Endowment policies
Contents
If you were advised to take an investment meant to pay off your mortgage when you ran out, did you later discover that you were not paying enough? To see also : I think I’ve been mis-sold my mortgage, what can I do?.
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 were to only pay interest on your mortgage each month, then the advisor would have to let you know how to repay your mortgage when you are finished. To see 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 your broker or lender has not discussed this with you or gives you examples of the cost of a Mortgage Capital and Repayment compared to the lower costs of an Interest Only Mortgage, then this would be an example of a bad sale.
Also, has it been explained to you that you may have to switch your mortgage to a Repayment mortgage rather than depending on rising house prices? If not, then this could also constitute a bad sale.
Use our sample letter if you want to complain about being sold with an interest-only mortgage.
Remortgaging to clear your debts
If you’ve been looking to consolidate your debts, have you been advised it would be cheaper for you to put all your loans, credit cards and finances on your mortgage? To see also : I think I’ve been mis-sold my mortgage, what can I do?.
If not, you may be exchanging short-term debts for long-term debt by adding it to your mortgage.
The counselor explained to you that although you are initially reducing your monthly outflow, you may be prolonging your debt term and greatly increasing the amount of interest you are paying?
If not, this could be constituted as a bad sale.
Complain to your provider with our model letter if you have been prompted to change the mortgage to cancel your debts.
Top tips
Household budget analysis
Are you required to complete a home budget analysis? You asked how much was your monthly income, and what were your monthly outflows?
Have they worked with you how much money is left each month after you have paid all your bills i.e. your disposable income?
If this has not been done, you may have over-committed yourself to a mortgage you cannot afford.
Self Certification mortgages
Are you required to provide evidence of your income, for example, payroll or verified accounts that can prove your income?
If not, have you been encouraged to take 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 that reason.
If this applies to you, your mortgage could have been mis-sold.
Mortgages running past retirement
Should your mortgage go beyond your retirement age? Was this indicated to you?
Did your broker or lender discuss how to meet your mortgage payments once you retire?
A good example of this would be if someone took out a mortgage loan for 20 years at the age of 50.
The average retirement age is 65, which means there are 5 years left 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 the age of 65, then the client could have mis-sold his mortgage.
Use our template letter to complain if you think it was sold poorly.
High broker fees
Did you pay unreasonably high fees to the broker or counselor who arranged your mortgage?
Have you been aware of what the fees will be?
Were they added to your mortgage without you knowing so you are now paying interest on them every month?
If any of the above apply to you then you may have a bad sales case and you may want to use our sample letter to complain to your supplier.
Which? Money Compare
Taking out a mortgage is a complicated process. Visit what? Compare Money to compare hundreds of mortgages and find the ones with the best rates and the best customer service.
Which Ltd. is an Introduced Representative of Which? Financial Services Ltd, which is authorized and regulated by the Financial Conduct Authority.
Which one? Mortgage Advisors, Which? Insurance Consultants and What? Compare Money Are Trade Names Of Which? Limited Financial Services.
