Mortgage mis-sold to retired pensioner

shazur4u

Thanks, no documentation on the valuation i meant to clarify. i don't really think he knew what he was doing at the time or even now! I have purchased a property and the paper work was heavy, I just think that things were not done they should have been. Yes, I will ask my brother, its been so long that he has historic amnesia!! I cant get over the fact that a 78 year old was given a 25 tear term! maybe i'm discriminating now...apologies in advance

molerat

£30K over 25 years probably gave an affordable monthly repayment and the bank knew they would get their money back eventually as it was secured on the property.

dunstonh

My Questions are as follows:
1) Can a bank give a 78 year old 25 years to pay off mortgage?
2) There has been no valuation, no documents, can I challenge the bank of ethical grounds?
3) He has no insurance on the house, what happens if he passes away? Implications on inheritance etc?
4) I think the mortgage has been mis-sold to him, English not his first language. Do I have a case to take to the bank?

1 - yes
2 - There will be documents. What ethical grounds?
3 - It is up to the homeowner to insure the property. If he passes away, the debt is offset by assets in the estate. Inheritance will be lower.
4 - He asked for the money. he spent the money. Nothing you have said suggests he couldnt afford it and the interest rate is much lower than equity release. So, the bank have actually increased your inheritance.

The bank will often look to include a family member to be involved to protect themselves from future complaint. His brother sounds like he was involved.

I have purchased a property and the paper work was heavy, I just think that things were not done they should have been.

Whilst lending criteria is tighter today, the documentation requirements are much the same.

I cant get over the fact that a 78 year old was given a 25 tear term!

If he has a secure income for life then why not? Its cheaper than equity release.

getmore4less

Given the lending is not an issue really, If he needed the money this was probably a cheap option.

25 years will pay it off or it is effect a lifetime loan to be repaid by whoever takes on the property (sale or inherited).

I would focus on where that £30k went nearly 30% of value for essential repairs seems on the high side and should have improved the value a lot at the time if it was that bad.

Did you not wonder how he was affording all the work that got done?

I would also look at the terms of the loan and see if it was a decent deal or could be bettered now.

£30k 25y £200pm would have been 6.4% a bit high for now but might have been OK at the time.

10/11 years on that would still owe £22k-£23k that suggests the rate was lower or has gone down.

Was it fixed/variable/SVR/...?


£30k to £16k with £200pm over 10/11 years is a rate of 4.3%-4.8% much better and in the current SVR ranges but still a bit high these days but is does mean it gets paid off in 18 years rather than 25 years if the £200pm continues

davidmcn

shazur4u wrote: »

Thanks, no documentation on the valuation i meant to clarify.

It's the bank's valuation, the borrower doesn't necessarily get to see it. The bank will undoubtedly have valued it somehow, otherwise how do you know they valued it at £100k? If only borrowing £30k they may well not have gone into it in any depth.

What's the difficulty anyway? Are you doubting it was worth £100k? As long as the house is now worth more than the current balance of the mortgage I don't see why this is an issue.

TheBanker

shazur4u wrote: »

Thanks, no documentation on the valuation i meant to clarify.

The valuation is for the bank's benefit. It's basically to answer the question "if this guy stops paying and we have to repossess the house, is it worth enough for us to get our money back?"

On a remortgage of £30k they probably did a desktop valuation and may not have even visited the house. This is perfectly fine.

There's much less paperwork involved in a remortgage than an new property purchase.

goodwithsaving

shazur4u wrote: »

i don't really think he knew what he was doing at the time or even now! I have purchased a property and the paper work was heavy,

Being mis-sold a mortgage and not reading the paperwork / understanding the process are two different things.

AnotherJoe

shazur4u wrote: »

Thanks, no documentation on the valuation i meant to clarify

There wouldn't be any. Perhaps you are confusing it with buying property and getting a survey done, this is very different.

The bottom line is your dad got a great deal and I suspect your brother pulled a few strings to get a better deal than most 78 years could get normally..

Nothing was missold, your dad got his money at a good rate and a much less punitive deal than had he done equity release which is what you'd expect and almost certainly you and siblings will get more inheritance than the alternatives of equity release or the house falling into disrepair and your dad got to enjoy his much needed (your words) renovations . Life insurance wasn't needed indeed had he been sold it then there would likely be grounds for complaint due to its expense !

Hopefully the responses here calm your fears and you can focus on looking after your dad.

shazur4u

Thank you for all the wise responses, very much appreciated. just a slight tangent, If I were to pay the 15K on a 0 percent credit card, Would this be worth it rather than paying the current mortgage?

so 2400 ( 200x12) per year on the credit card then keep switching card or save up to pay full balance in 1 year?

Many thanks

[Deleted User]

Dependinv on the rate, it may be worth it in financial terms, but you may not get that sort of limit on a money transfer card.