Endowment policies
Contents
If you were advised to make an investment that was intended to pay off your mortgage after it expired, did you later discover that you were not being 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 be a mis-sold policy. If you think this might apply to you, read our guide to mis-sold endowments.
Interest Only Mortgages
If you only pay mortgage interest each month, the advisor should have known you how you would repay this mortgage upon termination. See the article : 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 your broker or lender did not discuss this with you and did not provide examples of the cost of a capital and repayment mortgage compared to the lower cost of an interest-only mortgage, this would be an example of a wrong sale.
Besides, have you been explained that you may need to exchange your mortgage for a repayment mortgage instead of relying on house price increases? If not, it could also mean a formula sale.
Use our template letter if you want to complain about interest-only mortgage sales.
Remortgaging to clear your debts
If you wanted to consolidate your debts, were you advised that it would be cheaper for you to put all your loans, credit cards and funds on a mortgage? This may interest you : 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 swap short-term debt for long-term debt by adding it to your mortgage.
Did the adviser explain to you that even if you initially reduce your monthly expenses, you may be extending your debt and significantly increasing the amount of interest you pay?
If not, it can be considered misuse.
If you would like to be advised to use it again to clear your debts, please contact our service provider.
Top tips
Household budget analysis
Were you asked to complete a household budget analysis? Were you asked how much your monthly income was and how much your monthly expenditure was?
Did they work with you on how much money you had left each month after paying all the bills, or disposable income?
If this was not done, you could unknowingly over-mortgage, which you could not afford.
Self Certification mortgages
Were you asked to provide proof of your income, such as payslips or audited accounts, that could prove your income?
If not, were you encouraged to take a so-called mortgage called the Self Cert or Fast Track, where you did not have to prove your income?
These mortgage products paid much higher commissions and were therefore very popular among some brokers.
If this applies to you, your mortgage may have been sold incorrectly.
Mortgages running past retirement
Should your mortgage exceed your retirement age? Was this brought to your attention?
Did your broker or lender discuss how you could make mortgage payments after retirement?
A good example of this would be if someone took out a mortgage for 20 years at the age of 50.
The average retirement age is 65 years, which means that there are 5 years left to pay the mortgage.
If the adviser did not take into account at the time of the agreement whether the client could afford to make payments after the age of 65, the mortgage could have been sold to the client incorrectly.
Use our template to complain if you think you have been wrongly sold.
High broker fees
Did you pay unreasonably high fees to the mortgage broker or adviser?
Were you informed of the fees?
Were they added to your mortgage without your knowledge that you now pay interest on them every month?
If any of the above apply to you, you may have sold incorrectly and may use our template letter to file a complaint with your service provider.
Which? Money Compare
Taking out a mortgage is a complicated process. Which one to visit? Money Compare to compare hundreds of mortgages and find the ones with the best rates and the best customer service.
Which OÜ is the designated representative of the introducer? Financial Services Ltd, authorized and regulated by the Financial Conduct Authority.
Which one? What are mortgage advisors? Insurance Advisors and Which? Money comparison is which brand names? Financial Services Limited.
