If you believe you have been mis-sold your mortgage, our expert financial mis-selling team can assess your claim and advise you about how best to seek compensation.

A mortgage is a legal agreement which involves a bank or lender loaning a sum of money to help a buyer purchase a home. The mortgage is then to be paid back, plus interest, in monthly instalments over a set number of years.

There are many different types of mortgage, but nearly all of them are classified as ‘repayment mortgages’, whereby you pay back part of the loan and interest each month. Or, you may have an interest-only mortgage agreement, where you pay back the final lump sum later rather than monthly.  

Whichever one you have, taking out a mortgage on a house is often the biggest and most important loan that any of us will ever obtain. It is therefore vital that you have the correct mortgage for you and your individual circumstances.

Whilst the Financial Conduct Authority regulates mortgages, in stating who can provide the loans, and the rules they must follow in doing so, in some cases mortgage advisors and lenders fail to provide adequate assistance despite these rules.

This can leave the individual in a position where they cannot afford to pay their mortgage back or the fees associated with it. In the most severe cases, this can present the homeowner with the risk of losing their home. If you believe you have been mis-sold a mortgage, we can offer specialist advice to help you.

When considering if you have been mis-sold a mortgage, it is key to deliberate whether you were suitably advised about the product and whether your financial advisor followed the relevant rules regulated by the Financial Conduct Authority, in delivering you the product.

Examples of mortgage mis-selling

Your suitability was not properly evaluated

The result of this may have been that you took out a mortgage that was simply not the right fit for you. For example, you may have taken out an interest-only mortgage, but how you would pay the capital back was not considered, potentially leaving you with the inability to repay a very large sum of money.

Your mortgage end date is after your retirement date

If you agreed to a set time limit for the completion of your mortgage and a longer term has been selected than you required, this may constitute a mis-sold mortgage.

You weren’t told about the commission the adviser would receive from the lender

An example of this may be where an adviser tells you to switch mortgages but fails to reveal that in doing this they would receive commission payments, and so may have been incentivised by this. If the mortgage is unsuitable, it may be financial mis-selling.

You were advised to self-certify

This refers to a process whereby you borrow the money for the house without proving your income, and thus without proving your ability to pay it back, or where you overstate your income in order to be eligible to borrow more money.

If the mortgage broker fails to investigate the individual’s self-certification, they will have no real proof that they can meet the payments, which may amount to a mis-selling of the mortgage.

You were advised to switch lenders and weren’t told about the fees and penalties

If you have not been given an adequate reason for the switch, or if you were unaware about the associated costs then your mortgage advisor may be liable for mis-selling. It is essential they make you aware of any such fees and penalties.

If your lender, financial advisor or broker failed to do the following when advising you in taking out a mortgage, you may have been mis-sold it:

  • Failed to reveal to you all the options available and the details of each
  • Failed to properly investigate your individual circumstances, which led to an inappropriate mortgage being taken out.

There is also growing concern that interest only mortgages might need carefully consideration – if say an individual was pushed into this with little or no advice as to why, simply because the adviser wanted to benefit from higher commissions, this might be a prime-example of mis-selling that would require investigation and potential action.

Common problems arising from mis-sold mortgages

In mis-sold mortgage cases, the following problems often occur:

  • High fees you may not have been previously aware of
  • Bad interest rates
  • An inability to pay the mortgage

What can I claim?

Each claim is different depending on the circumstances of the mis-sold mortgage, meaning that the loss suffered as a result will also be different. It is therefore difficult to predict exactly what you can claim, but generally, you will be entitled to be put back into your pre-mis sold mortgage scheme position. This means that you may be able to reclaim some of the money you lost in the process of taking out the mis-sold mortgage.

What time limits are in place?

When a financial product, such as a mortgage, is mis-sold to you, you must bring a mis-selling claim against a financial adviser within six years of being sold the product, or within three years of learning it was mis-sold.

You should also lodge your complaint with the Financial Ombudsman Service, or the Financial Services Compensation Scheme, within three years of when the event happened or within three years from when you first knew about it.

How is the claim funded?

Our professional negligence lawyers are happy to discuss fee options and advise clients under a wide range of fee structures including working under:

  • an existing legal expenses insurance
  • a fixed fee
  • traditional hourly rate retainers, or
  • a “No Win, No Fee” basis.

The Next Steps

If you have been let down by an expert and want to find out more about, or start, a professional negligence compensation claim please call our professional negligence lawyers on Freephone 0808 164 0808 or contact us online.