You’ve probably heard all the noise about claiming back your mis-sold PPI, but did you realise you may also have been mis-sold your mortgage and could have a claim?

It’s a new one to me, but after some digging it seems some people have been poorly advised and not treated fairly by their lender, adviser or broker.  In this blog post I’ll take a look at why people are making mortgage claims and whether you may have a case.

How people were mis-sold a mortgage

Ultimately people were sold a mortgage deal that was not right for them.

It was not the best choice for their individual circumstances and results in them paying more than they need to.

The broker or adviser may also have recommended a product that generated themselves a higher commission instead of choosing the best deal for their client.

If a mortgage isn’t suitable for a customer and the risks weren’t adequately explained, then it was probably mis-sold.

Mis-sold mortgage examples

There are a lot of different ways a mortgage could have been mis-sold.

Here are some examples:

• Interest-only mortgages

Though these are cheaper at first glance, with cheaper repayments, they will actually cost more in the long run.  If you are recommended an interest only deal then your adviser or broker should have shown the comparison between interest only and a capital repayment mortgage.

• Self-certification

If you were advised to self-certify and not provide proof of your income, or even state it was higher than it really is, you may have borrowed more than you really should have.  This could have been so your broker received a higher commission and would not have been the correct advice to you.

• Debt consolidation

If you were advised to move all your debts, such as unsecured loans, to your mortgage, but you weren’t advised that long term you’ll be paying back more by increasing the debt duration and interest.  The monthly payments were lower, but the amount of debt owed was increased.  If this was not properly explained then you were incorrectly advised.

• Your mortgage end date is post-retirement

Many lenders will not lend a mortgage post-retirement as income may considerably drop and it’s too risky.  Did your adviser tell you the mortgage will run into your retirement?  Will you have substantial income to continue with mortgage payments in retirement?

• Subprime mortgages

A subprime mortgage is for those who have a poor credit rating and history who cannot get a regular mortgage.  If you were recommended this type of mortgage, which has higher interest rates and fees, yet your credit rating is fine, then you were misinformed.

• High broker fees

Were the brokers fees unreasonably high?  Or perhaps they added their fees to your mortgage without your knowledge?  They should have explained their fees (and commission) to you.

How to claim

If you believe you are due compensation then you’ll need to contact the company who you believe mis-sold the mortgage to you.

This could be the company of the lender, adviser or broker.

Write a letter outlining the reasons you believe the mortgage was mis-sold and ask them to investigate your complaint.

They must investigate within eight weeks. 

If you haven’t heard back after eight weeks or you’re not happy with the response then you have six months to ask the Financial Ombudsman Service to step in and investigate your complaint. 

Alternatively, if you don’t want the hassle, you may choose a claims company to process the claim on your behalf.  They’ll take care of all the correspondence and will fight for your compensation.  They understand all the legal jargon and can talk you through the process.  They’ll also be able to assess whether you have a claim in the first place.  Choose a no-win no-fee company so you have nothing to lose.

 

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