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By: Emily Vance

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Saturday, 9-Mar-2013 02:45 Email | Share | | Bookmark
Mis Sold Mortgages in the UK

Mis-sold mortgages have recently turn into a media phenomena as everyone have started to speak out about their mortgage repayments being too much and causing countless debt and worried for the property owner. Mis sold mortgages occurred recently over the last 2 years as the property sector saw a tremendous growth spurt by the end of the 80's because of tax breaks and a general interest from people wanting to get onto the property ladder. This growth in the housing and stock market prompted sellers and investor to make high predictions of growth, and thus when motivating property owners and purchasers to secure mortgages they would persist in 'Endowment' or interest- related mortgages as rates were strongly calculated to banks' and lenders favours. By the mid-90's it became very clear that these expectations were much too positive and has caused property owners everywhere to find themselves battling with substantial debt, some even having their house repossessed as the payments become too much and heavily inflated.

An endowment mortgage is a 'Monthly savings plan' that invested in shares of property, designed to pay off the loan on the property after the estimated term. It was the most famous mortgage sold to customers over the late 80's and due to the mis-sold scandals of recent years this kind of mortgage is presently non-existent, although a similar interest-only mortgage is still available, with payments falling and rising with the interest years of that particular time. Many people are now seeking advice and help from the FSA, Financial Services Authority about repaying their mortgages and dealing with the financial debt they have consequently been left in. There are a few indicators to observe for when identifying a mis-sold mortgage and the FSA are currently telling people to be aware of these indicators, enabling them to find professional help and settlement:

• If the mortgage scheme was not entirely discussed to you or you were not informed about the potential shortfall after the mortgage term

• The company selling the mortgage payment informed you as a property owner you would certainly have paid back the loan with the endowment

• The consultant did not assess your monetary circumstances and monthly income appropriately or in details

• The fees and charges weren't spelled out in detail or in any way

• An advisor encouraged or recommended you cash in a current endowment in place for another endowment scheme

• The endowment and mortgage policy was set to run into your retirement but your advisor didn't ensure the salary would be adequate to carry on payments

Million of home owners and individuals with numerous properties were sold the concept of an endowment mortgage with the assurance of a lump sum after 25 years or when their endowment matured, however became rather evident that this only wasn't achievable given the dramatic crash in property rates and the housing sector compared to the high predictions and optimistic perspective investors first stated. If you feel you've been mis-sold your mortgage the suggestion is to speak to the Citizens Advice Bureau or FSA directly and they can provide you more assistance regarding what actions to take.


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