I bought a flat back in 2005, during the height of the property boom in one of the most expensive cities in the UK. At the time I was a newly qualified teacher and was able to take advantage of a government scheme available that offered me an equity loan, which allowed me to purchase a higher value property than I would have been able to afford otherwise. This loan also meant I got 100% mortgage, so no deposit needed. It also meant an excellent mortgage deal!
Fast forward to 2009 and, now a parent, the property was no longer suited to our needs. But the market had gone bust, making it difficult to sell up and move. Worse still, I had quit my teaching job to stay home with my daughter full time, so was also now under pressure to repay the equity loan within the specified timeframe, because I had left the profession.
After a lengthy struggle (and a massive mess made by the solicitors, which technically left us homeless for a week while the purchase was completed on our new home… but that’s a whole other story!) the property was sold with practically no equity.
This meant the new mortgage was less favourable because of the small deposit. At the time, I considered it lucky that the broker found a mortgage, even though it meant paying higher interest rates and larger monthly payments than was perhaps wise. However, on reflection, this kind of thing is exactly why there are so many mis-sold mortgage claims
In my case, having looked at all the factors, I don’t think it was missold. But if you got a mortgage since November 2004 – and especially if it was through a broker – you could well have been missold your mortgage; in other words, you were given advice that wasn’t suitable, the risks were not clearly explained to you, or you were not given all of the information you needed. Basically, for one reason or another, if you ended up taking out a product that wasn’t right for you.
One example is if you cannot afford your mortgage through no fault of your own. If you had substantial debt and/ or were advised to borrow large amounts of capital, it is possible that their repayment scheme was impossible to maintain in your current financial state.
Another example is if you were told to consolidate your debt into the mortgage. Sometimes this advice is accurate and the best course of action. But if you were advised incorrectly, or not given all the relevant information to make an informed decision, this could mean you were mis-sold your mortgage.
Raising Capital or Extended Mortgage Terms
Other examples are if you took out a new mortgage in order to raise capital, or extended your mortgage terms, without being informed correctly of the risks and downsides of doing so. This includes if you added broker fees and mortgage fees to your payment terms too. Clients advised to increase their capital in this way may be entitled to compensation for the added interest liability paid.
If you think you may have a claim, contact an expert, such as the mis-sold mortgage experts for a consultation. You will pay a percentage of any entitlement back to the company, should the claim be successful, to cover the cost of their solicitors and so on. But if you were mis-sold your mortgage and are entitled to make a claim, doing so through a company makes the whole process easier than trying to claim independently.
*Disclosure: This is a collaborative post.