There are a variety of reasons why you could be entitled to a claim regarding a mis-sold mortgage, due to a vast amount of people being wrongly advised when investing in a mortgage.
The implications of a mis-sold mortgage have resulted in many people having numerous debts, which they cannot afford to pay back.
If you are not sure whether you are entitled to claim for a mis-sold mortgage, here are 7 reasons why you could have a claim:
Have you been sold an interest-only mortgage?
The main issue with an interest-only mortgage is that it appears attractive to homeowners, as they were able to borrow without showing lenders their method of debt repayment. They were also advised that monthly payments were a lot lower than other mortgage options.
Unfortunately, many people were not informed that an interest-only mortgage requires a significantly large final payment, unlike other mortgages which require capital repayments throughout the duration of the mortgage.
It is also now extremely hard to borrow on an interest-only basis, which is why many people are now struggling to repay their mortgage.
You should have also been advised that if necessary, you may need to switch to a repayment mortgage in order to pay off your mortgage debts, if not then you have most likely been mis-sold.
Did you pay broker fees?
A broker fee is the amount of commission paid to a mortgage broker or advisor appointed to assist you in finding
a secure mortgage loan. This fee can either be paid upfront or would have been included in your mortgage repayment plan.
The issue with broker fees is that many people were not aware that additional interest would be added on to the original broker fee, which means many people are paying back a significantly high amount for their broker fees.
Another problem with broker fees is that many people were ill-advised on why they were paying broker fees, therefore cannot understand why they have so much debt.
Were you advised to get an endowment policy?
An endowment policy is a long-term investment which includes life insurance coverage.
Many people were advised to take out an endowment policy in order to pay off their mortgage when it ended. Unfortunately, a lot of endowment policy holders have discovered that their endowment did not cover the full cost of their mortgage.
Were you told to re-mortgage to clear your debts?
Re-mortgaging involves switching to an alternative mortgage deal with your existing mortgage lender or a completely different provider.
Re-mortgaging allows you stay to in the same house when your mortgage has come to an end, whilst ensuring your property is still secure. It can also help you reduce your interest rate on your mortgage or consolidate your debts.
The issue with re-mortgaging is that many people are advised to do so in order consolidate their debts on to their mortgage and clear their debts. At first this may save you money through lower monthly payments. However, on a long-term basis you will have a lot more debt to pay back.
Did you complete a household budget analysis?
A household budget analysis should have been conducted by your mortgage advisor in order to outline monthly inbound and outbound payments, which allows you to establish your monthly budget.
If an analysis was not conducted then your advisor would not be able to analyse your household expenditure, resulting in a mis-sold mortgage.
Are you unable to repay your mortgage before you retire?
Many people have found themselves in a predicament where they are not able to repay their mortgage before they retire.
The problem with this is that they may have been ill-advised on their mortgage, as they should have been informed about whether their mortgage repayments would extend past their retirement. If repayment is expected to extend past retirement, then the mortgage advisor should have discussed this and implemented a plan for post-retirement repayments.
Were you offered a self-certified mortgage?
A self-certified mortgage is a type of mortgage which does not require proof of income and therefore fast-tracks the mortgage application.
Many people were advised to take out this type of loan in order to self-certify their incomes if they did not have the proof. However, in some instance mortgage brokers advised people who were actually employed or had proof of income to take out a self-certified mortgage, selling it as a faster method.
The issue with a self-certified mortgage is that they usually have a much higher interest or reversion rate, which is a significant disadvantage to the homeowner.
Anyone who can provide proof of income should never be advised to take out a self-certified mortgage, if you have then you have been mis-sold.
If you have found yourself in any of these situations, then you may be eligible for a mis-sold mortgage claim. For further information on mis-sold mortgages get in touch with us today via our website, email or call us on 0800 756 3986.