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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:
Soontobe60 · 01/06/2021 21:46

@KyotoRose

We can afford the house on a 90% mortgage, it's just the stamp duty we cannot afford.
The stamp duty is part of the purchase of a property. You can’t separate the two.
Original poster
KyotoRose · 01/06/2021 21:47

@concernedlamaqueen

Thank you for this. We used one in the recent past, but plan to use another to see if they'll let us borrow more.

OP posts:
Lettuceforlunch · 01/06/2021 21:47

It really does sound like you couldn’t afford the house. It’s hard but you sounded so so stretched. Chances are, a year ago, when all the lenders really tightened their criteria as covid hit, you wouldn’t have got a mortgage. That said, if you honestly feel you have been misadvised, you could try and claim for the fees you’ve incurred to date as a PP said. Without knowing what exactly was said by the advisor, it really is hard to know who’s in the wrong. I don’t think it’s up to them to check you know you can’t pay stamp duty by credit card!

Bluntness100 · 01/06/2021 21:48

To be honest, other than any costs you encountered after he sent that email you’re no worse off op. It doesn’t matter if he told you no then or now, you always couldn’t afford it and were trying to borrow even more to pay for it.

So any costs encountered from him giving the erroneous advice I think arguably they should pay for. If you instructed the solicitor prior. Then i don’t think you’ve a case there. Unless you told them you couldn’t afford the legal fees and stamp duty so were going to use credit prior

coffeemonster23 · 01/06/2021 21:48

I'm Going against the grain here but if it was my dream home, I'd get an £8k bank loan as cheap as possible and use that to pay the stamp duty. You can then pay it off monthly like you would've done if it was part of your mortgage, or overpay when you can afford it.
If you get the timing right then it won't interfere with your mortgage application.

HmmmmmmInteresting · 01/06/2021 21:48

@KyotoRose

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.

I've never heard of borrowing for SDLT before. What percentage APR were you paying?
motogogo · 01/06/2021 21:48

The reason you can't put stamp duty on a credit card is if you are already mortgaging to 90% and cannot borrow more on your mortgage you don't meet the affordability criteria. £8k is a lot of money to finance on credit card

burnoutbabe · 01/06/2021 21:49

In theory you could sue for negligence as they owed you a duty of care and fell below that standard of a reasonably competent broker.

But your damages would be costs you suffered that they caused. So maybe any legal fees etc or searches done after their false advice.

But it would probably cost lots to pursue this. Unless you have legal expense cover on sone existing insurance policy?

HmmmmmmInteresting · 01/06/2021 21:49

@coffeemonster23

I'm Going against the grain here but if it was my dream home, I'd get an £8k bank loan as cheap as possible and use that to pay the stamp duty. You can then pay it off monthly like you would've done if it was part of your mortgage, or overpay when you can afford it. If you get the timing right then it won't interfere with your mortgage application.
Even if this was allowed the bank obviously won't allow this on their affordability checks. And even OP has said it's not allowed now
Original poster
KyotoRose · 01/06/2021 21:50

Thank you for all the comments, and some of the advice.

I'm leaving the thread now to do more research.

I've never used the legal section before, and was hoping I would have someone from a legal background provide a definitive answer.

Just feeling incredibly down and defeated right now, and the whole situation has made my depression hit rock bottom again.

OP posts:
BadMotherLover · 01/06/2021 21:50

Just to offer a different perspective. It seems to me as though you gave been mis-sold mortgage advice. I don't think this will help you though. It is very sad. I am sorry.

MadeForThis · 01/06/2021 21:52

You have been misadvised. But it won't make the bank give you the mortgage as an apology. Costs maybe if you have any.

nailsathome · 01/06/2021 21:53

You can transfer cash to your account from a credit card

postnatalworries · 01/06/2021 21:53

Ah OP I'm sorry. I lost out on a house a few months ago (having already paid thousands on survey and legal fees). At the time it was galling- now I know in my heart it happened for a reason- it does feel better over time.

Bluntness100 · 01/06/2021 21:53

I’m sorry op. There will be other houses, and to be fair you have had definitive advice. No it’s not legally binding but you may have a claim for comp for any expenses encountered after the erroneous advice.

However a mortgage is never final till it’s final and as you were going in to sort it, it was not at the absolute stage anyway.

HmmmmmmInteresting · 01/06/2021 21:56

@nailsathome

You can transfer cash to your account from a credit card
Yes but the solicitors will ask where the money came from. I believe they're obliged to these days.

Come on guys, the property market is ridiculous enough at the market. How would allowing this be different to the days of 100%+ mortgages?

Sorry OP that you're feeling low....it's devastating when you lose a house you've fallen in love with

cancancan · 01/06/2021 21:56

If it's just £8k and if you are quite far into the process I'd been inclined to reduce your offer on the house by £8k.... you never know they might take it rather then start all over agin with viewings etc!

Soontobe60 · 01/06/2021 21:56

@burnoutbabe

In theory you could sue for negligence as they owed you a duty of care and fell below that standard of a reasonably competent broker.

But your damages would be costs you suffered that they caused. So maybe any legal fees etc or searches done after their false advice.

But it would probably cost lots to pursue this. Unless you have legal expense cover on sone existing insurance policy?

Surely whether they were negligent or not would depend on at what point they told the advisor about using a credit card to pay fees. If they said they would have the money to pay them but not where the money was coming from until they booked their final appointment to sort the mortgage out, then they haven’t been negligent.
Bluntness100 · 01/06/2021 21:57

@nailsathome

You can transfer cash to your account from a credit card
Only with certain cards. Plus rhen she has an additional debt, which needs to be taken into account in the affordability checks, as you need to declare all debt.
confusedandshocked94 · 01/06/2021 21:58

Could you not balance transfer the £8000 you would have taken off your credit card, to your current account?

ilovethecold · 01/06/2021 21:59

This happened to me and my partner , we both got 3k overdrafts to pay it and then paid off our overdrafts 2 months later

justchecking1 · 01/06/2021 21:59

I agree with cancan

Go back and explain the situation to your seller and see if they will take a reduced offer

HmmmmmmInteresting · 01/06/2021 22:00

@cancancan

If it's just £8k and if you are quite far into the process I'd been inclined to reduce your offer on the house by £8k.... you never know they might take it rather then start all over agin with viewings etc!
It's stamp duty, though. If she's paying 8k stamp duty it's a pretty expensive house so a £8k price reduction will still leave a hefty SDLT bill
MyMabel · 01/06/2021 22:03

With a 90% mortgage, and £8k stamp duty.. and trying to pay the fee’s by borrowing more money ..
Doesn’t demonstrate you can’t afford the house. How will you afford the monthly payments? - a 90% mortgage on a house with an 8k stamp duty makes me think you’ve absolutely topped the tip of you budget; the bank can see this is the case and unfortunately there isn’t much you can do.

I would try and offer 8k less on the mortgage, maybe I’d you explain the situation the seller might be kind enough to reduce.

But as PP said, you can’t physically afford to but this house, you can magic up the 8k, it’s not going to grow in a tree over night, you simply cannot afford to buy it right now.

HasaDigaEebowai · 01/06/2021 22:06

Hang on, you said the adviser told you that you could use all of your finances to pay for the house and fees. He is correct, you can. A credit card is a loan (and typically a high interest one at that). It isn’t “your finances”. If you want an opinion from a lawyer my initial opinion based on what you’ve said is that he hasn’t said anything that is incorrect.

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