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.

It sounds like you can afford the stamp duty but not the mortgage, the stamp duty is fixed and will not change (well unless Rishi gives everyone another tax payer funded exemption again) time to renegotiate with your sellers I'm afraid

[quote SingtotheCrowd]@RedToothBrush HMRC stopped letting people put stamp duty on credit cards due to the high fees that HMRC incurred as a result.

There are a lot of posters on here looking down on the OP from their position as secure homeowners, I bet.

The 2018 change should not have come as a surprise to the OP, but that’s not to say that for some people who are good with credit, putting stamp duty on a credit card used to be a sensible decision.[/quote]
Its also very very risky. The fees may have been the primary consideration, but people putting themselves in situations where they take loans more than the value of their home was exceptionally risky for the entire sector...

...see Northern Rock and sub-prime lending in general.

Surely you can't take out a loan during a mortgage application?

Of course you can. It depends entirely on the specifics of the situation.

More than two credit applications in six months will lower your score. But not just two alone. And even if you make more than that, if your score his high, it won't be lowered enough to fall below the acceptable mortgage threshold for most lenders just by that.

Similarly the lending criteria for mortgages and loans differ between companies. So it's perfectly possible to take on a new loan and meet the mortgage criteria still for some banks - it all depends on the specific financial circumstances and credit history. And given what the OP has posted I think that might be their only possible way to proceed on this planned purchase.

However as I said, if I was the OP, I would reconsider. Stretching yourself financially to such a degree is risky and also very stressful. I'd rather buy a slightly smaller house and feel more secure, but that is personal preference.

@jimmyjammy001

It sounds like you can afford the stamp duty but not the mortgage, the stamp duty is fixed and will not change (well unless Rishi gives everyone another tax payer funded exemption again) time to renegotiate with your sellers I'm afraid

Based on the figures there's no reduction with the seller that the OP could realistically agree to fix this. Stamp duty is about cash payment, not the overall amount paid.

Not something I'd recommend financially @KyotoRose, but theoretically you could do a cash withdrawal on the credit card and pay that way. important to note cash withdrawals usually have a higher interest rate and no interest free period. Alternatively you might be able to get a personal loan for the rest.

@LunaAndHer3Stars

Not something I'd recommend financially *@KyotoRose*, but theoretically you could do a cash withdrawal on the credit card and pay that way. important to note cash withdrawals usually have a higher interest rate and no interest free period. Alternatively you might be able to get a personal loan for the rest.

Cash withdrawals on a credit card should never be used except in an emergency. With almost every credit card provider they attract an insane level of interest and the also lower your credit score (in a way that borrowing the same amount as purchases does not).

Your solicitors will need to receive the stamp duty in hand before completion as you have a lender and this is part of their responsibilities. We are going through this process right now.

If you didn’t have a lender and were buying a house with cash (which you aren’t) even then the HMRC SDLT website makes it amply clear that you cannot pay with a credit card.

Your mortgage advisor is not a tax advisor. You cannot sue them for giving you incorrect tax advice.

Have they given you incorrect tax advice at all? They said you could use your own finances - sure yes that’s true. Your savings. They have not advised you that you should or can borrow money to pay SDLT. Which is what your plan was.

You do not put SDLT on a credit card. If things are so impossible this is not the house for you. You don’t pluck a house out of thin air and think it’s YOURS when you cannot afford it

If they take out an £8000 loan when they are so stretched it'll impact their affordability.

If they try not to declare it and it's discovered they could end up in a terrible position, like the pp said, offer withdrawn between exchange and completion and liable for thousands of pounds, with nothing to show for it

Definitely don't do that OP.

Contact a broker and see if they can get a mortgage for you for more ££. I have used Charcol in the past.

If you've got till September can you not pay absolutely everything on a credit card and bank the money ? This would only work if they don't do another credit check - we bought a house (years ago) and booked a last minute holiday on a card, as part of our mortgage offer (affordability) they insisted the card was paid off.

@SingtotheCrowd the OP is a secure homeowner. She wants yo trade up to a bigger, better home she can't afford.

@KyotoRose

IAAL.

When a mortgage adviser gives you incorrect information, you may have a case for negligence. It’s possible that you could make out a case for negligence in this instance.

However - that doesn’t mean anything can be done which will get you your house, because if even if your mortgage adviser has been negligent, that isn’t what has caused you to lose out on the house. You’re losing out on the house because, fundamentally, you don’t have the funds to complete the purchase. The mortgage adviser may have given you incorrect advice about that, but they aren’t the reason you don’t have the funds.

What you might be entitled to is the recoup of any costs incurred specifically in reliance on that advice - so if you have instructed solicitors to proceed and incurred fees as a result when you wouldn’t have done so without the incorrect advice, that may be a recoverable loss. But any losses must flow from your mortgage advisers negligence to be recoverable.

You can’t insist that you be offered a mortgage - you would only ever be entitled to be restored to the position you would have been in had the negligence not occurred, and you would never have been in a position to buy this house. Therefore, nothing you do now regarding this incorrect advice will get you the house.

If you do have losses flowing from the incorrect advice you can try to recover these. Unless these are significant, however, it’s not going to be worth the cost of doing so.

Could you not draw out the money as cash from your credit card? Higher interest I know but would give you the funds for stamp duty.

If you stand to lose the house for a shortfall of 8k, you really can't afford it 🤷🏻‍♀️
That's loose change when you're talking about a house purchase. Sorry.

Is there anything you can sell? A car?

Did you manage to sort it all out ?