Mortgage Broker

Siouxsie32

Just wondered if anyone can give me a bit of advice. About a 9 months ago, I bought a property to develop. I went to a broker as my salary is very complicated and wasn't sure how much I'd be able to borrow. My intention was to keep this property for 7-8 months, develop it and sell it on, hopefully for a profit.

I spoke to the broker about 10 weeks before I took posession of the property and he told me about a fab new mortgage that would suit. My only non-negotiable with the mortgage was that I didn't want to be tied in as I was planning to sell it on as soon as it was finished. The (very) short version of what happened is that the super-duper mortgage company turned me down (because of the complicated salary which my broker knew about from day 1!) 7 days before I was due to take posession of the property. The property is in Scotland so there was no way I could pull out. The only thing I could do was to get a self certified mortgage with a much higher rate of interest.

My lawyer dealt with everything and the sale went through, despite my frazzled nerves! It wasn't until a few weeks later that I read the small print on the mortgage papers that I noticed there is a £5000 fee if I sell the flat within the first 4 years :eek:

Does anyone have any advice on what I can do? I guess the bottom line is that I should have noticed this before I signed. I was so stressed that I didn't notice but it wasn't pointed out to me by the broker. He 100% knew that I'd be selling the flat within a year. Are brokers obliged to tell their clients the T&Cs of the product they are selling? I'd call this an unsuitable product. I'm loathe to give up £5000 of the profit that I've worked so hard for. To add insult to injury, he charged a fee for his services!

Any advice would be really appreciated.

Thanks in advance

westie666

Does the Mortgage Broker work for / on behalf of a firm. If so is the firm a member of the Financial Services Authority, if they say that they are, you can check if they really are by going to

https://www.fsa.gov.uk/register

If it shows, then you can go to the FSA and report them for misselling you a product that does not suit your needs. You should also have been given a copy of the key facts information (KFI) and it should be stated on that what the mortgage company were offering you, BEFROE you sign

As you said, next time take an extra 5 mins to read the small print...

W666

herbiesjp

Did the broker give you and illustration? a Key Features Illustration?

MortgageMamma

this does not sound good. On first impression it sounds like you have spoken to an either uncaring or inexperienced broker, or both. Even if they gave you a copy of the key facts illustration showing the 5k redemption penalty, the broker still should have explained this to you before you agreed to take the mortgage out. You've been sold not advised I'm afraid.

If the broker was part of a company then you must follow their complaints procedure before going to the FSA, as you may be able to resolve your issue amicably. Make sure everything you say and do from this point onwards is recorded in writing. You can also ask to see your records held by the company by serving them with a notice under the data protection act.

Siouxsie32

Thanks guys,

I was given the Key Features Illistration for the original mortgage which was declined. The application for the second mortgage was such a whirlwind that I didn't care what was being applied for so didn't think to ask any questions (the broker knew my needs, right?) He works for Bradford and Bingley so definitely a member of FSA.

Lesson definitely learned about reading small print! I normally love the small print (sad, I know, but I just like to know everything) and the charge is something that would have jumped off the page at me if I'd seen it. I suppose at that stage I would have had to accept it anyway. I think I was lucky to get this mortgage in time for completion due to the timescales involved but if he'd told me earlier that my complicated salary could potentially be a problem (like a few other brokers did) then either I could have gone elsewhere or we could have applied for a self-certified mortgage earlier and maybe shopped around for one with no tie-in.

Thanks again for your advice. Next stop will be their office asking for a copy of the correspondence to get the ball rolling.

dunstonh

He works for Bradford and Bingley so definitely a member of FSA.

Not a member but authorised by the FSA. Key thing here is that he works for a salesforce, although whole of market salesforce. Always avoid advisors (of any type) that work for a salesforce. Its not an advice process, its a sales process. Its a league table and target driven environment and that is not how advice should be.

I think I was lucky to get this mortgage in time for completion due to the timescales involved but if he'd told me earlier that my complicated salary could potentially be a problem (like a few other brokers did) then either I could have gone elsewhere or we could have applied for a self-certified mortgage earlier and maybe shopped around for one with no tie-in.

If the other brokers told you then why did you use this one that didnt?

Zoetoes

dunstonh wrote:

Not a member but authorised by the FSA. Key thing here is that he works for a salesforce, although whole of market salesforce.

B&B aren't whole of market are they?? I thought they only dealt with a panel of 25 lenders without offering their own products??

Conrad

Sue

You stand a good chance of getting compensation.

The adviser sgould have highlighted the Early Repayment Charge in his 'Recommendation Letter' that he has to give you with the illustration.

He also had a duty of care to ensure your ORIGINAL stated needs (as recorded in the fact find and previous recommendation letter) were still met.

The key piece of FSA regulation that applies here is called 'TCF', which stands for 'Treating Customers Fairly, which he didnt do.

Had he abided by TCF in spirit and practice he would have given you a warning notice in writing that penalties now applied, given you were in a hurry and stressed he was doubly obliged to ensure you understood what you were agreeing to.

Go for it and dont take no for an answer.

Joe_Bloggs

@susie-sue
When you say 'sell the flat' do you mean sell it and repay the mortgage, paying early repayment charges on top of redemption fees. Can you port the mortgage to another property ? Is this mortgage without flexible features ?
J_B.

AndrewSmith

zoeleigh wrote:

B&B aren't whole of market are they?? I thought they only dealt with a panel of 25 lenders without offering their own products??

Under the current FSA guidelines, as long as they offer a range of mortgage products which reflect those available on the whole market place, they can call themselves whole of market.

The entire Connells and Sequence estate agency chain are the same, in fact they too are owned by a lender, the Skipton Building Society