I Think I Have Been Mis-Sold My Mortgage, What Can I Do?

When you take out any kind of financial product - whether it’s insurance, a loan or a mortgage - you’re trusting the professional on the other side to give you the right advice and sell you something that meets your individual needs.

How Do I Know if I Have Been Mis-Sold an Interest Only Mortgage?

If you have been mis-sold a mortgage then you have the right to complain and to compensation. Complain to the company first, and then to the Financial Ombudsman if their response isn't satisfactory.

But what happens if that isn’t the case? If you end up tied into a mortgage that isn’t right for you, it’s more likely that something can go wrong. If you think you’ve been mis-sold your mortgage, you could be at risk of financial harm.

This guide looks at how to spot mortgage mis-selling and what to do next if you think you have been mis-sold your mortgage.

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What Is Financial Mis-Selling?

Mis-selling is the umbrella term for all sorts of negligent behaviour on the part of a mortgage lender, broker or advisor. It covers being given unsuitable advice for your situation, not having risks explained to you properly and not being given the information you need to make an informed decision as to whether a mortgage is right for you.

Signs of a Mis-Sold Mortgage

It’s not enough for you to be unable to meet your repayments for a mortgage to be classed as mis-sold. If you knew what you were getting yourself in for, were given information to make an informed decision and the mortgage is suitable for your personal circumstances, then it’s unlikely to have been mis-sold.

What you do need to watch out for is:

Problems With the Mortgage Being Unsuitable for You

• You were given generic advice that was not tailored to your circumstances
• Your advisor didn’t discuss repayment plans with you (for interest-only mortgages) or make sure you had the means to pay off the capital at the end of the term
• The mortgage term runs past your retirement age and, this wasn’t discussed with you.

Problems With the Information or Advice You Were Given

• You were encouraged to take out a 'self-certification' or 'fast-track' mortgage rather than prove your income
• You were advised to remortgage your house as a way to consolidate your debts 
• You were not informed about any charges if you want to leave or switch deals early

Problems With the Sales Process

• You've been left paying unreasonably high fees to your broker
• There were broker fees being added to your mortgage without your knowledge
• Your broker was paid a very high commission for signing you up to a particular mortgage which they didn't disclose to you

Mortgage lenders also have to make sure you can afford the repayments not just at the time of taking it out, but throughout the mortgage term too. If you've missed repayments or the mortgage has gone into arrears due to lack of affordability this could be a sign of mis-selling.

What to Do if You Think You’ve Been Mis-Sold Your Mortgage

It's a common misconception that you have to already be out of pocket before you can do anything about a potentially mis-sold mortgage. This isn't the case. Even if you haven't lost any money yet, that doesn't mean that it's going to be safe and risk-free in the long run.

If you think your finances could be at risk, it might be wise to get some independent financial advice sooner rather than later. Then you can make a complaint regardless of whether you've actually suffered any financial loss.

Making an Interest-Only Mortgage Claim

If you've been left paying too much for your mortgage, then you might have a compensation claim on your hands. You can make this claim yourself or get a solicitor involved to handle your case for you.

Here are the steps to follow to get started.

Step 1: Gather All the Information You Can About Your Mortgage

The more you know about your case and the ins and outs of what might've gone wrong, the better the chance you have of getting a decent payout. Get your paperwork out and collect all the information you can on what was explained to you, what documentation you were given and if there's anything they didn't tell you at the time that they should've done.

Step 2: Figure Out if You Have a Case

To be owed compensation, your case has to meet a few criteria:

• You have to have been sold a mortgage by the company you are claiming against
• The company or advisor has to have broken one or more of the FCA’s rules
• The company breaching its obligations has caused you to suffer financial loss

Without these three factors, the compensation claim is unlikely to fall in your favour. This means you need to find evidence of who sold you the mortgage, prove that they offered you bad or unsuitable advice and show that you experienced a loss because out if.

You can see common complaints, case studies and rulings the Financial Conduct Authority have made about mortgages people thought were mis-sold on their website.

Step 3: Complain to the Company

You can find complaint letter templates available for free online and adapt it to fit your needs. The company must answer your letter within eight weeks. If you don't feel comfortable or confident doing this yourself, this is something a legal professional could help you draft.

Step 4: Involve the Financial Ombudsman, the FSCS or a Solicitor

If you're not satisfied with the company's response or if you didn't get a response within eight weeks, get the Financial Ombudsman involved. They will investigate your case and make a decision as to the next steps that must be taken - including potentially paying you compensation for financial loss or damages.

All is not lost even if your mortgage provider has gone bust. You may be able to recover some of your losses through the Financial Services Compensation Scheme. Be aware that there are limits on how much compensation the FSCS pays out, so you may not be able to get all of your money back if you borrowed a substantial figure.

Having a legal professional in your corner may help you put up a stronger case and increase the chance of you getting the mis-sold mortgage compensation you deserve.

How Can Money Savings Advice Help You With Making an Interest Only Mortgage Compensation Claim?

Here at Money Savings Advice, we have partnered with some of the UK’s leading Financial Claims management companies. They have already helped thousands of people claim compensation for mis-sold financial products and they can do the same for you.

Choosing an independent claims management company means they won’t proceed with a claim unless they are sure it is in your best interests. They are also regulated by the FCA, which gives you an additional layer of protection.

If you would like to speak to one of these claim management companies who can help you make a compensation claim, then click on the below and answer the very simple questions.