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

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  • ACG
    ACG Posts: 24,550 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    Markr10 said:
    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. (His age does not matter) 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 (that sounds normal for an interest only mortgage)
    We have discovered he was retired (75yrs) at the time with no income other than a pension to pay his morgage. (he had an income which was enough to pay the mortgage as there was no financial difficulty from what you say). 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. (but he had not been diagnosed with dementia at the time).

    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

    I dont mean this to come across as heartless, I am just trying to be factual...

    His age is not a factor.
    His income was sufficient. 
    He had no diagnosed health issues which would affect his decision making (or require the bank to take extra care).

    I am not one to beat around the bush... Your complaint is basically the bank should not have sold him a mortgage because of his age, income, your belief he was grieving and possible undiagnosed dementia. 

    The only part that would really play a part in a valid complaint is grief and him not being in the right head space to make the right decision. However, with you not being party to the conversation you would struggle to argue that. If he used the money to go travelling or something, it could be argued that was a good thing for him. 

    What did he actually spend the money on? 

    I dont want to discourage you from making a complaint, but there is nothing you have said that makes me think it was miss sold. Miss bought maybe, but it depends on what the money was used for I suppose. Maybe speak to the bank. 


    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • beckstar1975
    beckstar1975 Posts: 650 Forumite
    Part of the Furniture 500 Posts Name Dropper
    My parents also have equity release on their house, and we are all aware that there will likely be nothing for us to inherit when they both die. We are happy they were able to release some money to enjoy retirement and remain living in the family home. This is what equity release is good at, providing stability and more money (and hopefully a better quality of life) for people once they stop earning.

    You say you are liable, surely that's the estate? And the mortgage company can only have what exists once funeral costs have been paid? You should not personally be liable for any shortfall should there be any . . That was one thing we clarified - that we wouldn't personally be liable should they end up living for another 50 years and the house tanks in value . . .

    :eek::eek::eek: LBM 11/05/2010 - WE DID IT - DMP of £62000 paid off in 7 years:jDFD April2017
  • Hoenir
    Hoenir Posts: 7,742 Forumite
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    Markr10 said:
     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. 

    The executors of your late father's estate have failed in their legal duty. This matter should have been addressed some years ago.

    Was the mortgage lender even informed of your father's passing? 

    Who resides in the property? As the mortgage hasn't been discharged the property remains in your father's name. Potentially a CGT liability may now arise. 
  • MWT
    MWT Posts: 10,212 Forumite
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    ACG said:

    What did he actually spend the money on? 

    I dont want to discourage you from making a complaint, but there is nothing you have said that makes me think it was miss sold. Miss bought maybe, but it depends on what the money was used for I suppose. Maybe speak to the bank. 


    I'm not sure that there actually was any money as it is at least possible that this was just an existing repayment mortgage that was converted to interest only, rather than equity release, but there is so much information missing at this point it is hard to tell...

  • dunstonh
    dunstonh Posts: 119,645 Forumite
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     Since his passing we have been making payments but the balance is barley coming down with it still having a balance of £29K. 
    The clue is in the name.  "interest only".   ie. you pay the interest only.  Its not a capital and repayment mortgage where the balance goes down.

    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.
    Can we assume that the joint mortgage meant your father was the other joint borrower?
    If so, then your father either continues the mortgage as the surviving borrower or he sells up and repays the mortgage.

    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.
    as you say, it was likely down to affordability following a reduction in income.     The lender, rather than evict him because it was unaffordable, allowed conversion to interest only so he could stay in the house with a repayment figure that was affordable.    

    How do we go about finding out if this was missold and if we are able to make a claim?
    Nothing you have said has any hint of missale.   The debt was already in place.    The change sounds like it is for affordability.   All quite logical and normal.   The alternative being to repossess the property because he couldn't afford the repayments.

    and we have now discovered this now as myself and my sister as his benificiaries are liable to pay this off. 
    The beneficiaries are not liable to pay this back.   The executor of the estate is required to pay it back.  The beneficiaries receive the net value of the estate.


    As a note to some of the responses, it appears that some are interpreting your post as if he took out a further advance or new mortgage or equity release but I am interpreting your post as it being a joint mortgage that already existed with your mother, who then died and your father became the sole borrower.   You may wish to verify which it is so the responses are correct for the scenario. 


    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • ACG
    ACG Posts: 24,550 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    MWT said:
    ACG said:

    What did he actually spend the money on? 

    I dont want to discourage you from making a complaint, but there is nothing you have said that makes me think it was miss sold. Miss bought maybe, but it depends on what the money was used for I suppose. Maybe speak to the bank. 


    I'm not sure that there actually was any money as it is at least possible that this was just an existing repayment mortgage that was converted to interest only, rather than equity release, but there is so much information missing at this point it is hard to tell...

    I hadnt considered that. Good point.
    Although if that were the case, its harder to argue miss sold I think. 
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • Keep_pedalling
    Keep_pedalling Posts: 20,765 Forumite
    Tenth Anniversary 10,000 Posts Name Dropper Photogenic
    Are you and your sister the executors? If you, are why is the administration taking so long? If someone else I’d you need to give them a good kick up the backside. The longer this goes on the more the beneficiaries are losing, 
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