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Original poster

Incorrect mortgage advice - set to lose dream house!!!

116 replies

KyotoRose · 01/06/2021 21:20

Our mortgage advisor gave us incorrect advice via emails, and now we're set to lose our dream house!!! Is there anything that can be done?

We have a mortgage in principle (90% mortgage), and were planning on using a credit card to pay for our stamp duty and legal fees (as we did a few years ago when we bought a property), but recently found out on the internet that since 2018 this hasn't been allowed. Our mortgage advisor hadn't advised us of this.

I asked the mortgage advisor via email if the stamp duty could be taken from the amount we're borrowing and he said it wouldn't be possible. He wrote (via his work email) that he could change our mortgage to a 95% mortgage, and this would mean that we would then have enough of our own funds for the deposit, stamp duty and legal fees. We were delighted.

However when we tried to book a mortgage appointment today to arrange our mortgage, the advisor we spoke to told us that we couldn't switch to a 95% mortgage, as the amount we would be allowed to borrow would be reduced by 30,000 GBP, meaning we would have not nearly enough money to put toward the house. I told her about the advice we had received, and forwarded her the email. She apparently showed this to her manager, and all that happened is we were offered a quick verbal apology, and told it was 'human error.'

We do not have funds to cover the cost of the stamp duty and legal fees, and cannot save these in time either (the vendors and us were aiming for a completion date in September). We do not have any family or friends who can gift or loan us the money either.

Are the emails we received form the mortgage advisor legally binding? If so, or if not, what can be done?

Surely we don't have to lose out on this house due to the incompetence of the mortgage advisor? In addition, we have already instructed Solicitors to carry out the conveyancing.

Please help. Thank you.

OP posts:
milinhas · 01/06/2021 21:25

Was it an independent mortgage broker or a representative of your lender?

It’s very upsetting but if the mortgage advisor hadn't mistakenly said that what would be different other than your hopes wouldn’t have been raised? It doesn’t sound like the finances are adding up for you unfortunately.

Original poster
KyotoRose · 01/06/2021 21:29

He's a representative of our lender.

He had told us we could use all of our finances to pay our deposit, stamp duty and legal fees. This has now turned out to be incorrect.

Is there anything that can be done from a legal point of view, seeing as though the advice was incorrect?

OP posts:
ItsSnowJokes · 01/06/2021 21:29

Can you honestly afford the house? It sounds like it is very tight for you financially on a 90% mortgage and having to use credit cards for stamp duty and legal fees. Can you pull out and carry on saving so you at least have the money for these up front? It's always very upsetting when you lose a house you really want but it may be for the best.

postnatalworries · 01/06/2021 21:30

It sounds awful, but really sounds like you just can't afford the house sadly. I'm a firm believer in these things always working out for the best though- there may well be a large house price crash soon (although this is only through things I've heard anecdotally) and it sounds like you'd go straight into negative equity if that was the case...

callmemaybee · 01/06/2021 21:32

I agree with the others - if you can’t afford it, there’s nothing more than you can do

callmemaybee · 01/06/2021 21:33

I mean even if you filed a complaint, you’d get a token amount of compensation. This obviously wouldn’t be the equivalent of £30k though, or whatever you need to afford the house

HmmmmmmInteresting · 01/06/2021 21:34

I don't know the legalities, OP, but I agree with PP that you can't afford the house. I also agree that when it comes to house buying everything happens for a reason. You will get your dream house.

Lavender201 · 01/06/2021 21:34

I don’t really see how the mortgage advisor has caused you to lose the house though. The fact you can’t afford it has caused you to lose the house.

He caused you to get your hopes up, and offer on the house when you weren’t in the financial position to. Which is very disappointing, but not worthy of legal action.

HmmmmmmInteresting · 01/06/2021 21:35

@Lavender201

I don’t really see how the mortgage advisor has caused you to lose the house though. The fact you can’t afford it has caused you to lose the house.

He caused you to get your hopes up, and offer on the house when you weren’t in the financial position to. Which is very disappointing, but not worthy of legal action.

This is true
DaenarysStormborn · 01/06/2021 21:38

The only potential thing would be to try and claim for the cost of instructing a solicitor, which I'm assuming you did after these conversations with the lender. I have no idea whether this would work though.

Original poster
KyotoRose · 01/06/2021 21:38

Thank you for all of the replies so far.

We can go back with the original 90% mortgage, and on this basis we can afford the deposit, and hopefully also the legal fees, but we won't be able to pay for the stamp duty. This is what we're so angry about, the fact that we stand to lose the house over around 8,000 GBP.

Yes, that's right, 8,000 GBP stamp duty. We are livid!

OP posts:
Original poster
KyotoRose · 01/06/2021 21:39

We can afford the house on a 90% mortgage, it's just the stamp duty we cannot afford.

OP posts:
NavigationCentral · 01/06/2021 21:39

I’m sorry but if needing to pay stamp duty and legal fees on credit card you can’t afford the house. You just can’t.

Original poster
KyotoRose · 01/06/2021 21:40

On a previous property, we also had a 90% mortgage and paid all the stamp duty and legal fees on a credit card.

OP posts:
HettySunshine · 01/06/2021 21:40

I don't think there is anything you can do. The mortgage advisor isn't going to give you £8k.

I'm sorry but it doesn't sound like you can afford the house.

Keep looking.

Original poster
KyotoRose · 01/06/2021 21:41

@DaenarysStormborn

Thank you for this advice. We'll look into it. A family member had advised we do similar.

OP posts:
Bluntness100 · 01/06/2021 21:42

Op it’s not legally binding as in they need to give you the mortgage. You have an apology, you might get some comp towards costs you jabs already encountered

But eight grand on credit cards was not a good idea. It seems you can’t afford the house, I’m sorry.

TakeYourFinalPosition · 01/06/2021 21:43

When did you initially ask the lender? During the stamp duty holiday?

Anyway, sadly it’s the same as above. Practically, it doesn’t matter if you are £8k short or £80k, you’re short and you can’t afford the house.

Don’t get me wrong, it’s unfortunate that they got your hopes up about using a credit card to pay those costs, but that was always a bad idea financially... and as you’ve said; it’s such a bad idea that it’s no longer allowed.

Have you paid for a survey or anything?

postnatalworries · 01/06/2021 21:43

OP it sounds pretty galling, but you really can't afford the house- which is why at the end of the day the bank won't lend you more. Yes it's 'only' £8000, but were really planning on buying a house with literally no spare cash? What if something happened to your boiler or car, or if you lost your job? What were you planning on doing if/when interest rates went up? I wouldn't want to be in a position that precarious no matter what the house was like, I'm sorry.

Soontobe60 · 01/06/2021 21:44

What you’re trying to do is to rob Peter to pay Paul. By hoping to pay the stamp duty and legal bills on a credit card, you’re basically demonstrating that you can’t afford to buy this house. I’m assuming that you’re selling one house and buying another, given that you said you’d done this before. When knowing what you can afford to pay, you needed to take into account how much equity you will have in the house you’re selling, plus any savings you’ve got. I’m guessing that the advisor assumed you’d have this cash too, until such point you informed him that you wanted to use a credit card.
The info about a 95% mortgage was correct, they will lend you 95% of an amount, but the amount isn’t enough to buy the house you want, so you need to either ask for a reduction in the price of the house, or withdraw and look for a cheaper house. I’d find it very doubtful that anything can be done from a legal POV as your initial discussions were for a mortgage in principle, not a definite offer.

HmmmmmmInteresting · 01/06/2021 21:44

When I say you can't afford the house I'm talking about the fact that you don't have the money for stamp duty and would have to borrow it. Tbh banks are so generous these days with their 4.5x salary that if they're saying no then you should count it as a lucky escape.

SingtotheCrowd · 01/06/2021 21:45

Didn’t you do your research while planning your house buying budget?

Original poster
KyotoRose · 01/06/2021 21:45

When we bought our previous property, we put 15,000 GBP on a credit card for the stamp duty and legal fees. No one told us we couldn't afford the property (as nearly everyone on here has said).

It was perfectly legal back then to put all of these costs on a credit card.

OP posts:
concernedlamaqueen · 01/06/2021 21:46

Can you find a free mortgage advisor to seek advice from? We had one and they were really good

SingtotheCrowd · 01/06/2021 21:46

@TakeYourFinalPosition

When did you initially ask the lender? During the stamp duty holiday?

Anyway, sadly it’s the same as above. Practically, it doesn’t matter if you are £8k short or £80k, you’re short and you can’t afford the house.

Don’t get me wrong, it’s unfortunate that they got your hopes up about using a credit card to pay those costs, but that was always a bad idea financially... and as you’ve said; it’s such a bad idea that it’s no longer allowed.

Have you paid for a survey or anything?

The reason it’s no longer allowed is because it was costing HMRC a fortune in credit card transaction fees, as they weren’t allowed to pass this cost on to the individual. Not because it’s “not a good ideas.”