If you were advised to make an investment to repay the mortgage when it was over, did you later discover that it would not be paid to you enough? On the same subject : 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 this is the case, this could be a wrongly sold policy. Read our guide to mis-sold endowments if you think this might apply to you.
Interest Only Mortgages
If you only paid interest on your mortgage on a monthly basis, then your advisor should introduce you to how you will repay the mortgage when it is completed. This may interest you : I think I’ve been mis-sold my mortgage, what can I do?.
If your broker or lender has not talked to you about this or given you examples of the cost of a mortgage on equity and repayment compared to the lower cost of a mortgage on interest only, this would be an example of a misappropriation.
Furthermore, have you been explained that you may need to switch mortgages to mortgage repayments instead of relying on rising house prices? If not, then it could also constitute a wrong sale.
Use our letter template if you want to complain about an incorrect sale of a mortgage with only interest.
Remortgaging to clear your debts
If you wanted to consolidate your debts, did they advise you that it would be cheaper to put all your loans, credit cards and finances on a mortgage? 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 not, you can replace short-term debts with long-term additions to the mortgage.
Did the advisor explain to you that, although you would initially reduce your monthly expenses, you might be extending your debt term and greatly increasing the amount of interest you would pay?
If not, this could be considered a wrong sale.
Complain to your service provider with our template if you were prompted to re-mortgage to settle your debts.
Household budget analysis
Did they ask you to complete a home budget analysis? Did they ask you what your monthly income was and what your monthly expenses were?
Did they calculate with you how much money you have left each month after paying all the bills, i.e. disposable income?
If that’s not done, you may have unknowingly overdid it on a mortgage you couldn’t afford.
Self Certification mortgages
Did they ask you to provide proof of your income, for example, payrolls or audited invoices that could prove your income?
If not, did they encourage you to pick up what is known as a “Self Cert” or “Fast Track” mortgage, where you didn’t have to prove your income?
These mortgage products paid far higher commissions and were very popular among some brokers for this very reason.
If this applies to you, your mortgage may have been sold incorrectly.
Mortgages running past retirement
Will your mortgage exceed retirement age? Has this been pointed out to you?
Has your broker or lender discussed how you will settle your mortgage after retirement?
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 left to pay the mortgage.
If at the time of the agreement the advisor did not consider whether the buyer could afford to pay after the age of 65, then he may have sold the mortgage incorrectly.
Use our template to complain if you think you were sold wrong.
High broker fees
Have you paid unreasonably high fees to the broker or advisor who contracted your mortgage?
Did you know what the fees will be?
Were they added to your mortgage without you knowing, so you now pay interest on them every month?
If any of the above applies to you, you may have a case of a wrong sale and you may want to use our template to complain to your service provider.
Which? Money Compare
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