Think i was Miss sold an Interest only morgage

gj373

nelly1970 wrote: »

does this make sense do I have a claim ?

Doesn't sound like it

PasturesNew

When choosing your mortgage, you probably had a conversation like this:
1/ £300/month, interest only.
2/£500/month, capital repayment.
Which do you want?

And you said "ooh £300.... thank you".

garth549

If you weren't saving up to pay the capital of the mortgage then you were effectively just renting the house at a cheap rate.

Unless you can prove that you could afford a repayment mortgage at the time (with 70k of debt I very much doubt it) and whoever sold you the mortgage erroneously pushed you towards interest only then I can't see that you'd have any claim or recourse. Sorry.

davidmcn

nelly1970 wrote: »

I took out a mortgage in 2006 we had 70k of debt and the advisor found us a lender at a higher interest rate to lend us the money the property was 145k
The lender advised us to go for interest only as it was lower repayments. we had to take our life insurance for both of us through the broker so that in the event one of us died the whole amount of the loan would be payed this is still in place.
we were gifted some money to pay our debt off. this I feel is irrelevant as my issue is we had debt and there fore the lender knew we couldn't pay the mortgage as the debt inc bills was more than what was coming into the household. We have however never defaulted on the loan.
we were advised to set up a savings plan to pay the mortgage off. how we could do this is I don't know as we were in debt.

does this make sense do I have a claim ?

What is it you're going to claim? I can't see that you've suffered any loss.

csgohan4

nelly1970 wrote: »

I took out a mortgage in 2006 we had 70k of debt and the advisor found us a lender at a higher interest rate to lend us the money the property was 145k
The lender advised us to go for interest only as it was lower repayments. we had to take our life insurance for both of us through the broker so that in the event one of us died the whole amount of the loan would be payed this is still in place.
we were gifted some money to pay our debt off. this I feel is irrelevant as my issue is we had debt and there fore the lender knew we couldn't pay the mortgage as the debt inc bills was more than what was coming into the household. We have however never defaulted on the loan.
we were advised to set up a savings plan to pay the mortgage off. how we could do this is I don't know as we were in debt.

does this make sense do I have a claim ?

How much did you declare your total income was? or was it a self certification mortgage?

I assume they knew about the debt?

Mortgage regulations in 2006 were not as strict as they are now, as above most 'mis sold' interest only claims failed

Did you read the mortgage conditions and key facts before you signed, that you would be paying x amount while still servicing debt?

People can and do downsell to pay of the mortgage as well as an acceptable payment vehicle

foxy-stoat

nelly1970 wrote: »

we were gifted some money to pay our debt off. this I feel is irrelevant as my issue is we had debt and there fore the lender knew we couldn't pay the mortgage as the debt inc bills was more than what was coming into the household. We have however never defaulted on the loan.
we were advised to set up a savings plan to pay the mortgage off. how we could do this is I don't know as we were in debt.

does this make sense do I have a claim ?

This is never going to fly.

You were told to set up a savings plan. Assuming it was a 25 year mortgage, you would of needed to save £483.33 a month in an account with zero interest - so the actual monthly amount would of been a lot less due to the additional interest you could of earned.

Unless the other repayment strategy was to sell a year or so before the end of the term and clear the mortgage that way, any increased value over the 25 years would be yours.

Since you cleared the £70,000 debt through gifted money, how much have you saved as you wouldnt of needed to make the monthly payments for this debt?

Cscott139

what would you have done if they said no to the loan at this time?

SonOf

nelly1970 wrote: »

I took out a mortgage in 2006 we had 70k of debt and the advisor found us a lender at a higher interest rate to lend us the money the property was 145k
The lender advised us to go for interest only as it was lower repayments. we had to take our life insurance for both of us through the broker so that in the event one of us died the whole amount of the loan would be payed this is still in place.
we were gifted some money to pay our debt off. this I feel is irrelevant as my issue is we had debt and there fore the lender knew we couldn't pay the mortgage as the debt inc bills was more than what was coming into the household. We have however never defaulted on the loan.
we were advised to set up a savings plan to pay the mortgage off. how we could do this is I don't know as we were in debt.

does this make sense do I have a claim ?

Nothing you have suggests you have a valid complaint.

Hypothetical scenarios are never taken into account in complaint resolution. So, the fact is that you ended up with a property that has almost certainly risen in value. So, you have made a financial gain. The alternative is not a repayment mortgage as you say you could not afford that. So, that would mean renting. And renting is more expensive than an interest only mortgage.

So, your complaint is that you should have never have been given a mortgage and should have continued renting. Even if your complaint was upheld, the FOS position in these is to compare the financial position today with renting. If you have gained in property value and your mortgage is less than the equivalent rent then you are better off and have no financial losses to be reimbursed.

There was nothing wrong with taking out an interest only mortgage pre credit crunch (FOS have confirmed that in complaint outcomes). And you confirm you were advised to take out a repayment vehicle. That is the correct advice. So, no wrong doing there either.

So, in all, no wrongdoing appears to exist and you are almost certainly better off because of what you did rather than rent.

amnblog

I am afraid that regardless of the rights and wrongs of any advice provided you will have no recourse due to the time elapsed.

sebtomato

nelly1970 wrote: »

The lender advised us to go for interest only as it was lower repayments.

He was surely right on that front, since interest-only mortgages have... zero repayments!!!