The FCA, the Finance Conduct Authority issued guidance and governance in October 2004 for all brokers, IFA's and lenders to adhere to and follow.
The Interest Only Mortgage was an easy to sell product and in most cases, no comparison or alternative was offered, no affordability to pay, no income and expenditure checks carried out and more importantly the IFA or broker received a commission payment, so did they arrange or sell you the best mortgage for you, or did they do it because it paid them a substantial commission?
When you took out the Interest Only Mortgage, you were probably very pleased to get the mortgage, we understand that, but you should have been protected by the FCA rules and regulations put in place to ensure the playing field was level and would remain level. Were you asked how you would repay the mortgage? Were you given advice of how you might repay the mortgage? Were you advised that you may need to swap to a repayment mortgage in the future? Were you sold an endowment policy to cover the cost of your mortgage, did it produce what the IFA, the Broker or the Insurance sales person told you or did it fall well short of covering the cost of your mortgage?
There are three major pinch points looming for those with an Interest Only Mortgage and you need to be aware of the consequences of not being able to repay the mortgage.
SAYING YOU WOULD SELL YOUR PROPERTY AND DOWNSIZE IS NOT CONSIDERED AN ACCEPTABLE PLAN
SAYING YOU HAVE A LIFE INSURANCE POLICY AND YOU PROBABLY WOULD DIE BEFORE THE END OF THE MORTGAGE TERM IS NOT AN ACCEPTABLE PLAN
YOU SHOULD HAVE IN PLACE A SUITABLE REMORTGAGE PLAN, A SAVINGS PLAN OR HAVE MADE SUITABLE ARRANGEMENTS TO SETTLE THE MORTGAGE. YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE AND YOU SHOULD SEEK ADVICE IF YOU ARE IN ANY DOUBT ABOUT YOUR ABILITY TO PAY.
Hydrogard Legal Services offer a NO WIN - NO FEE - NO UPFRONT refund service on Interest Only Mortgages that may have been taken out after the 31st October 2004, the date the FCA put in place regulations to protect the Consumer.