Do you think you’ve been sold a mortgage you couldn’t afford, or isn’t right for your circumstances? Are you finding it difficult to make your mortgage payments, or feel you’ll struggle to pay it off? If so, you may be able to claim back interest and losses.
This is because the Financial Conduct Authority rules that lenders giving advice must recommend a mortgage that’s suitable for the customer.
How do I know if I was mis-sold my mortgage?
The following are examples of reasons why your mortgage might have been mis-sold to you.
You remortgaged to pay off debts
If you took out a bigger and/or longer mortgage to consolidate debts, you should have been told about cheaper, alternative ways to do this where you might pay a lot less interest. For example with a loan or credit cards. If this wasn’t explained, you may have been mis-sold your mortgage.
You took out an endowment policy
An endowment policy is a regular savings plan designed to accumulate enough money to pay off your mortgage at the end of its term. If you took out a policy that’s linked to a mortgage, and have since found out it won’t be enough, you may have been mis-sold it and therefore entitled to compensation from the Financial Services Compensation Scheme (FSCS).
You weren’t asked for a household budget analysis
When you took out your mortgage you should have been asked to provide details of your monthly income and expenditure to make sure you could meet your mortgage payments. If this didn’t happen, you may have been mis-sold a mortgage you couldn’t afford.
You took out an interest-only mortgage
With an interest-only mortgage, payments are lower because you only pay the monthly interest. The amount you borrowed – the capital – is payable at the end of the mortgage term. So you need to be able to pay this when the time comes. If you can’t, you have to swap to a repayment mortgage. This should have been made clear to you from the start.
You should also have been given comparisons of the monthly payments for a repayment (capital plus interest) mortgage and an interest only one.
If the risks weren’t explained to you, you may be able to claim it was mis-sold.
Did you pay high broker fees?
You may have a mis-selling claim if you paid extortionate fees, if you weren’t told how much the fees would be, or if they were subject to interest and added to your monthly mortgage payment.
Were you asked for evidence of your income?
Mortgages given without you needing to provide proof of your income, for example with payslips or audited accounts, were known as Self Certification or Fast Track mortgages.
If you weren’t asked for evidence, you may be eligible to make a claim.
Will you reach retirement age before the end of your mortgage?
If so, there should have been a discussion about this, with you being asked how you would afford to make payments once you’ve retired.
If any of the above apply to you, get in touch.
We can help.