If you have bought a home or are currently in the market to buy, you will be aware of just how many ‘products’ are out there when it comes to choosing the right loan.
As a client, you are relying on the advice given to you by your broker or advisor in order to navigate the financial requirements of committing to a loan to buy your home.
‘Mortgage mis-selling’ is when you have been sold a loan product that you don’t believe is the right one for your financial situation, and you feel you were mis-advised initially.
Legally, the person who advises you to buy must recommend something suitable for your needs, ensure your application information is accurate, make sure you know the risks involved, and explain properly the inclusions and exclusions of your loan product.
With the current housing market, lenders are more likely to take on riskier clients, which means that, even though you may not be financially in the ideal position to take out a loan, a lender may accept your application anyway.
One way this can happen is when a borrowers’ income is overstated on an application. This presents them as less of a risk ‘on paper’, but puts them in a risky position when their actual income isn’t enough to cover the repayments.
Ultimately, brokers and advisors must make sure that any mortgage you take on will be affordable throughout your entire mortgage term – if that isn’t the case, it could be a case of mis-selling.
If you have already committed to a mortgage, but feel like it wasn’t the right product or you have been ‘trapped’ in a bad deal, you are entitled to make a complaint about financial mis-selling and may be able to claim compensation.
Think you might be in this position?
Here are some of the indications that you may have been mis-sold a mortgage*:
- your mortgage end date is after your retirement date
- you weren’t told about the commission the adviser would receive from the lender
- you were advised to self-certify (borrow money without proving your income) or overstate your income in order to borrow more
- you were advised to switch lenders and weren’t told about the fees and penalties
- you were given a fixed-rate mortgage and told to remortgage to a better deal later on, then incurred penalties for leaving the fixed rate early
*as per The Money Advice Service
If you believe this may have happened to you and want to find out if you are entitled to compensation, talk to our team at Paramount Compensation Lawyers for a free case assessment.