Millions of UK citizens have purchased mortgages to buy homes that their salaries could not afford in a single payment. Today, there are literally millions of mortgages that are being held by lenders that homeowners are making monthly payments.
A mortgage can essentially be seen as a payment plan to purchase property. Basically, when a person wants to buy property in the UK, but they don’t have the money to pay for the purchase price, they can go to a lender to borrow the money to purchase the property.
If approved, the lender then purchases the property from the seller and the new homeowner must pay the loan or mortgage back within a pre-set time frame. Basically, the homeowner technically owns the property as long as they make payments and fulfill the contract of the mortgage. The lender makes money by charging an interest rate on the money that was loaned.
Once the homeowner has fully paid off the mortgage, they own the property free and clear. If they should not pay off the mortgage, then they must sell the property to fulfill their obligations or the lender has the right to reclaim the property.
In almost all cases, the lender provides a fair mortgage interest rate and reasonable terms to the borrower or homeowner. However, there have been cases in which people were the victim of mortgage misselling.
A mortgage that was sold under false pretenses is can be discovered fairly easily if the mortgage contract and the monthly loan payment bill are readily available to the homeowner. There are generally a few ways that mortgages can be mis-sold.
– The mortgage interest rate is above what the law allows.
– The terms of the mortgage violate the law.
– The lender was dishonest in representing the true language of the mortgage
Such mortgage misselling accounts are relatively few and far between in today’s age of having lawyers check over every detail. However, there has been a new scandal that is related to mortgages that has swept the UK. The misselling of payment protection insurance as part of the mortgage.
Basically, payment protection insurance (PPI) is added to the mortgage, loan or credit card to cover the borrower in case they are unable to make a payment based on an unforeseen event. Generally speaking, illness, injury or unemployment are the most common reasons why a borrower may not be able to make a payment. The PPI then covers the mortgage for a pre-set period of time which allows the borrower to recover and take over the payments again.
It has been revealed that perhaps millions of UK citizens have their PPI mis-sold to them on their mortgages, loans and credit cards. In many cases the PPI interest rates were overcharged, the PPI itself was misrepresented and in some cases PPI was charged when it was not part of the loan.
Today, millions of UK citizens are now checking to see if they were the victims of the PPI scandal.