Mis-Sold Mortgages

There are many ways a mortgage can be mis-sold, but unfortunately, most people don’t realise that until several years down the line, by then it is too late. Mortgages come in many shapes and forms and cover many different aspects. However, there are two primary aims of a mortgage when purchasing a property. A property that you are going to live in or one that you are to rent out (Buy to Let). Of course, there are various commercial mortgages, but we will cover this separately as it is a slightly more specific field.

Personal mortgages must now fulfil one thing, and that is a client’s suitability and affordability of the monthly commitment. Unfortunately, when larger mortgages are taken out, the mortgage provider and the mortgage seller benefit financially. Therefore it is in their interest to secure large mortgages and adapt information so that the application is beneficially looked at and approved. 

Now, of course, the most important issue that is often overlooked is the affordability and the affordability over a period of time. In order to get their dream home or to achieve their aim, applicants will do whatever possible to secure the lending, irrespective of affordability.

The adviser should be looking at what would happen to that particular individual and their ability to afford the mortgage, if interest rates rise or if there is a downturn in the property market.

Many years ago interest-only loans were hugely popular, but unfortunately, these are all now starting to reach the end of their duration. People are now finding themselves in difficulty because whereas they could afford the interest on a mortgage, but they could not afford to pay the interest and capital. This is now a big no-no, and we can look at challenging any old facilities which were taken out without assessing whether a customer could afford to meet their financial obligations.