Sold the wrong mortgage, where do I stand?

turbostar_2

I moved into my shared ownership property over one year and my mortgage was arranged through a mortgage broker. For a number of months I repeatedly tried to apply for additional borrowing on my mortgage (small amount to clear overdraft). On separate occasions I was given many varying reasons from my lender as to why the application for additional borrowing could not proceed (most came down to the issue of shared ownership i.e. additional borrowing would only be considered for the purpose of increasing my percentage share in the property, being one reason). I have recently discussed this with a manager at the lenders head office who has now confirmed that my mortgage should never have been approved because the lender does not provide mortgages for shared ownership properties. I was advised to make a written complaint, which I have now done. My concern is that I know that there is no way I can switch to another lender (even a year ago before the 'credit crunch' 100% shared ownership mortgages were few and far between) but, I don't want to stay with my current lender because they don't have a product that accommodates my needs. Equally, I'm worried that the lender could terminate my mortgage and leave me high and dry and I'm left with nowhere to go - although, as far as I'm concerned, the lender made the mistake by approving this mortgage through the broker. Has anyone else ever been in a similar position? Been a first time buyer has been a lousy experience; plunged into debt and not even scraping by from month to month. If I could go back I would keep renting. This latest 'issue' looks like it will be the icing on what has been a bitter cake.

_Andy_

Which lender is it?

turbostar_2

hi, it's rbs.

~Beanie~

I don't really understand why you don't want to stay with your current lender? You were happy with your mortgage before they decided they wouldn't lend you any more money to repay your overdraft

sdooley

I don't understand. You had a 100% mortgage (on your portion of the equity). Of course they are not going to make you a further advance. No other lender would do this either (except Northern Rock Together, and I think that didn't apply to shared ownership).

If you are getting crushed by overdraft interest and charges, the way out is through a personal loan or perhaps a 0% credit card balance transfer (and better budgeting & not running up another overdraft). Adding short term debt to your mortgage is a very bad idea - you will end up paying a lot more in interest over the 25 year term.