Few things you need to know about mis-sold mortgages

Many houses increased their price almost twofold between 2002 and 2007, which means that people struggle to afford their mortgage payments

12:46 04 October 2013

Many brokers and lenders between 2002 and 2007 on the UK market rushed to grant loans to clients who soon found out that they could not actually afford their mortgage payments.

Some of the clients managed to get their money back by filing complaints against those brokers and lenders, but others fell for the trap and could not retrieve their money.

Any mortgage that is not ideal for the client (that is to say, the client cannot afford it on his current income, or the client does not need all of the services included with that product) is called a mis-sold mortgage.

Here is all you need to know about mis-sold mortgages and how they work:

• While brokers and lenders did not risk anything when offering their mortgage loan offer, their clients had it all to risk, and many found out that they couldn't come up with the money for their payments anymore;

 

• Any broker and lender should always ask for your financial situation before even agreeing to talk to you about their mortgage offers. If they don't, it means that they might want to mis-sell it to you;

 

• Mortgage scams often involve very high commissions that clients have to pay;

 

• There are now mortgage advisors who are under the control of the Financial Services Authority (FSA), and who can give advice about any mortgage offer that you consider signing;

The past is past. All that you have to do now is to assess your situation and find answers for a few questions. The main thing you should take into consideration to find out if your mortgage was mis-sold is this: were you given the correct information about your repayment rates? Would you have afforded to repay the payments based on the income you had? If the answer is no, then you could file a complaint against the company that sold it to you.