Have My mother been mis-sold a mortgage?

RedRobbo

ACG wrote: »

There does seem like there is something missing.

But rather than blaming the lender, the person at fault here seems to be your sister (and her employer). Why has she talked your mum in to converting to a buy to let mortgage and borrow an extra amount knowing that her income is not enough and that it will mean it does not get paid off?

Because she wanted the money and still lives with my mother not contributing at the age of 31, general not a nice person, but she is my sister.

RedRobbo

Thrugelmir wrote: »

Sounds like there's something missing from this tale.

Money hungry London mini driving estate agent.

RedRobbo

davidmcn wrote: »

A 100% interest-only BTL mortgage? Did such things exist, even in 2008?

There might be negative implications for mum if she confesses to the mortgage company that it isn't a BTL property.

Also, what remedy is she expecting, if she's not arguing that she could have been legitimately sold a better deal for a £700k mortgage? She still owes the money.

Hi Sorry, total outstanding is £375,000, I am trying to understand the best deal I can get for my mother in downsizing her property to something we can buy outright. I believe the Mortgage company new that the property was not BTL, but will found this out.

RedRobbo

Keith99 wrote: »

She borrowed upto the valuation then? Which was higher than local estate agent valued it at?

What is the property worth now, can she sell it and move some where smaller?

outstanding mortgage is £375,000, sorry my fault.

I think I can sell it for £450,000 tops, not leaving anything let to purchase a house for really.

RedRobbo

SavingSteve wrote: »

Where did the extra money she borrowed go?

high society, don't feel sorry, just a son trying to do his best.

AllyMac

Bought for £325K in 2002, worth £500K in 2008.
Or possibly more.
Presumably that's a top-of-the-market-just-before-crash 2008 valuation?
What's it worth now? Gone back to £500K?
Given that your mother is in the north, even if she's in an inflated pocket of high prices, she has a lot of scope to move not to far away for lower cost housing.
If it's worth anywhere near £500K again now (which seems possible, 8 years on) then she can sell up, pay off the mortgage and afford a £125K ish property which is probably far more suitable for running costs if she has £14K per year. (or more, if that's not including state pension)

I'm not inclined to blame it all on a greedy daughter as your mother could easily know exactly what she was doing too, claiming a BTL that wasn't. Older doesn't automatically mean stupid or vulnerable!

You certainly shouldn't be throwing good money after bad bailing them both out.

Your mother is lucky to have the equity left (I think) to end this mess.

poormaria

It sounds like everything was explained and despite knowing the costs and the fact it would be interest only, still released the money. I do feel sorry for you and understand you are just trying to do the best for your circumstances but its not fair to drag someone else into it who arranged the mortgage unless they GENUINELY missold the mortgage, you could be costing someone their job.

Not that you are doing this as I don't know the full story but many people don't understand that when they put a complaint in, especially when they have been told to 'give it a go, nothing lost' by someone that each complaint, no matter how small, costs that adviser hundreds of pounds, even if the complaint gets knocked back

I would focus on selling the house, and she WILL be able to buy something, Unfortunately spending all that money on money does have consequences and maybe those consequences are an area that is not as nice/further away

Good luck

Thrugelmir

RedRobbo wrote: »

Mother has used the money for spending, nothing else so please don't feel sorry for her.

Then sounds as if she was equally party to the arrangement. Not just advised. One wonders if you've been told the whole story as well.

elsien

Why are you bailing mum out when sister is not contributing?

AllyMac

Crossed post! So, tops £75K equity. Less than I hoped for you, sorry.

My point stands about the scope for lower cost housing in the north though.

She's over 55 so also scope for shared ownership retirement properties perhaps?

There are some lovely 1 bed flats in Halifax for £100K.

Any chance of you taking out the mortgage for the remainder, but reflecting that in the ownership so your investment is protected from care home fees / death?