Wrong mortgage advice?

NYClaire

I was wondering if anyone had any thoughts or experience.

We got our 1st mortgage in 2006 with Northern Rock. It was a together mortgage. 100% mortgage with extra funds. The amount we received was £73k. We were only 21 (and absolutely clueless and naive to the whole situation tbh) and on low incomes so this was great to get us on the ladder as without it we would’ve had no chance.

We were fixed for 2 years. After the 2 years was up, someone came to our door from a company called Morgage matters partnership and my husband informed him our rate was ending soon. Over the 2 years we now had a substantial amount of debt. (Again young, naive, not totally aware of the real costs of running a household). If I remember we had a 7k bank loan, and a card credit maybe about 2k (possibly other things).

Anyway, this company advised us to take out the new mortgage with Chelsea Building Society totally 73k again. However instead of just clearing the the whole amount with NR we were to pay the secured mortgage part of £60k, use the other £13k to pay off our debt (and their fees which I recall being quite a lot) and to leave the unsecured loan with NR runnning. This is what we did. We were fully aware of what we were doing and felt like it was a good idea as we were paying off the debt. However we now had a mortgage payment AND a loan payment. The payments for both of these totalled around £650 which now I am more educated on this older and wiser is ridiculous.

So we plodded along paying both the mortgage and the loan. As both the went of to variable rate once the interest rates went down so did our payments, quite considerably. In 2012 we received a letter from NR regarding wrong information given on letters so the debt was cut in half from around 10k to 5k and instead of changing the payment anouts they reduced the term (which was still running at around 19 years). This loan was cleared last August so finally free!

A few months back I heard about mis selling on wrong advice after seeing an advert and wondered if this was our situation. (Based on using a mortgage to consolidate loans). I decided against it though as we knew exactly what we signed up for and the company seemed quite dodgy, high % and a year to complete and forgot about it.

Yesterday I received a letter for the fcsc as we were customers of the company who are no longer trading as we may have a claim? The require a lot of documentation which Chelsea are happy to provide, original application form, mortgage offer and who recommended us to them.

Is this worth persuing?

Thank you if you have read all of this!!

kwame41

Nothing ventured nothing gained!

The advice you were given was appalling. Whether it amounts to mis-selling remains to be seen.

Even if it takes you a lot of time to get all the relevant paperwork etc together could be time well spent.

ACG

Playing devils advocate, there is not enough to say the advice was good bad or indifferent.

On the face of it, it does not sounds great. However you may have been paying 19% on the credit cards, meaning it makes more sense to clear those over the lower rate on the loan.

If you think you were given poor advice, by all means speak to the FSCS that is what they are there for.

kingstreet

The NR Together product required discipline.

It was brilliant for getting rid of card debt and re-scheduling it on a penalty-free unsecured loan. It meant making overpayments to pay it back faster rather than simply taking the savings and blowing them again.

It sounds like after the NRT was taken, more debt was run-up which then "needed" a remortgage, leaving the NR unsecured loan de-linked and at a higher rate.

Eventually, the house of cards falls down.

OP - don't see this as criticism of you personally. I saw a lot of this in the mid 2000s.

NYClaire

Thank you for your comments.

As I said before it’s one of those things where we knew why the advice was offered and that’s why I didn’t persue it before.

My thoughts were just wondering why we had recieved the letter from the Fcsc. It stayed that the co ay was no longer trading. Is this normal practice to mail all people who used them?

Thrugelmir

Is the letter from the FSCS specifically referring to your mortgage account? More likely they are interested in people that have invested money through them. In some way been scammed. Your name may simply be on a customer database.

parking_question_chap

NYClaire wrote: »

I was wondering if anyone had any thoughts or experience.

We got our 1st mortgage in 2006 with Northern Rock. It was a together mortgage. 100% mortgage with extra funds. The amount we received was £73k. We were only 21 (and absolutely clueless and naive to the whole situation tbh) and on low incomes so this was great to get us on the ladder as without it we would’ve had no chance.

We were fixed for 2 years. After the 2 years was up, someone came to our door from a company called Morgage matters partnership and my husband informed him our rate was ending soon. Over the 2 years we now had a substantial amount of debt. (Again young, naive, not totally aware of the real costs of running a household). If I remember we had a 7k bank loan, and a card credit maybe about 2k (possibly other things).

Anyway, this company advised us to take out the new mortgage with Chelsea Building Society totally 73k again. However instead of just clearing the the whole amount with NR we were to pay the secured mortgage part of £60k, use the other £13k to pay off our debt (and their fees which I recall being quite a lot) and to leave the unsecured loan with NR runnning. This is what we did. We were fully aware of what we were doing and felt like it was a good idea as we were paying off the debt. However we now had a mortgage payment AND a loan payment. The payments for both of these totalled around £650 which now I am more educated on this older and wiser is ridiculous.

So we plodded along paying both the mortgage and the loan. As both the went of to variable rate once the interest rates went down so did our payments, quite considerably. In 2012 we received a letter from NR regarding wrong information given on letters so the debt was cut in half from around 10k to 5k and instead of changing the payment anouts they reduced the term (which was still running at around 19 years). This loan was cleared last August so finally free!

A few months back I heard about mis selling on wrong advice after seeing an advert and wondered if this was our situation. (Based on using a mortgage to consolidate loans). I decided against it though as we knew exactly what we signed up for and the company seemed quite dodgy, high % and a year to complete and forgot about it.

Yesterday I received a letter for the fcsc as we were customers of the company who are no longer trading as we may have a claim? The require a lot of documentation which Chelsea are happy to provide, original application form, mortgage offer and who recommended us to them.

Is this worth persuing?

Thank you if you have read all of this!!

If anybody knocks on your door asking to provide a service then my advice would be to shut it in their face as quickly as you can.

NYClaire

Yeah we’ve kept the door locked after that 😂😂😂

NYClaire

Thrugelmir wrote: »

Is the letter from the FSCS specifically referring to your mortgage account? More likely they are interested in people that have invested money through them. In some way been scammed. Your name may simply be on a customer database.

No not our mortgage specifically. Just that we were a customer. The letter wasn’t actually addressed to us either. Just the address appeared.

poppy10_2

NYClaire wrote: »

No not our mortgage specifically. Just that we were a customer. The letter wasn’t actually addressed to us either. Just the address appeared.

Are you sure it's actually from the FSCS, and not just a scam? Sounds fishy to me. Double check the details before you send any personal documents.

NYClaire

poppy10 wrote: »

Are you sure it's actually from the FSCS, and not just a scam? Sounds fishy to me. Double check the details before you send any personal documents.

I checked all the details on the letter and their website and seems legit. I also came across this article today from October last year.

https://www.fca.org.uk/news/news-stories/information-customers-mortgage-matters-partnership-tmmp