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I am looking for some advice if my complaint is valid against my mortgage advisor?
We feel we are in a good financial state in our life’s to expand our investments into property and a buy-to-let.
A property was brought to our attention in our village that required some minor modernisation works i.e new kitchen, bathroom, double glazing, and full redecoration.
Basically it is of sound structural condition.
Being new to the buy-to-let we went via an independent mortgage advisor we found via a search site.
The adviser is all very chatty on the phone and appear helpful.
We explained that the house was uninhabited, it required the above works to bring it up to a lettable state and we estimated the cost for the above works and time we would envisage to complete the works.
We submitted an offer to the estate agents based on our no chain and the works it requires, and the offer was accepted.
We signed the pre mortgage application and the mortgage surveyor went to the house about 1 week later.
To cut a long story short as I can, the surveyor deemed the house un-lettable in its current condition and before a mortgage could be released the works we planed to do (listed above ) would have to be completed.
We never envisaged letting in the current state or even suggested that we would.
Now we are unable to purchase the house as no mortgage no house. The sellers are not going to do the works and still sell and the pre modernised price, we are not going to do the works when the house is not ours. So purchase of house has been cancelled.
We feel very let down initially by the mortgage company / mortgage surveyor, but should maybe our complaint be directed toward the mortgage advisor for miss selling us a mortgage?
We had clearly described the house as requiring works to bring it up to a lettable standard, describing the works we planned and cost of renovation.
I find it hard to believe that the mortgage advisor has not had a similar situation before and hence should have been able to say to us words to the effect that a mortgage company will require a house to be in a lettable condition for a buy-to-let.
We are now £355 out of pocket which we which to pursue for refunding.
We have already written a letter of complaint to the mortgage company and they simply highlighted that fact that our mortgage advisor will have provided us with all the information?
The mortgage adviser is not qualified to do a survey or offer an opinion on the ability to get a mortgage on a property they have not seen. They would rely on what you tell them and make an opinion based on that.
In your own words, you say "that required some minor modernisation works i.e new kitchen, bathroom, double glazing, and full redecoration. Basically it is of sound structural condition."
Based on that there is no reason to think that there is anything that would prevent a lender from considering it.
The valuer, on the other hand, who is qualified to decide if the lender should give a mortgage on the property or not, has decided that the property is worse than you have said and it not in mortgageable condition at present.
Quote:
We are now £355 out of pocket which we which to pursue for refunding.
The valuer has probably done you a favour and saved you money as its clear what your opinion on the state of the property is different to theirs.
Of course, buy to lets are unregulated so you dont have the same consumer protections a residential mortgage would have and to be honest, the mortgage adviser would be able to defend this one very easily based on what you have said.
I am an Independent Financial Adviser.
Anything posted on this forum is for discussion purposes only. It should not be considered financial advice. Different people have different needs and what is right for one person may be different for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser who can advise you after finding out more about your situation.
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The valuer has probably done you a favour and saved you money as its clear what your opinion on the state of the property is different to theirs.
.
I would beg to differ on your above statment? The valuer has simpley listed the works we planned to do on the house, so in now way has the valuer found any hidden issues.
But I do agree with you that others will have more "paperwork" to justify their words and not alow use to get back £355.
And progressing further, discounting your above statment, yes £355 lost, but even if we had done the work as budgeted, there could have been a lot more to loose in the long run.
£355, I think chalk it down to one of lifes learnings, but I still belive that given all the info we provided some one might have said somothing.
My view of buy-to-let now is unless the place is fully lived in or as new you will not get a mortgage on buy-to-let.
Anyway, depost we had has now all been moved a a 2 year fixed bond with the AA at 4.35% (ISA's are all currently full for this tax year)
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My view of buy-to-let now is unless the place is fully lived in or as new you will not get a mortgage on buy-to-let.
Or have a large enough deposit. Mortgage buy to lets are a high risk transaction for both lender and borrower and lenders have tightened up on that front.
The yields are still historically poor and whilst buying a property in poor repair is a very good way to turn a profit, it does need more of your own capital now than you used to get in the easy credit days. Even then, there were many that lost money that way as well.
I am an Independent Financial Adviser.
Anything posted on this forum is for discussion purposes only. It should not be considered financial advice. Different people have different needs and what is right for one person may be different for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser who can advise you after finding out more about your situation.
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I can't see how you can make any financial decision on a property where it may be unsound and in need of repair. Perhaps the first port of call should have been to a surveyor who could attest to the deficiencies of the property in question and the likely remedies required.
If every interested party has to pay for a separate survey then the total survey costs are unlimited. I invite interested readers to suggest a way forward.
J_B.
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We where putting down a 30% deposit! With another 6% for the works required. How much more do they want?
30% is just about the minimum deposit for an investment property. So, whilst you may see it as a good deposit, the lender doesnt.
Quote:
The valuer has simpley listed the works we planned to do on the house, so in now way has the valuer found any hidden issues.
Whatever the valuer has told the lender, it was enough to stop the lender from issuing the mortgage. A simple refurbishment (redecoration and minor repairs) would not have the lender refusing to lend the money.
Not unless you were pushing the loan to valuation at the purchase price and the value of the repairs, as estimated by the valuer, were enough to drop the property in value to a level where your deposit and cost of repairs was insufficient.
I am an Independent Financial Adviser.
Anything posted on this forum is for discussion purposes only. It should not be considered financial advice. Different people have different needs and what is right for one person may be different for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser who can advise you after finding out more about your situation.
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Pls be nice to all MoneySavers. There's no such thing as a stupid question, and even if you disagree courtesy helps. Take care over copyright. Use excerpts and links rather than copying long text. This site asserts copyright on all comments posted on the board.
Pls be nice to all MoneySavers. There's no such thing as a stupid question, and even if you disagree courtesy helps.
Complaint against Mortgage advisor?
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