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Have an Interest-Only Mortgage and worried about how to pay it?
An Interest Only Mortgage can have many benefits for somebody with large amounts of income or healthy investments to assist in paying it off. However, if you do not fit the discussed description, taking on an Interest Only mortgage could be detrimental to your financial situation.
Standard repayment mortgages are dealt with by paying off the interest on your mortgage each month, as well as some of the capital you borrowed. This scheme allows property owners to slowly pay-off their mortgage before eventually owning the property. Interest Only mortgages are different.
For interest only mortgages only the interest on your mortgage is paid off each month, rather than the interest as well as the capital you borrowed. As a result, unless a borrower manages to save huge sums of money, your ownership of the equity in the property never actually increases.
Due to this, several cases have arisen in which clients have been paying their mortgage month upon month, never own the house, and still have the entire mortgage outstanding at the end of their term.
If you were ill-advised to take an Interest-Only mortgage when it was not suited to you, you may be eligible to make a claim for mis-sold mortgage compensation.
What should your mortgage adviser have checked?
If you were advised to take an interest-only mortgage, your mortgage adviser needed to make various important checks before advising you to enter an interest-only mortgage. Interest-Only mortgages only work if the client has the ability to save or gain the money to pay off the investments at the end of the term. Your mortgage solicitor has a responsibility to check if you will have the ability to do so.
Think that you may be entitled to a claim? Fill out our contact form today and one of the Mis-Sold Interest Only Mortgage Experts will be in touch soon.
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