Getting a mortgage is one of the biggest financial commitments, and this is the reason why the Financial Services Authority regulates the giving of advice concerning mortgages. The advice that you’re given about your mortgage has to be sound. This advice includes whether youll be able to afford to pay for the mortgage, whether its suitable for your needs, and whether its the one thats most suitable for you out of all the loans that are available. If its not the case you should file missold mortgages claims.
Unfortunately, there’s a body of evidence showing that many people do not receive sound advice when they are seeking a loan to buy a home. Incorrect or misleading advice can be given to you through various ways. If you have any doubts about your mortgage, heres how you can know that you need to make missold mortgages claims.
The first thing to know whether to file missold mortgages claims is whether the financial adviser didnt take into account likely changes in the rate of interest and how this might have an effect on your ability to repay your loan. For instance, you may have taken out a loan with a fixed rate for a certain amount of time. Once the fixed-rate period ended, you would have to make different payments according to the rate offered by your lender. In many instances, this will mean that your payments will increase in a substantial manner. If your financial advisor didnt make an assessment on this likely increase that could face you, and whether you are able to afford such an increase, you might have been mis-sold on your mortgage.
Another reason that might make you make missold mortgages claims is if the financial advisor didnt take into account any change in your circumstances that are known. For instance, let us assume that a person takes out a mortgage at the age of 45 for a period of 25 years. If that person will retire at the age of 65, it means that he or she will still be left with 5 years to pay for the mortgage. This means that the financial advisor has to take into considerations how that person will still be able to afford to pay for the mortgage after retirement.
Another reason for you to file missold mortgages claims is when you take out a remortgage in order to pay off existing debts. The financial advisor should consider what it would cost you to lengthen the loan period, and also the ramifications of making an unsecured loan to be secured against your home. For instance, if you remortgage in order to pay for a car loan, it means that you can reduce the amount monthly repayments. But this also means that youre repaying the loan using the terms of your mortgage, 20 to 25 years. You will also pay interest over the extended period. Basically, youll end up paying more money overall, and your financial advisor should take this into consideration.
Another reason to file missold mortgages claims is if sold a sub-prime mortgage whereas it was possible for you to get a high street mortgage. A sub-prime mortgage will usually have a higher interest rate, and your financial advisor arranged for you to get a sub-prime mortgage, then he or she mis-sold the mortgage to you. This means that youll be eligible to seek compensation for the amount that you paid extra.
People can also file missold mortgages claims if they were sold self-certification mortgages while they were in employment and they had proof that they were earning an income. The self-certification mortgages are given to people who cannot provide the lender with evidence that they are earning an income. As a consequence, the lender will be taking more risk to lend money to such a person and this will account for the high interest rate. If you did not need such a mortgage, then mortgage has been mis-sold to you.
An added concern with a self-certification mortgage is when the financial advisor advises you to inflate your income so that you can get a loan in instances where your income would not be sufficient to obtain the mortgage and this is mortgage fraud. The financial advisor should also assess whether you would prefer a mortgage where you only pay for the interest, or the one in which you pay the interest plus part of the loan. With the interest-only mortgage, you will need to find another source of funds to pay for the mortgage, and if youre unable to find the money, you should file missold mortgages claims.
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