If you were advised to buy an investment to pay off your mortgage when it was over, did you find out later that you would not be paid enough? Read also : My in-laws are underwater on their mortgage and their home is in disrepair. Should they just walk away and move in with us?.
If so, it could constitute a poorly sold policy. Read our guide to mis-sold endowments if you think this might apply to you.
Interest Only Mortgages
If you only paid the interest on your mortgage each month, the advisor should have told you how you would pay off your mortgage after it ended. This may interest you : I think I’ve been mis-sold my mortgage, what can I do?.
If your broker or lender hasn’t discussed this with you or given you examples of the cost of a principal and repayment mortgage versus the lower costs of an interest-only mortgage, then it would be a good idea. example of abusive sales.
Also, have you been told that you may need to replace your mortgage with a repayment mortgage rather than relying on rising house prices? Otherwise, it could also constitute a mis-sale.
Use our sample letter if you want to complain about mis-selling an interest-only mortgage.
Remortgaging to clear your debts
If you were looking to consolidate your debt, were you told it would be cheaper to put all your loans, credit cards and financing on your mortgage? On the same subject : I think I’ve been mis-sold my mortgage, what can I do?.
Otherwise, you could swap short-term debt for long-term debt by adding it to your mortgage.
Did the advisor explain to you that while you will initially reduce your monthly expenses, you may well lengthen the term of your debt and significantly increase the amount of interest you would pay?
Otherwise, it could be considered a bad sale.
Complain to your supplier with our sample letter if you were encouraged to remortgage to clear your debts.
Household budget analysis
Have you been asked to do a household budget analysis? Have you been asked what your monthly income is and what your monthly expenses are?
Have they worked out with you how much money you have left each month after paying all your bills, that is, your disposable income?
If it didn’t, you may have unknowingly over-committed yourself to a mortgage you couldn’t afford.
Self Certification mortgages
Have you been asked to provide proof of your income, such as payslips or verified accounts that could prove your income?
If not, were you encouraged to take out what is known as a “Self Cert” or “Fast Track” mortgage, where you did not need to prove your income?
These mortgage products paid much higher commissions and were very popular among some brokers for this very reason.
If this applied to you, your mortgage may have been mis-sold.
Mortgages running past retirement
Should Your Mortgage Be Beyond Your Retirement Age? Has this been brought to your attention?
Has your broker or lender discussed how you would pay your mortgage payments after you retire?
A good example of this would be if someone takes out a mortgage for 20 years at the age of 50.
The average retirement age is 65, which means there will be 5 years to pay on the mortgage.
If, at the time of the agreement, the advisor did not consider whether the client could afford to make the payments after age 65, the client may have mis-sold their mortgage.
Use our letter template to complain if you think you’ve been mis-sold.
High broker fees
Did you pay unreasonably high fees to the broker or advisor who arranged your mortgage?
Have you been informed of what the fees would be?
Have they been added to your mortgage without your knowing it, so that you are now paying interest on them every month?
If any of the above situations apply to you, you may have a mis-selling case and you may want to use our template letter to complain to your supplier.
Which? Money Compare
Taking out a mortgage is a complicated process. Visit Which? Money Compare to compare hundreds of mortgages and find the ones that offer the best rates and best customer service.
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