I`ve been stitched up on my mortgage!!!

Arijha

this is arijha's boyfriend with some info regarding this.

the life insurance and critical illness cover were seperate policies and we had one each for both, they were originally from legal and general and was for £190,000 now i have changed it, it is for £325,000 and includes critiacal illness cover and comes from LV, and we are both on the same policy.

we first looked for the house in june 2009 and http://www.tradingeconomics.com/united-kingdom/interest-rate shows the base rate was 0.5% at that time, so we had a 5 year fixed at 6.75% above base. (according to 2 different mortgage advisers this is a HUGH %).

our house insurance was for £80,000 rebuild and £25,000 contents again from legal and general , now it is for £500000 rebuild and £75,000 contents.

so are far as i can tell we are saving a lot of money for much better cover that she sold us.

having read the first 3 pages it seems we were very inexperienced in financial matters but was she not duty bound to act in our best interests? and not in the interest of who gave her the best kickbacks?

kingstreet

Get the sales documentation using a S7 DPA request as I said earlier and see why the recommendations were made.

We do not know your circumstances and what you said to her and what she said to you at the time. The suitability reports for both the mortgage and the protection will do exactly that.

If you have copies of the documentation, you will not have to order it from the agent.

Only this way can you say if the advice was defective and if a complaint has any merit.

So far we've had over forty posts of hot air which is achieving nothing. I've roadmapped what you need to do. Do it and come back and tell us what is in the suitability reports and we might have a go at telling you if it sounds reasonable.

If you decide not to do this, you might as well simply say "we were ripped off" and we all reply "yes, you were" or "no, you weren't" until the cows come home, achieving nothing.

R_P_W

So you really did zero research of your own to check what typical mortgage rates were for your situation at the time? You blindly trusted what is effectively a sales person to act in your 'best' interests.

In reality you got a mortgage that enabled you to buy your house.
You got a range of insurance products that seem to cover your needs.

Was the mortgage a very competitive rate? Doesnt look like it.
Was your insurance competitive? Probably not. But most estate agent advisors only offer from one provider, so probably didn't have any cheaper options to offer you.

You have now realised that maybe you have been paying more than you had to last few years.....chalk it up to experience and move on. No real basis for a complaint and you won't get any money back.

hcb42

If there is a mortgage, then you would have to have had it adequately insured for the full rebuilding cost which would have been on your survey/valuation. I am at a loss how to explain how this has gone from £80K (low) to £500K (high) unless you have some kind of policy which does not require the rebuilding cost to be stated but caps at £500K - and a lot are like this. Same with contents - you either need (or needed) £25K in 2009 or you needed £75K - have you worked out what is the total value of your home contents room by room? £75K is on the high side, unless large house or lots of valuables, £25K is probably a little low these days unless you have a small place.

With regards to the home insurance, a leaky roof does not mean you have an insurance claim - more likely just a home maintenance issue. Home insurance covers for specific perils - fire, theft, smoke, storm and flood etc. It sounds like there was no storm, so no specific storm damage - just like if I drive on a nail, I need a new tyre but I dont claim on my car insurance.

It is folly to compare notes with what your colleagues pay with reference to 'life assurance' - too many variables, and you have to compare like with like - critical illness insurance at £47 sounds cheap to me - basic life term assurance if you were in your 20s and fit and well, it would be high - if you are a bit older, then even basic life assurance could well be £47. Ours (basic joint life term assurance) is a lot more, but I know the reasons why, and more importantly I selected it, no point comparing with colleagues.

your interest rate does look high - but not unusually high, especially as deposit was low - you haven't given enough details here, and equally as you had other quotes you could have walked away. I took a five year fixed out a couple of years earlier and seem to recall it was on about 5.25%, but with much bigger deposit etc, it is not that long ago that interest rates were a lot higher, as indeed were saving rates.

I dont think you have much complaint against this tied adviser, the best thing to do is see when you can switch to a better rate and remortgage.

JuicyJesus

Arijha wrote: »

That is exactly it!!! I completely agree with you there funny thing is, I did make a claim on the house insurance and guess what? they did not pay up. I had a leaky roof and they came to investigate and for them to pay to fix anything there should be 7 tiles blown by a storm, therefore no payment. Like you say, I`ve learnt a lesson. When I buy another house I will go with open eyes. Thank you

Home insurance, which is what you describe there, and protection are two very different things. The insurance you claimed on there was the buildings cover, "mortgage protection" is something entirely different. Home insurance, speaking generally, protects the fabric of the house, and sometimes also your possessions inside it; protection covers the borrower against the risk of losing your job, critical illness or death (depending on what options you choose.)

Do not cancel your buildings insurance, and if you have already done so find new buildings cover NOW. Cancelling the protection is one thing which others have already covered the folly of, but I am 99.99999% certain that it is a firm contractual term of your mortgage that you have buildings insurance sufficient to cover the house's value. At the very least, from your point of view, should your house burn down you will not be left with an expensive mortgage on a pile of ashes to pay if you have buildings cover.

_Andy_

"our house insurance was for £80,000 rebuild and £25,000 contents again from legal and general , now it is for £500000 rebuild and £75,000 contents."

It's not really. You've just got a 'blanket' cover - the policy would never pay out £500k for your house nor £75k for the contents.

JuicyJesus

_Andy_ wrote: »

"our house insurance was for £80,000 rebuild and £25,000 contents again from legal and general , now it is for £500000 rebuild and £75,000 contents."

It's not really. You've just got a 'blanket' cover - the policy would never pay out £500k for your house nor £75k for the contents.

Indeed, I don't see how anyone could think it would work that way. Were that the case you could buy a £100k house, get the £500k blanket cover and then immediately realise a £400k profit.

Well, £400k less the cost of the petrol and the matches.

ACG

It doesnt matter what the bank of england base rate was, it matters what the lenders interest rates were.

The chances of 1 lender having 7% interest rate and everyone else charging 3% is very slim - unless they were not looking to lend any money.

Here is a link which isnt exactly accurate as its relating to the US market but rates were on average around 5.2% at a similar time - http://www.bankrate.com/finance/mortgages/interest-rate-roundup-march-26-2009.aspx

Try to find out what lenders (not the bank of england) were charging at that point in time and that will give you a more accurate reflection.

kingstreet

7% for a 5 to 7 year fix at 95% to 100% was typical for 2009.

_Andy_

Article dating 2009 suggests average rate at time 6%

http://www.marketoracle.co.uk/Article11668.html

Also see

http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/5622101/Mortgages-Fixed-rates-could-reach-6pc-within-weeks.html

Anyway, as has been mentioned, zero point speculating on the OP's rate as we know nothing about their circumstances. And of course the base rate isn't relevant nor is what their friends may have.