What is a mis-sold mortgage and how could it affect you?


There are a number of different factors that could result in you being mis-sold a mortgage and they can cause financial disaster or even worse, bankruptcy. When advice and sales are made with a lack of professionalism or guidance, people often end up in these situations.

Whether or not you have been treated fairly by your lender or advisor is the ultimate question when it comes to determining if you have been mis-sold a mortgage or not.


Sticking to the rules

Any advice given should comply with the statutory principles of the Financial Conduct Authority. Unfortunately, not all companies, advisors and lenders stick to the guidelines of best practice during and after any sales made.

One of the latest incidents to be recognised is the fact that up to thousands of people could be due compensation after being mis-sold interest-only mortgages.

Some brokers have been failing to check whether or not repayment plans were suitable for people who needed repayments strategies based off of unreliable house price rises.

A lot of people who have been put in this situation are often vulnerable, have high debts to pay off or have been moved on to interest only deals which means they aren’t actually paying off any debt. These cases should have been put in touch with insolvency practicioners instead of being advised to take on interest-only mortgages. Mis Sold Mortgage experts say this has left a lot of people at risk of losing their homes entirely.

In the past 3 years, there has been one in five cases upheld by the Financial Ombudsman Service due to complaints on interest-only mortgage cases. The number of cases is between a staggering 300 to 400 every year.

This could mean that borrowers could be due compensation because they had been incorrectly told the best option was to get an interest-only mortgage deal. This was down to lack of suitability or risky payment plans being set up and agreed on, leaving people in very vulnerable situations.

Some of the cases left borrowers using overseas property investments to make payments on their mortgages.


Circumstances that aren’t suitable for mis-sold mortgage claims

The ombudsman will not uphold a claim where a borrower takes out an interest-only mortgage to buy overseas properties if a person can downsize before doing this.

When interest-only mortgages are used for overseas investments, the people may have other methods of repaying a loan so again, it would not be a valid claim. Another borrower was denied a claim due to following advice to borrow an interest-only basis plan to consolidate debt as it was deemed as the best advice for them at that time.

Every case is so different and every person will have a different outcome based upon personal circumstances, the best thing you can do is get in touch with professionals who can help you and bring some clarity to your situation.

That way you can be assisted in making the best choice possible for your future.









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