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 enough for you? 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 monthly interest on the mortgage, then the advisor should let you know how you will repay the mortgage when it is over. 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 has not discussed this with you or given you examples of the cost of the mortgage on equity and repayment compared to the lower cost of the mortgage on interest only, then this would be an example of a wrong sale.
Furthermore, have you been told that you may need to switch mortgages to mortgage repayments instead of relying on rising house prices? If not, then it could be a fake sale.
Use our letter form if you want to complain about the wrong sale of a mortgage with only interest.
Remortgaging to clear your debts
If you wanted to consolidate debts, did they advise you that it would be cheaper for you to put all your loans, credit cards and finances on a mortgage? To see also : I think I’ve been mis-sold my mortgage, what can I do?.
If not, you can replace short-term debts with long-term ones by adding them to the mortgage.
Did the advisor explain to you that, although you would initially reduce your monthly expenses, you might be extending the term of your debt and greatly increasing the amount of interest you would pay?
If not, this could be considered a wrong sale.
Complain to your supplier via our template letter if you were encouraged to re-mortgage to settle your debts.
Household budget analysis
Are you asked 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 you pay all the bills, or disposable income?
If that’s not done, you may have unknowingly overdid it on a mortgage you couldn’t afford.
Self Certification mortgages
Have you been asked to provide proof of your income, for example, payrolls or audited invoices that could prove your income?
If not, were you encouraged 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 cross your retirement age? Has this been pointed out to you?
Has your broker or lender talked about 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 take into account whether the buyer can afford to pay after the age of 65, then the client may have been wrongly sold the mortgage.
Use our letter with a template to complain if you think you have been sold wrong.
High broker fees
Did you pay unreasonably high fees to the broker or advisor who arranged 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 may want to use our letter form to complain to your supplier.
Which? Money Compare
Taking out a mortgage is a complex process. Visit Which? Money Compare to compare hundreds of mortgages and find the ones with the best rates and the best customer service.
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