Interest Only Morgage - Was it missold to my 75 year old farther

Markr10

Hi, I am a newbie here so i hope i am following the correct protocol!

I beleive my farther was missold his Interest only morgage by the bank, he was 75 when the bank sold him the morgage. My farther passed away at the end of 2022 and we have now discovered this now as myself and my sister as his benificiaries are liable to pay this off. Since his passing we have been making payments but the balance is barley coming down with it still having a balance of £29K. 

We have discovered he was retired (75yrs) at the time with no income other than a pension to pay his morgage. He took it out less than a year after my mother the loint morgage and property owner passed away and we belive he suffering with grief at the time. He was also a few years later diagnosed with dimensia.

How do we go about finding out if this was missold and if we are able to make a claim?

Any advise will be appreciated

DE_612183

I doubt it - he would have signed the documents and probably a form to say that he was aware of his options and the products discussed.

Unless you have medical evidence that at the time he was not in a fit state there is little you can do - and even then if you can prove something there was no POA in place, and even if that was there the fact of the matter is that the loan was to pay of a debt.

I presume he owned the property after his wife died and took out a mortgage to release some equity - what happened to that money - it still has to be paid back from his estate like any other debt he incurred.

comeandgo

If it’s an interest only mortgage the balance won’t come down, it’s only the interest being paid.

TheSpectator

Advice - sell the property and settle the loan. I'm sure that was your father's intention when he took the equity release.

Highly unlikely an equity release would have been mis-sold, income ia not really a factor with the loan being paid off once the property has been sold.

Mark_d

This sounds rather odd.  A 75 year old was sold a mortgage with no significant income?

I've recently applied for an interest only  mortgage.  I've had to prove a healthy income as well as demonstrate, with a high degree of certainly, how I can repay the mortgage.

Is it possible that your father already has a mortgage on the property, and the bank agreed something so that your father could continue living there?  If he could barely pay the interest on a mortgage - what do you think would happen if he was required to pay capital+interest each month?

Markr10

DE_612183 said:

I doubt it - he would have signed the documents and probably a form to say that he was aware of his options and the products discussed.

Unless you have medical evidence that at the time he was not in a fit state there is little you can do - and even then if you can prove something there was no POA in place, and even if that was there the fact of the matter is that the loan was to pay of a debt.

I presume he owned the property after his wife died and took out a mortgage to release some equity - what happened to that money - it still has to be paid back from his estate like any other debt he incurred.

We werent aware that he had done this so if he did realease equity we dont know what happened, we cannot find any documentaion.

Markr10

Mark_d said:

This sounds rather odd.  A 75 year old was sold a mortgage with no significant income?

I've recently applied for an interest only  mortgage.  I've had to prove a healthy income as well as demonstrate, with a high degree of certainly, how I can repay the mortgage.

Is it possible that your father already has a mortgage on the property, and the bank agreed something so that your father could continue living there?  If he could barely pay the interest on a mortgage - what do you think would happen if he was required to pay capital+interest each month?

We are not sure why he did it, but we think the original morgage was converted to the interest only morgage after my mother passed as he lost some of the income from her pension.

grumpy_codger

Markr10 said:

I beleive my farther was missold his Interest only morgage by the bank, he was 75 when the bank sold him the morgage. 

Why do you think he was mis-sold? His income was sufficient for interest-only, and even with a bigger income he was unlikely to qualify for repayment mortgage because of his age. Essentially it was equity release, very common for this age. Would you prefer him keeping making repayments and being skint?

My farther passed away at the end of 2022 and we have now discovered this now as myself and my sister as his benificiaries are liable to pay this off.

Yes, he used part of your inheritance for his own benefit. 

RAS

So, he made an arrangement that let him continue living in his home whilst paying interest instead of rent. As opposed to selling up and buying somewhere cheaper, with all the costs and upheaval involved?

It's unfortunate that you'd not realised this sooner, and perhaps been able to sell sooner. But the conveyancer will have to pay off the mortgage before transferring the equity to you.

FlorayG

Markr10 said:

Mark_d said:

This sounds rather odd.  A 75 year old was sold a mortgage with no significant income?

I've recently applied for an interest only  mortgage.  I've had to prove a healthy income as well as demonstrate, with a high degree of certainly, how I can repay the mortgage.

Is it possible that your father already has a mortgage on the property, and the bank agreed something so that your father could continue living there?  If he could barely pay the interest on a mortgage - what do you think would happen if he was required to pay capital+interest each month?

We are not sure why he did it, but we think the original morgage was converted to the interest only morgage after my mother passed as he lost some of the income from her pension.

If this is the case then I don't think he was mis-sold; it would have been that or sell the house and move to a cheaper one. If your home is still mortgaged when you are 75 there are very few options available if you can't make the repayments and change to an interest only would massively reduce the monthly payment
Are you able to speak with the mortgage advisor at the bank? They may have records of conversations with your faher

MWT

Markr10 said:

Mark_d said:

This sounds rather odd.  A 75 year old was sold a mortgage with no significant income?

I've recently applied for an interest only  mortgage.  I've had to prove a healthy income as well as demonstrate, with a high degree of certainly, how I can repay the mortgage.

Is it possible that your father already has a mortgage on the property, and the bank agreed something so that your father could continue living there?  If he could barely pay the interest on a mortgage - what do you think would happen if he was required to pay capital+interest each month?

We are not sure why he did it, but we think the original morgage was converted to the interest only morgage after my mother passed as he lost some of the income from her pension.

You need more details about the mortgage and dealing with that is the responsibility of the Executor(s) of his estate, is that you and your sister?

If so then you are not personally liable to repay the mortgage, but you are responsible for disposing of his assets (the property for example) to repay the mortgage.

Are you trying to retain the property instead of selling it? ... are there other assets that could be used repay the mortgage?

There are more questions than answers at the moment, but if your are the executors and you are finding the process overwhelming then you may need to seek help from a solicitor....

Nothing you have said so far suggests mis-selling, and it sounds more like a supportive lender allowing him to remain in the property when he would otherwise have been unable to do so...

Edit: Just noticed that your father passed away over 2 years ago, what has happened between then and now in terms of settling his estate and communication with the bank? I assume the bank have been informed of his demise, and you have not just been keeping the payments going...?