Have you been mis-sold your mortgage?
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 proper assistance.
This can leave you in a position where you cannot afford to pay your mortgage back or the fees associated with it. In the most severe cases, this can present you with the risk of losing your home.
When considering if you have been mis-sold a mortgage, it is key to consider whether you were properly advised about the product and whether your financial advisor followed the rules regulated by the Financial Conduct Authority, in delivering you your mortgage agreement.
Ways you could have been mis-sold a mortgage
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.