Mis-Sold Mortgage Claims

What is a mis-sold mortgage?

There are varying ways in which you may have been mis-sold a mortgage, but the fundamental decider is whether your adviser or lender treated you fairly.

Here we will detail some of the most common breaches of mis-sold mortgages, so you can identify if you have a potential mis-sold mortgage claim. If you think you may have a claim, contact the Mis-sold mortgage experts today for a consultation.

Debt Consolidation

If you had debts at the time of applying for your mortgage and were advised to consolidate those debts into your mortgage, you should have been informed of the additional costs likely to be compounded due to the increased payment period.

If appropriate, securing previously unsecured debt should be made a priority, as a result, if someone was to fall into financial difficulty, their property would not be at risk. However, if the debt was consolidated into the mortgage, and financial problems arose, the property in question would be at risk.

There are a few instances in which consolidating your debt will have been sound advice. For example, credit card debt carrying extortionate interest rates should be consolidated into your mortgage. Negotiating an agreement with creditors can often be a viable option rather than increasing mortgages and increasing the risk of losing a property. If you are advised to consolidate debt when your financial situation doesn’t indicate to do so, your broker or lender could be at risk of mis selling mortgages.

Capital Raising

If a client were to approach a broker looking to raise capital, it is then the responsibility of that broker to inform the client that borrowing the requested money would reduce the value of their home. This is due to the money they are borrowing coming from the equity in their home. This would constitute as a mis-sold mortgage as the debt would likely be paid back over a much longer period of time in comparison to a personal loan.

Due to this, clients advised to increase their capital by adding the fee onto their mortgage may be entitled to compensation for the added interest liability paid. The client will also be due to be paid over the term of the mortgage, along with statutory interest.

Extended terms of your mortgage?

It is becoming increasingly common for the length of time a mortgage is being paid to be a reason for a mis-sold mortgage claim. You may not even be aware that your mortgage period had been extended or not set up correctly, so it is worth checking!

If it was not clearly explained to you that that the by accepting a longer term, despite monthly payments being lower, the interest liability would increase as a result of the extended payback period.

Could you afford your mortgage?

If you can’t afford your mortgage, it may not be your fault. It is the responsibility of your broker to make sure your mortgage is affordable, and that a satisfactory assessment of income and the client’s financial situation was carried out. Unfortunately, it is often the case that a client was destined to fail as they could not afford the mortgage they were advised to take.

For example, if a client has substantial debt or were advised to borrow large amounts of capital, it is possible that their repayment scheme was impossible to maintain in their current financial state.

Cases similar to the above could constitute as negligence from the broker who advised the client.

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