or overstate your income to get a better deal
- If you were advised to remortgage or switch lenders without a clear understanding of the fees you would incur
- If you were advised to take out an investment designed to pay off your mortgage when it finished, and later discover that you would not be paid out enough
If any of these apply to you, you could have been mis-sold and might be eligible for compensation.
Interest only mortgages
One of the most common types of mortgage that has been mis-sold are interest-only mortgages.
This financial product allows the borrower to pay just the interest on a mortgage over a fixed term. When the loan matures, they are then expected to pay the lump sum of the initial amount.
Borrowers are expected to have a payment plan in place to save enough to cover this lump sum. However, research suggested one in ten may not have the means to pay off this sum, which can result in disastrous financial consequences including negative equity, high fees, and an inability to payback your mortgage.
In many cases, borrowers have reported that they weren’t fully informed about the requirements of their interest-only mortgage, or supported in making a plan for the eventual repayment of the loan. Others weren’t given clear information about the other options available, which might have been better suited to their needs. In these cases, they have been mis-sold and could be eligible for compensation.
All financial organisations in the UK are regulated by the Financial Conduct Authority, which requires them to treat customers fairly, and to ensure that their actions are reasonable.
If a lender or mortgage advisor hasn’t given you clear advice, or has sold you a mortgage that isn’t suitable to your needs, they haven’t treated you fairly or acted reasonably.
Therefore you could have grounds to complain to them and seek compensation. This applies even if you haven’t yet lost money as a result of the mis-selling you.
If they do not deal with your case within eight weeks, you can also complain to the Financial Ombudsman Service. In some cases, a solicitor can litigate against your lender or mortgage advisor on your behalf.
This can seem a daunting process, however there is support available to help people who have been victims of mortgage mis-selling.
If you feel that you’re been a victim of mortgage mis-selling, our expert team can offer support and advice on seeking redress.