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

[KyotoRose]

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.

Actually asking the seller to reduce by 8k as you don’t have rhe stamp duty money is worth a shot. It might make them edgy though, but worth a try.

@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!

A £460k house would attract £8k sdlt A £452k house would attract £7,600 sdlt so this is not a solution

Perhaps instead of buying a £650,000+ Find a cheaper house that you can afford to get less mortgage on and still pay the fees without borrow money.

To afford at house over at over half a million I would expect you to be a bit better off financially to be honest.

A £460k house would attract £8k sdlt. A £452k house would attract £7,600 sdlt so this is not a solution

Well no. Becayse she has 460 available . So she would have 7600 available to pay rhe stamp duty.

Buying a 450k home but you don’t have £8k in savings? You can’t afford this house.

@Bluntness100

A £460k house would attract £8k sdlt. A £452k house would attract £7,600 sdlt so this is not a solution

Well no. Becayse she has 460 available . So she would have 7600 available to pay rhe stamp duty.

But I thought banks don't let you put sdlt on the mortgage?

Try another mortgage company like Handelsbanken. They might be able to make it work for you. Or get overdrafts on a couple of current accounts & then do a transfer after you’ve bought? Good luck trying to make it work.

Ask the ppl you are buying from to reduce the house?

We bought our first home during the 2009 crash. All of a sudden the bank made us pay 25% deposit instead of 10 and wouldn't let us use a credit card. We used every penny of savings and my mum took a loan for the rest of the deposit. We were broke for ages but got it paid off quickly.

Do you have anyone who can help if you are able to afford the repayments?

I'm going to ask the obvious here sorry- does the stamp duty actually apply to you given the freeze?

Please do NOT take the money from your credit card as cash as some are advising. Unless you have a special balance transfer credit card that would be treated as a cash advance and you will have a significant fee and be charged daily interest until the debt is repaid. Also we were told when buying that they can recheck the credit score anytime until the loan is drawn down and any further lending then would affect the affordability on the mortgage application.

@KyotoRose

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.

All the best op, if possible keep the thread update d as and when possible please

@honeygirlz

I'm going to ask the obvious here sorry- does the stamp duty actually apply to you given the freeze?

OP said they're aiming for a September completion date so actually the house might be more than £460k. In September stamp duty is on a tapered scale.

I could be wrong...been a long day and brain is frazzled.

But I agree with a PP who said try another mortgage company.

Ignore what I said about the credit card! I've just researched myself and this isn't a viable option! My apologies for commenting before researching.

@Jent13c

Please do NOT take the money from your credit card as cash as some are advising. Unless you have a special balance transfer credit card that would be treated as a cash advance and you will have a significant fee and be charged daily interest until the debt is repaid. Also we were told when buying that they can recheck the credit score anytime until the loan is drawn down and any further lending then would affect the affordability on the mortgage application.

Also if you apply for credit the company will do a credit check and see the hard check from the mortgage company and will know the OP is applying for credit elsewhere and may get turned down which will affect their credit rating.

Can you draw cash from the credit card into your bank account or take another bank loan to cover it?
Or have you got any family who could help?

If you take a loan in your name you stand to lose the mortgage anyway. The only thing you could do if family want to help is them take a loan and gift it you. If you choose to pay it back that is great but they would have to sign a letter saying it's a gift.

@JustOneMoreRun

Try another mortgage company like Handelsbanken. They might be able to make it work for you. Or get overdrafts on a couple of current accounts & then do a transfer after you’ve bought? Good luck trying to make it work.

Aren't they for high net worth individuals?

Don’t apply for another loan. The lender can credit check you between issuing the offer and releasing funds to your conveyancer. This happened to a client where I work and the lender saw that the borrowers had taken on more debt and withdrew the offer totally. The buyers had exchanged and were unable to complete which cost them thousands in lost deposit and compensation.

Just to back up what some others have said, the mortgage advice isn’t legally binding. Even a written offer can be withdrawn. (Especially if you take out debts / overdraft that were not initially disclosed on mortgage application - so based on that I wouldn’t advise you ‘take a loan or overdraft to pay the stamp duty’ as you may find your offer gets withdrawn).
However, if you can prove the advice was incorrect and that you incurred costs because of it, you may be able to get some of that back. Make a formal compliant. You might get initially rejected, but try again. The chances are they will pay you a ‘gesture of goodwill’ to cover the incurred costs (search’s etc..) as they won’t want the complaint to FCA as this will cost them more money. One point that might make a difference, was it just an email? Or did you have an official agreement in principle (where they do a credit search) before you went ahead and spent money on searches etc ...?
But I suppose the point it - the bad advice didn’t cost you your dream home, as in reality you could have never afforded it.
If you want a work around though, try and borrow the 8k from a friend, and then take a loan out the day after the mortgage completes in order to pay them back.

i wouldnt take out a loan. Your application will appear on the mortgage lenders final checks, and will reduce what you can borrow. But I second you going to another broker - maybe a free one like Trussle or L&C. We were declined a mortgage initially on affordability, but changed to a fee free broker, who then got us a mortgage. We’ve had our mortgage for two years and can meet the payments very comfortably. Don’t give up on your dream home until there’s nowhere else to turn, would be my advice. Good luck OP.

Oh and defo call a free free independent mortgage broker. They will quite possibly find you a lender you can get you the extra 8k.

@nailsathome

You can transfer cash to your account from a credit card

It costs an absolute fortune. Please don’t do this.

Do you have family you could borrow 8k from?

@honeygirlz

I'm going to ask the obvious here sorry- does the stamp duty actually apply to you given the freeze?

Stamp duty holiday ends on 30th June, so would only apply to the OP if able to complete before then.

After that there is a staggered return to normality, with the first £250k being stamp duty free.