Were they wrongly advised?

scoobydog

My in laws had an endowment mortgage for around £14,000. They then wanted to borrow an extra £20k to consolidate other debts and approached a brokier for advice. Their only 'requirement' was that it ended at the same time as there existing mortgage which is in line with their retirement. He arranged for them to borrow it with the same lender on an interest only basis and told them to overpay by £100 and it would end at the same time as original mortgage. They have been happily doing this and there is now just 1 year left and thery have received a letter from their lender asking how they intend to pay the £6000 that will still be outstanding. So basically the extra £100 was not sufficient. They are not clued up on mortgages at all and didn't understand it was interest only etc. Additionally my mother in law rang the mortgage company approx 3 years ago to check everything was in line to finish together and was told yes (although she has no proof of this). At no point previous to this have they ever been told to increase their payments. I personally feel the broker should have arranged the extra £20,000 on a capital repayment basis to ensure it was paid off. They already have to deal with a shortfall from the original endowment part of the mortgage (although with my help they have claimed some compensation for this) and now face the prospect of finding £6000 they don't have. They have been back to see the broker and he has just told them to contact the lender and ask to increase the term of their mortgage. I'm not sure this will be agreed due to their age.
Any advice? I feel strongly that the broker arranged the wrong product for them.

dimbo61

Unless they have it in writing that the mortgage would be paid off at the end of the term by paying an extra £100 a month then it would be a waste of time trying to sue either the broker or the lender.
Now the good news is that they will only owe £6000 so if they can extend the mortgage term by 2/3 years they should be able to clear the outstanding debt asap

Thrugelmir

scoobydog wrote: »

Any advice? I feel strongly that the broker arranged the wrong product for them.

As the purpose of the original loan was to consolidate debt. I would suggest the reason the loan would have been made on an i/o basis with a £100 overpayment. Is that was all your In Laws could afford at the time.

Ultimately people have to take responsibility for their own financial affairs. Blaming with hindsight is so easy to do.