WIBU to ask for compensation? Advice please?

[Chebs]

This is long, and a bit boring so apologies in advance. I will try to be quick and concise!

DH and I took out an ISA in 2014 that was a 'save to buy' ... promising a 95% mortgage on successful application after 3 months of paying Min £50 per month in. We explained our position at length to the advisor, we already had a mortgage on our current property, and had no plans to sell. We wanted a fixer upper as a 2nd property and would eventually move into 2nd property, renting out our flat. All fine, ISA set up.

FF to now. A property comes on the market that is absolutely everything we want. Location, price range, no of bedrooms, parking etc etc. I immediately book a viewing with EA and an appontment with bank for decision in principal... again explain our plans and outlining the terms of the ISA mortgage deal as it is now considered an old product - was only available to apply for 6 months.

Estate agent emails me the next day advising that the vendor will be taking best offer one hour after our planned viewing time... and I need decision in principal sorted to be considered a serious applicant. I call bank and reconfirm my details, and our plans twice with two different operators who confirm that all would be well and get put through to mortgage applications department who will orchestrate this now for us - all good and happy. I am then advised that, after consideration and looking over the ISA deal details, we would never have been offered a 95% mortgage on a second property and the best they can do it an 85% mortgage.

This was last week, and I was actually breaking down on the phone to the poor advisor, who actually handled herself and me brilliantly in that situation. She confirmed that we had been incorrectly advised twice (calls recorded) and that she would record the complaint so a manager would get back to me.

I have just taken a call from the manager of the bank who confirms that there are no firm stipulations wrt the 2nd mortgage, and that there are a lot of grey areas here. He asked me what I wanted to come from this and my answers were 1) for staff to have better training and knowledge on the products they were both selling and advising on and 2) for some form of compensation from them for missing selling us a product. He agreed that we had been miss sold the ISA and the terms were not clear, and is going to come back to us tomorrow on a figure.

So. I think we are entitled to something, as we put our faith in the ISA options for 2 years, had our dreams lined up and ready - then whipped out from underneath us. I would be interested in others opinions and advice on how to handle this though.

[RhiWrites]

I think they should honour what they sold you, myself.

[LurkingHusband]

(well this is AIBU)

were save-to-buy meant to help people buy second homes ? I think I missed that bit ...

[Meandyouandyouandme]

Yes I thought it was for FTB only

[AnchorDownDeepBreath]

Is this the Government ISA scheme?

If it is, the T&Cs are clear:

"To qualify for a Help to Buy: ISA you must:
be 16 or over have a valid National Insurance number
be a UK resident be a first time buyer,
and not own a property anywhere in the world
& not have another active cash ISA in the same tax year: If you have opened a cash ISA this tax year, you can open a Help to Buy: ISA but will have to take additional steps.

See the FAQ for more detail. - See more at: www.helptobuy.gov.uk/help-to-buy-isa/who-is-eligible/#sthash.ybaLlRaL.dpuf"

If the advisors got that wrong, they owe you compensation for the distress caused - a couple of hundred tends to be standard when there is misselling on this scale. There might be little else they can do, because the bank will still need to comply with all the other financial legislation re not overselling, passing affordibility tests etc. They would be on dodgy ground if they let you borrow more than they should, or offered you another financial product to bridge the gap if that's not affordable in the official sense.

Did you get any documentation when you started the ISA? You should have got a booklet with the above T&Cs in.

[Discobabe]

Presumably there was must have been some t&cs given out at some point which you agreed too ? (Although I once got compensation for a savings account where I wasn't given the t&c's and lost out on a bonus by not being fully clued up on it). I think it might depend on what the t&c's say but the advisors should be better informed.

[LurkingHusband]

In fact, my recollection is that Gorgeous George rather promised that it wasn't going to prop up 2nd homeowners. BICBW ?

[facepalming]

Is the save to buy ISA's sole purpose not to help ftb to get on the ladder?

This is the one that the government contributes too isnt it?

If that's the case then I think yabu to expect help like that for a second property.

85 percent loan is a great deal for mortgage on a second property.

Of course they should have given you better advice if they misled you.

If you need 95% mortgage for a second property it might not be the best idea - remember when you convert to a buy to let mortgage most lenders want 30% + as deposit.

[Chebs]

Sorry, just reading through your responses - thank you so much.

To confirm, this was not a save to buy, it was a help to buy, which was only out for 6 months. The manager has confirmed that there are not enough details in the t&cs to rule out a 95% mortgage on a second property.

[katiekrafter]

I think compensation offer is generous since most people should have known that 95% mortgage on a second property is not available. I think you have been lucky to be offered 85% tbh on second property. That said, the advisers should also have thought about it at an early stage. Did you make it clear to the adviser who set it up that you were going to buy a second property? If you don't get joy from the bank then you could go to the ombudsman, but you might not get anything ...

[Chebs]

Also, this is not the scheme that the government contributes to. We wouldn't have been accepted for that as we already have a mortgage and that one is specifically for 1st time buyers. This was an ISA we were sold into and is run by our bank. We explained our position clearly in all interactions - at the initial appointment, calling for the mortgage appointment in branch and calling the call centre. At every stage we were confirmed that this was fine bar the actual application call where we were advised otherwise.

Unfortunately for us the house is now sold, and the manager is clear that he cannot offer us the 95% mortgage anyway.

[TheFlis12345]

I'm confused as to what financial product you actually had, the Help to Buy ISA only launched last December, not in 2014, and is still going, it didn't stop after 6 months. I'm also not aware of any of these ISA schemes being attached to a mortgage, they are normally completely separate.

[Chebs]

Yes, we made it abundantly clear to the advisor who set us up. The manager advised he is no longer with the bank.

Interestingly enough it was the manager I spoke to in organising the application appointment - and he recalled my whole story as well ... 2nd mortgage, ISA, 95% etc etc. I asked him why he didn't advise that this wasn't an option for us and he said on looking over the account t&cs it didn't clearly state that we weren't eligible for it.

[Chebs]

Theflis, this was an ISA my high street bank sold to us - help to buy is all over the paperwork and we have had it since July 2014.

[mummymummums]

Whilst it seems that whoever you spoke to didn't have enough knowledge, I can't see what you'd get compensation for? People lose their dream properties all the time for a variety of reasons but they don't get compensated in our country. And you haven't lost money as far as I can tell. You could report to FSA or regulatory body though as they can award compensation I think (I could be wrong!)

[AwakeCantSleep]

You have no right to a mortgage unfortunately. A lender can reject you for all sorts of reason, and impose any deposit restrictions they like really. Unless you have gone through the full mortgage application process the lender cannot normally say if they are going to accept you. Their T&C will say that subject to the lending criteria at the time you will be eligible for a 95% mortgage. You currently don't meet their lending criteria for a 95% LTV. I don't think there is anything you can do about it.

Have you spoken to an independent mortgage advisor?

[mum2Bomg]

Yep, complain properly, ask for a copy of their complaints procedure. Keep and eye on how long they take to come back to you - they have 8 weeks to issue a final response.

Once you have this, immediately pop it in the post to The Financial Ombudsman Service (The FOS). Make sure you explain any distress or inconvenience.

See what the regulator thinks. If you're happy, great. If not, follow their process to escalate.

Good luck! Do not take whatever you are first offered!!!

[YelloDraw]

YAB a bit silly to want compensation for loosing your dream property.

Bit strange you were miss sold the product since it is extremely clear it is FTB only.

You can probably get the difference in interest if you'd put the money elsewhere and £50 goodwill gesture

[TheFlis12345]

Theflis, this was an ISA my high street bank sold to us - help to buy is all over the paperwork and we have had it since July 2014.

They have definitely done something very weird /dodgy then as there was no ISA that should have been linked to Help to Buy at that time, and the Help to Buy mortgage scheme should never be linked to anything else in that way (I have done work relating to the scheme so know a lot about it). I'd be checking with the regulators as something seems amiss to me.

[ImperialBlether]

Yello, have you actually read what the OP says?

OP, was it Lloyds, by any chance?

[TheFlis12345]

The 95% Help To Buy mortgages aren't just for first time buyers, but do only allow you to own one property at a time.

[RoseDawson]

We had one of these through nationwide - a save to buy ISA where they guaranteed to offer you a 95% mortgage if you saved £50 a month. We ended up not using it anyway. It was very clearly for first time buyers only though, to help people on to the housing ladder for the first time, not to help people profit from a buy to let! If you need a 95% mortgage then you cannot afford a second property.

[ny20005]

What sort of compensation are you looking for ? You'll probably be offered a payment to cover the wrong information given to you at the time, however that product was never going to enable you to get a mortgage & buy your dream property so you will not be compensated for that. Banks are not there to haggle with you, if you don't accept compensation offer, they won't barter with you. You'll be issued final response & advised to go to fos

[ChaseAvenal]

To clarify on the help to buy thing, the op would've had an ISA through thier bank which promised to later allow them to get a 'help to buy' (95%) mortgage, this is different to the new help to buy ISA.