Interest Only Mortgage Claims
MIS-SOLD MORTGAGE CLAIM PROCESS EXPLAINED
Interest only mortgages are a good option for some people, but they are not for everyone. They are intended for people who have significant incomes, or who have a diverse portfolio of investments that they could use to pay it off. If you are not one of those people then opting for an interest-only mortgage could be a very bad idea for you.
Standard repayment mortgages give you some security. As long as you are making payments, you will be paying off the interest on the mortgage and also some of the capital every month. This means that when the mortgage comes to an end you will own the house. Interest only mortgages are different because when the mortgage ends, you need to pay off the amount that you owe. This means that you will need savings, or to have a windfall of some kind. If that doesn’t happen, then when the mortgage ends you are no better off. You do not own the property.
If you were pushed to take out an interest-only mortgage and you were not a suitable candidate for one, then you may be able to make a claim.
INTEREST-ONLY MORTGAGES
Your mortgage adviser should perform some checks before they advise you on what kind of mortgage to get. This type of mortgage will only work if you are able to save, or somehow gain, the rest of the money through investment or through an additional source of income before the end of the mortgage term. Your adviser should make sure that you will be able to do this to a reasonable degree, otherwise, they should recommend a repayment mortgage. If they did not do this then they may have mis-sold the mortgage to you.
Mis-selling of an interest-only mortgage relates to the affordability and suitability of the mortgage. The responsibility that the adviser has to steer you in the direction that matches your best interests, based on your projected finances and their projections for the future. Some interest-only mortgages are linked to an endowment policy, and there is the risk that if this does not pay the returns it promised then you may lose your home. If you are not able to repay the lump sum due at the end of the mortgage term, ask yourself why the adviser recommended the plan they did. They should have been able to spot that you might not be able to pay it back.