Mis-sold Mortgage Consolidation????

djdido2

My bank persuaded me to consolidate my mortgage to pay off debts that I had with them and to fix my mortgage payments. The anticipated that my house was worth £xxxx but when it was valued it was not worth as much as they had anticipated. I was initially told I would be able to obtain 10k to pay off a loan and credit card debt and have a fitted kitchen done with what was left.

In the end they went ahead with the arrangement, despite the fact that the amount was about 3.5k, I of course used this to pay off the debts but I was left with one existing debt still and no kitchen and the mortgage payments are crippling. ( I could have a brand new house for the amount I am paying).:(

I am a single parent and am scrimping together every single month to pay this as priority but I am obviously struggling really badly. Is there anything I can do at all to reduce my mortgage payments???

Any help really appreciated. I am not terrible good with all the mathematical jargon linked to mortgages so please bear with me.

Thank you

Dido

Annisele

I'm afraid that getting anything back from your lender is likely to be a non-starter. It sounds as though you knew that you'd only get a further advance of £3.5k before you signed on the dotted line, so that fact that you initially thought you'd get £10k isn't really relevant.

Is the problem that the fixed rate is high and the payments are therefore unaffordable? In that case, what is the fixed rate, when does it end, what is the total of your mortgage, and what are the penalties for getting out of the fix?

You might be better posting a "statement of affairs" over on the debt free wannabee board (there are stickies there explaining how to do that). That way people can look at your entire financial situation - it might be that there's nothing you can do about your mortgage, but you might be able to reduce expenditure with respect to the other debt, or increase income via benefits, or something else entirely.

djdido2

The thing is though, I didnt sign on the dotted line. They went ahead with the deal despite the fact that I was going to end up with nowhere near what I originally anticipated. I don't remember signing anything and probably would have backed out of the deal if I had been given the choice. I will definitely post my SOA as I have been a member on here for a good while and I have seen the wonders that have worked for people, however, I have cut corners down to the last penny but am sure there are probably people out there that can help.

Would have to gather all the other info as embarrasingly I do not have a clue about the mortgage questions!!!

dunstonh

Mis-sold Mortgage Consolidation????

How is it mis-sold?

They have not increased your debt. They have moved a lot of it onto cheaper lending but effectively the amount has remained the same. The bank is not responsible for what you have spent. It appears they are trying to help you reduce costs as much as they can.

I don't remember signing anything and probably would have backed out of the deal

There would have been multiple signatures. 1) application, 2) offer letter

Trying to blame the lender here is a complete no-go.

I could have a brand new house for the amount I am paying

With respect, you should have thought of that before you spent the money you didnt have.

Perhaps it is worth considering putting the house up for sale, clearing your debt and going rented?

djdido2

dunstonh wrote: »

How is it mis-sold?

note there is a question mark next to the question!!!

They have not increased your debt. They have moved a lot of it onto cheaper lending but effectively the amount has remained the same. The bank is not responsible for what you have spent. It appears they are trying to help you reduce costs as much as they can.

The amount has not remained the same. I went from paying £430 a month to £569 per month.


There would have been multiple signatures. 1) application, 2) offer letter

Trying to blame the lender here is a complete no-go.

Not trying to blame the lender, I am trying to find a way to out of paying such a high price for a house that isnt worth much.

With respect, you should have thought of that before you spent the money you didnt have.

I didn't spend the money, it was automatically taken from my existing account to pay of the said debts.

Perhaps it is worth considering putting the house up for sale, clearing your debt and going rented?

The house is not worth anything and therefore selling would leave me with money still owing. Renting would not be much cheaper than what I am already paying.

Thank you for your help.

Annisele

djdido2 wrote: »

The amount has not remained the same. I went from paying £430 a month to £569 per month.

A bit confused by that...if you only borrowed an extra £3.5k on your mortgage, and that £3.5k went towards paying an existing debt, then I can only think of two reasons why your monthly payment might have gone up:

1. The interest rate you were paying on your loan increased; or
2. You were only paying interest on your £3.5k debt and then moved to paying both interest and capital - and ultimately that will reduce your debt and leave you better off.

In either case, I can't see that your total debt would have increased as a result of your mortgage.

People aren't going to be able to help a great deal without knowing more about your mortgage, the value of the house, and your income.

ILW

How come the house is worth nothing?

djdido2

Bought it as a wreck and not had any free money to do anything to it so I figure in this climate it will sell for less than I purchased it for. Similar properties in the street are selling for around the price I bought it for and they are like mansions compared to mine. I am trying to dig out paperwork to get the right figures sorted out.

Thanks

dunstonh

Normally when people transfer short term expensive debt from storecards, credit cards and personal loans to the mortgage, it reduces the monthly payment.

The fact yours increased doesnt sound right. That is unless you cleared debts which were buy now pay later style.

magpiecottage

ILW wrote: »

How come the house is worth nothing?

More to the point, why would the bank allow anything more to be secured on it. If the security is worthless they might as well stick with an unsecured debt at a higher interest rate.

robbedofmymoney

it may be the case that the bank changed th emortgage from a standard variable 2.5% to a fixed rate over 2 or 3 years of say 4 or 5%, this would increase the overall payments and make it difficult to get out of it without a financial penatly.

as the info being given is vague it is difficult to tell if this is what has happened. only th OP will know this.