Mis Sold Interest Only Mortgge?

Fritillery

My husband and I remortgaged to consolidate debts a few years ago. He found a broker, made the payments and kept all papers at his office. He passed away about three years later, and I have taken on the mortgage. I have now seen his company accounts and it is clear we never had the income to be able to manage such a large mortgage, even when we were both contributing to the household and in fact we continued to accrue debts. I am now struggling to manage this on my own and cannot remortgage because of the size of the debt and my altered circumstances. I contacted the provider, but they said I must contact the broker, who appears to be uncontactable, possibly gone out of business. What can I do?

dunstonh

I contacted the provider, but they said I must contact the broker, who appears to be uncontactable, possibly gone out of business. What can I do?

Some key things here

1 - When did you apply for the mortgage?
2 - Was this a self certify mortgage?
3 - Any allegation of wrongdoing will come back on you as well as the broker (potentially). i.e. if you committed mortgage fraud then you as well as the broker could be in trouble. If it was self cert then you only get yourself in trouble.

There are very few mortgage complaints. Largely because it takes two to tango. This doesnt mean you dont have grounds for complaint. We dont know enough. Hopefully the above questions will help a bit to see. However, ultimately, you have a property that has risen in value and you knew it was interest only. So, what exactly is there to complain about.

haras_nosirrah

If you can't afford an interest only mortgage how could you afford repayment where the monthly payment would be higher? Presumably the total monthly payment for the interest only mortgage was lower than your previous payment + debt which you paid off when you borrowed the extra money to consolidate it?

I assume you remortgaged because you wanted to keep the house. If you cannot afford the mortgage and are continuing to accrue debt while on interest only then maybe the time has come to sell the house.

Was there no life cover?

csgohan4

I didn't think Life insurance was essential, but if your carrying a mortgage round your neck, might as well take it to your grave so your partner doesn't need to worry

haras_nosirrah

Life insurance isnt mandatory but where not having it would leave your partner/ kids unable to afford to keep their home then i would say it is essential. Of course it is possible that due to ill health it wasnt possible to get it

catwoman73

However, ultimately, you have a property that has risen in value and you knew it was interest only. So, what exactly is there to complain about.

The OP hasn't said anything about her property rising in value and it isn't necessarily the case that it has. In many areas, prices are still below the 2007 peak or have just come back up to that level.

Worst case scenario is that the mortgage was taken out just before the crash and lives in an area where prices have been falling/flat so the OP has little or no equity and a rubbish interest rate as it sounds like it was a self cert product and is stuck.

Maybe the husband did all the legwork and just asked the OP to sign in the right places and unfortunately she trusted him to know what he was doing, which maybe he didn't.

OP, sorry that you are in this situation, it sounds very difficult. To get best advice you probably want to post a Statement of Affairs on the Debt Free Wannabe board.

Then you can get tailored advice because without detail, it is impossible to know what the best way forward is. It is probably also worth including your age and what your pension arrangements are. It could be that it would be best to sell the house and downsize or rent, or it could be that taking in a lodger may help. Bankruptcy may even be appropriate.

People will be able to advise properly once they know your incomings, outgoings, house value, mortgage size, age, etc etc.

Good luck!

kingstreet

Fritillery wrote: »

My husband and I remortgaged to consolidate debts a few years ago. He found a broker, made the payments and kept all papers at his office. He passed away about three years later, and I have taken on the mortgage. I have now seen his company accounts and it is clear we never had the income to be able to manage such a large mortgage, even when we were both contributing to the household and in fact we continued to accrue debts. I am now struggling to manage this on my own and cannot remortgage because of the size of the debt and my altered circumstances. I contacted the provider, but they said I must contact the broker, who appears to be uncontactable, possibly gone out of business. What can I do?

A consolidation mortgage relies on you stopping the overspending which caused the problem.

If the plan involved using funds being diverted from credit payments to addressing the interest-only mortgage in future it would fail if you simply re-draw all that consolidated debt.

dunstonh

Maybe the husband did all the legwork and just asked the OP to sign in the right places and unfortunately she trusted him to know what he was doing, which maybe he didn't.

Quite possibly the case. However, the broker is not responsible for that.

I was at a meeting with the FOS a few weeks back and the issue of interest only mortgage complaints came up and the response was that they see few complaints and the reject most and dont expect it to be a problem in the future. They said that the alternative for most would be renting and that would be dead money whereas the property would have risen in value. And if they continued to borrow against the property then that has given them a lifestyle that they would not have had if they had been renting. That didnt mean they would automatically reject all cases but that was the typical outcome.

Thrugelmir

Fritillery wrote: »

My husband and I remortgaged to consolidate debts a few years ago.

Having remortgaged to consolidate your debts. What steps did you then take to maintain a balanced budget.

we continued to accrue debts

At this point red flags should have waving. What action did you take?

Unfortunately mis-selling isn't a get out for personal responsibility.

getmore4less

If you could never have afforded it you would have probably had to sell.

That may be the way to restore back to that time, sell now.