Given wrong mortgage in 1999

kutiez2005

I had a mortgage with Nationwide in 1999 and pretty much everything was wrong with it! I was only 19 at the time and I eventually sold the house and repaid the entire mortgage in 2003. Now I am older I realise that I really should have complained at the time but I just didn't have any idea of the real financial implications of what went wrong.

Firstly, I applied for the mortgage via an independant financial advisor at the estage agent that I bought the house from. He explained the various types of mortgage and I opted for a repayment mortgage with Nationwide that would be capped for 2 or 3 years (can't remember which). The service I had from this financial advisor was awful, he was rude, pushy and I had to constantly chase him up to get the paperwork done.

I was relieved to finally move into my house in June 1999. I was told that as I only had a 5% deposit a payment protection cover of about £35 per month had been added to my mortgage payments for the first 2 or 3 years (again I can't remember which).

When I came to sell the house I discovered that the mortgage I had been set up with was actually an interest only mortgage but I had no endowment policy as I had requested a repayment mortgage. I cannot tell you how devastated I was. I don't understand how this had happened. I was very clear with the financial advisor that I wanted the repayment mortgage. I was adament about this because my own mother had an endowment that wasn't going to cover her mortgage. Mostly I am devastated because he must have ignored me and I must have signed up to this but I just don't know how I missed it.

I have no idea what the financial implications of this mistake were for me or if there is anything that I can do about it now but I would like some advice if anyone can help. I don't even know where to start if I am to take a complaint forward.

Any help will be much appreciated.

K

McKneff

Did you read the documents before you signed them.

You would have got annual statements too saying you had paid only interest.

I'm sure more people will be along to advise later on.

dunstonh

Firstly, I applied for the mortgage via an independant financial advisor at the estage agent that I bought the house from.

Game over before you start. Mortgage regulation didnt start until October 2004.

I was relieved to finally move into my house in June 1999. I was told that as I only had a 5% deposit a payment protection cover of about £35 per month had been added to my mortgage payments for the first 2 or 3 years (again I can't remember which).

It was not payment protection. That would be MIG. Totally different product.

When I came to sell the house I discovered that the mortgage I had been set up with was actually an interest only mortgage but I had no endowment policy as I had requested a repayment mortgage. I cannot tell you how devastated I was. I don't understand how this had happened. I was very clear with the financial advisor that I wanted the repayment mortgage. I was adament about this because my own mother had an endowment that wasn't going to cover her mortgage. Mostly I am devastated because he must have ignored me and I must have signed up to this but I just don't know how I missed it.

Not good but the problem is your contract would have said interest only. Your statements for nearly 4 years would have showed it as interest only.

I have no idea what the financial implications of this mistake were for me or if there is anything that I can do about it now but I would like some advice if anyone can help. I don't even know where to start if I am to take a complaint forward.

You need to move on as you are barred from complaint in a number of areas.
1 - mortgage regulation not starting until October 2004.
2 - FSA allow timebarring of complaints under the 3 and 6 year rule. That is 6 years from the date of the event being complained about and 3 years from being reasonably aware that there was a problem. 3 years from 2003 meant that even if it had been regulated at the time, the timebar could be applied in 2006.

Also, as you pay very little off in the early years under repayment mortgage and you only had the mortgage for 4 years, it wouldnt have made much difference. Plus, you had lower monthly payments for 4 years. So, it isnt as if you are out of pocket.

roonaldo

I agree with Dunstonh, not only is this pre-regulation it would also be time barred. You're talking of events 13 years ago.

_Andy_

So you were so devastated that you didn't just ring the mortgage company up and say "can you switch me to capital repayment please?"

magpiecottage

kutiez2005 wrote: »

I was only 19 at the time

A young man I know who is only 18 is currently being entrusted with taking part in deciding whether somebody is innocent or guilty of a crime. Whether or not they go to prison could depend on his decision.

If society thinks a person of that age is capable of weighing up such decisions then sorting out what mortgage package to take should, for a 19 year-old be - er - child's play.

Now I am older I realise that I really should have complained at the time but I just didn't have any idea of the real financial implications of what went wrong.

There is your real problem. You have to complain within six years of the original event or, if late, within three years of when you became aware, or ought reasonably to have become aware, that you had cause for complaint.

I applied for the mortgage via an independant financial advisor at the estage agent that I bought the house from.

In 1999 the firm might have subscribed to the Mortgage Code which would have given you the right to complain but unless they were directly authorised by the FSA at some point FOS cannot consider your complaint now and the Mortgage Code's complaint scheme is defunct.

The service I had from this financial advisor was awful, he was rude, pushy and I had to constantly chase him up to get the paperwork done.

That would now be unproveable.

I was relieved to finally move into my house in June 1999. I was told that as I only had a 5% deposit a payment protection cover of about £35 per month had been added to my mortgage payments for the first 2 or 3 years (again I can't remember which).

That sounds like an additional payment required by Nationwide if you borrowed more than 75% (or 80% - I cannot remember the exact figures). This was to build up a reserve in case you defaulted and there was not enough value in the property to clear your debts. Other lenders did not do this but made borrowers pay for a Mortgage Indemnity Guarantee - an insurance policy doing the same job.

I have no idea what the financial implications of this mistake were for me

Pretty small - you pay off very little in the first few years anyway and having the money in your hand may have meant you avoided more expensive unsecured borrowing elsewhere.

kutiez2005

Thanks for the advice guys.

It was a very horrible time for me. I bought the house because I had run away from home and was living in a caravan. As soon as I turned 18 I put a deposit on the house but it was a new build and took longer to get into than I had anticipated. I bought the house with someone who emptied my bank account and took off 2 weeks after we moved in. I struggled to find my feet the whole time I was there. I worked 3 jobs and had paperwork coming out of my ears that I couldn't keep up with. I ate beans on toast once a day, weighed 6 stone and had to choose which bills I could afford to pay. I bore my struggles on my own because I was embarrassed, shy & just couldn't ask for help.

I admire people that have found their way from a young age but for me I dragged myself through those years. So thats how I missed it & didn't realise until I came to sell.

I'm glad that the financial implications would have been minimal. I had been concerned that the extra money they made me pay each month might have been part of something that had been mis sold but I actually feel better knowing that those payments were legitimate.

So I can kick myself knowing that I wouldn't have been any better off & I would've struggled anyway we learn from experience eh!

_Andy_

Kudos for getting through that time in your life, that's awesome