Parents mis-sold mortgage 10 years ago.

Danyúl_II

Hi,

My parents are entering retirement age (Dad is 65, Mum 52) and still over 30k on their home and have no realistic way of paying it off.

They were allowed to extend their mortgage by 13 years, meaning the Halifax allowed them to extend it until my Dad is 78, which is completely useless.

I know that they shouldn't have accepted it because who can pay it off at that age, but should they have been sold the mortgage, and does anybody think they may have a case?

They have been on the mortgage for years and years and initially bought the house for 35k, and still have 31k left to pay because of this extended mortgage on super low payment rates, and my Dad has no money in the bank, but it still working, she only earns 250 quid a week and it's been on interest only for around three years.

They are really worrying about this (more so my Mum tbh) so I said I'd come to my favourite little forum and ask those who are more informed than me!

Thanks for any help.

PS I have read and understood this:
https://www.moneyadviceservice.org.uk/en/articles/financial-mis-selling-what-to-do-if-you-think-its-affected-you

However I'd like to hear a few opinions to find out whether it might be a complete waste of our time. They are both useless with technology and this sort of thing and I live abroad, so proceeding with that is going to be a very time-consuming process.

Thanks again.

dunstonh

They were allowed to extend their mortgage by 13 years, meaning the Halifax allowed them to extend it until my Dad is 78, which is completely useless.

What was alternative?
People extend their mortgages to reduce their payments. if they couldnt reduce their payments 10 years, what would they have been unable to afford the payments and lost the house?

If they borrowed more at the same time, what did they spend their money on? Was it to repay other debts they already have or did they buy something with it?

They are really worrying about this (more so my Mum tbh) so I said I'd come to my favourite little forum and ask those who are more informed than me!

Nothing to worry about. They keep paying it whilst they are working and then transfer it to equity release on retirement if they cannot afford to pay it any more.

Based on the very little information available, there doesn't appear to be any mis-sale. Whilst going past retirement age is not ideal, it only requires an extra risk warning on advised cases. Also, it appears your mum will still be under state pension age at the time of redemption.

Lenders did lend too much too easily but people borrowed the money to spend. Even if a complaint was made and it was unusual in being upheld, they wont get the mortgage paid off. That isnt how it works. People do not get rewarded for borrowing money to spend for their lifestyle only to complain about it later.

If a complaint is to be made, it would need to be known why they borrowed more and why they extended the mortgage term. If the debts already existed on personal loans and credit cards then transferring expensive short term debts to cheaper mortgage rates can be a good thing to do. As your mum is still of working ability for the whole of the mortgage term, that would need to be explained away.

Also, the fact they moved to interest only 3 years ago suggests a problem with their finances and this probably goes back longer than 3 years ago. Probably goes right back to before they changed the mortgage. If so, none of this is mis-sale. This is just living beyond means.

Equity release is a possible option to consider. It would take away the problem as it would allow the debt to be repaid on death from the sale of house without payments in the interim.

Goldiegirl

I worked at the Halifax at a time when lending into retirement was permitted.

On each case where lending over the age of 65 was going to occur, the file had to be fully noted to confirm that this had been discussed with the applicant, and that they had plans in place so they would be able to continue making their monthly payments.

I don't think there could be a case for mis-selling, as this would have been fully discussed, and the Halifax would be able to produce confirmation that it had been discussed.