Bad Morgage advice on a buy to let

MollySnuffy

Hi All

I'm new to this and looking into the mis-selling of Endowments and wondered if anyone could give me some advice on mortgages as well.

Almost 10 years ago my partner and I moved in together. I lived in a mortaged property I had previously lived in with my ex husband and he had his own flat with a mortgage.

When we decided to move to a house of our own (with no ghosts in the closet) we rented out the flat and proceeded to sell my house and look for another one.

We found just what we were looking for and approached my mortgage company who are a large organisation and I had used for some years and never had any complaints. We were then told we didn’t earn enough to keep both properties and would have to sell the flat.

Luckily my brother was looking for a flat to buy and rent out through his company and he was in the position to be able to complete quickly so we wouldn’t loose our dream home.

At no time did the mortgage company offer advice on buy to let mortgages or advise us that as they didn’t offer buy to let mortgages, or even suggest we could try other lenders who did, so not knowing much about this we sold the flat.

I feel really cross with them as the flat is now worth over 60k more than we sold it for and would have helped the children with a deposit for their own properties to get onto the ladder.

Can anyone tell me if its worth complaining, who would I complain to and how would I go about it?

Thank you

canny_yorkshireman_2

well you cannot expect to have grounds for complaint just because the flat you sold is now worth 60 k more it could have easily be worth 60k less and then you would be in a position of possibly losing the house you now have. Buy to let has become popular over the last 5 or so years well before you sold the flat and at that time most mortgage providers did not accommodate this type of mortgage so i guess unless you took independent advice on how to proceed then you have to put it down to experience
hth

homer_j_3

To be honest there is not a great deal you can do.

Your lender told you that there wasnt enough income to support 2 mortgages. The lender is not responsible for you not taking an alternate route if there was one available.

sorry

Ian_W

Hi Molly & welcome,
Not an expert so wait for one to come along but 2 points:

1. You haven't said how long ago this was, regulation of mortgages by the FSA has changed over time so it might affect the answer.
2. If by "mortgage company" you mean a lender that I don't think they can give advice on anything other than their current product range at the time. If you applied for a residential mortgage on one property covering the costs of both and your earnings were insufficient, they advised you correctly according to your application. It's no more a requirement for them to tell you that another lender does BTLs and they dont, than it is for Tesco to tell you that Asda's beans are 10p cheaper.
If the mortgage company was a broker then there may be different considerations.

Sorry it might not be what you want to hear but hope it helps.

MollySnuffy

Thank you for your help.

I must admit I didn't think there was much I could do about it but thought I'd ask anyway.

It still makes me cross that I didn't understand the in's an out's of mortgages at the time and the lender took advantage. Also 10 years ago there wasn't the same regulations in place.

Thank you

AndrewSmith

FSA regulations will not affect any potential complaint of not being advised of a possible Buy To Let option as Buy To Let is currently non-regulated, thus not covered by the remit of the FSA regulations.

I don't think there is a case for the lender to answer unless you specifically stated to them that you wished to let the second property out.

Andy

Ian_W

MollySnuffy wrote: It still makes me cross that I didn't understand the in's an out's of mortgages at the time and the lender took advantage.

Molly,
Then be cross at yourself, learn the lesson and move on. From what you've posted there is no evidence that the lender "took advantage", they dealt with the application you made properly and 10yrs ago BTL mortgages were pretty uncommon and not widely known. If you'd gone to a broker [no, I'm not one, nor plugging them] you might have got the right advice - but you didn't.
We all make mistakes, why, oh why, does it always these days have to be someone elses fault? Life is just too damned short, just move on.

dunstonh

I cant see anything wrong. Buy to Let mortgages were not that common (or at least mainstream) 10 years ago. Lending criteria was harder and we had just come off a property price crash.

At no time did the mortgage company offer advice on buy to let mortgages or advise us that as they didn’t offer buy to let mortgages, or even suggest we could try other lenders who did, so not knowing much about this we sold the flat.

They wouldnt offer advice on mortgages that they did not offer themselves. Whilst they did have the facility (or most did) to allow you to rent the property out and keep the existing mortgage (albeit with a rate hike), they decided it was not an affordable option.

I feel really cross with them as the flat is now worth over 60k more than we sold it for and would have helped the children with a deposit for their own properties to get onto the ladder.

Another way to look at it, as you mention endowments, is that had this country remained on a boom/bust economy and higher interest rates, endowments would all have continued paying surpluses and there wouldnt have been any shortfalls. However, we wouldnt have seen anywhere near the real value property price increases that have occured and monthly mortgage costs would be higher and more volatile. Things change, things move on. There is often little you can do to cover these changes apart from understand sometimes there are other benefits. Yes, you lost 60k but you could have lost more. The things that caused that 60k increase have benefited you on your main property and that mortgage is a lot cheaper because of it.