Mis Sold?

Orchid01

Hi. I took out a mortgage about 13 years ago. A large part of the income included in the application was child maintenance received from my ex husband. These payments greatly reduced which led me to a DMP and a ccj. My questions are,  should this income have been included as it was not guaranteed? If it is classed as guaranteed income, should it have been for the term of the mortgage? (It wasn't). Would this be a case of mis-selling?

housebuyer143

Orchid01 said:

Hi. I took out a mortgage about 13 years ago. A large part of the income included in the application was child maintenance received from my ex husband. These payments greatly reduced which led me to a DMP and a ccj. My questions are,  should this income have been included as it was not guaranteed? If it is classed as guaranteed income, should it have been for the term of the mortgage? (It wasn't). Would this be a case of mis-selling?

So you want to complain because you got a mortgage and then later your income changed and you got into debt?
It's up to each lender what income they accept and no income in life is guaranteed. You could lose your job the day after you get the mortgage, or end up in a car crash and live on benefits - you can't claim mis-selling because of this. If your income changes so you can't afford the mortgage, it would be expected that you sell and repay the loan.

MorningcoffeeIV

Orchid01 said:

My questions are,  should this income have been included as it was not guaranteed? 

If you were unsure about your future income, you should have left it out or  given yourself some contingency by opting to borrow less.

tacpot12

It could have been a case of mis-selling. Mortgage lenders are supposed to consider the source of income and how likely that income is to be sustained over the life of the mortgage, but when you consider that most mortgages in the UK are sold to people whose only security of income is their job, if lenders didn't take a somewhat relaxed view on security on income, no-one would get a mortgage. Default rates in the UK run at about 1.2% for all mortgages, so some people fail to pay their mortgages every year. 

Would have felt that they had treated you fairly (say compared to someone whose income came from a job that they could be sacked from with nothing other than a redundancy payment) if they had turned you down for the mortgage you applied for because your maintenance income was too insecure? 

ACG

Im going to be really honest... Its complaints like this that make me dubious about helping people in certain situations. 

No it is not miss selling, your circumstances changed after the mortgage completed, that happens. If you did not feel secure in your ex's ability to pay maintenance you should have not included it. And if you did not know he was going to struggle to maintain that amount of maintenance how would a lender? 

dunstonh

should this income have been included as it was not guaranteed?

What income in life is guaranteed?
You can lose your job.

 Would this be a case of mis-selling?

Of course it isn't.   Like above, I find this type of enquiry distasteful.  And lets be honest, if a lender had rejected you, then you would have looked for another.   You got what you wanted and you know your income sources better than any lender would ever do.   If you didn't doubt the income over the term, why should a lender?

kingstreet

I would have carefully documented the limited life of the maintenance and its ending's possible impact on your affordability. Most of us know just how long a client's gratitude for our ability to get them what they need can last...

Zoe02

Not so easy to claim Mis-sold.

The banks also cover themselves most times. 

dunstonh

Zoe02 said:

Not so easy to claim Mis-sold.

The banks also cover themselves most times. 

They cover themselves by doing what is right for the consumer.   All parties win when things are done correctly.

Mishomeister

OK, you believe you were missold...

How about the broker/lender refund you all the mortgage payments you have made. Sounds good?

Then you will need to move out of the house immidiately as you should not be having something that you should've never owned due to alleged misselling in the fist place.

You can have your deposit money back but give any equty that has grown in these years to the bank/broker. You by your own account suggest you should've never owned this houise so should not be benefitting from growth in it's value.

Also, as otherwise you would've rented, to make the things even pay the amount equal to the amount of rent that you would've otherwise paid if you were renting over these years, minus any house repair costs that landlords would cover.

Are you willing to have this tradeoff? As even if you were able to somehow prove you were missold, you have to show that this made you worse off and I have rearely seen someone being worse off owning a property for years as opposed to renting.

Altior

Most likely the children upon which the child maintenance was based on would no longer be children long before the loan was repaid anyway!  So this income would not have lasted for the life of the mortgage, and alternative sources needed to be identified. 

This mortgage came before stress tests, but there should still be plenty of headroom between the income and the repayments, to cope with relatively moderate changes in income.