Early repayment charge

brazil0507

In February 2010, I remortgaged my current property and took out a 2 year fixed rate deal with a 3% ERC attached. While arranging the mortgage over the phone I explained to the advisor that I was looking to move house within 12 months. The advisor ran the basic check of my salary, outgoings etc and confirmed that they would be able to provide me with a mortgage for the increased amount based on purchasing a more expensive house and using the portability aspect of the new 2 year deal on the new house. (Verbally confirmed, nothing in writing). This would then prevent any ERC being payable.

I have now found a property I would like to buy, contacted the provider to obtain the agreement in principle. However, with the same salary and expenses details they have now backtracked and have declined the additional mortgage borrowing.

I have shopped around and found numerous providers who will lend the value of mortgage required. Unfortunately, as expected my current provider is getting excited at the prospect of taking a chunky ERC from me.

Do I have a case here? The reason I took the fixed rate deal was on the words of the advisor that a higher value mortgage would be likely to be approved. Otherwise I'd have taken a variable rate mortgage with no penalties attached.

Any thoughts appreciated.

dunstonh

they have now backtracked and have declined the additional mortgage borrowing.

That isnt the case. Lending criteria is fluid and changes all the time. The ability to port mortgages to a new property has always been based on you meeting the lending criteria in place at the time. Not what it was in the past.

Do I have a case here?

If you used an adviser and sought regulated advice then you potentially have a case as the mortgage recommended should match your needs. Although, even with advice, if the closure letter confirms that portability was discussed and its not guaranteed, then that would protect them.

If you didnt use an adviser but used a telephone clerk on information only basis then no advice was given and its documented that you chose the deal. Therefore you cannot complain about advice as you didnt get any. Most of the telephone based clerks are not advisers.

Thrugelmir

dunstonh wrote: »

If you used an adviser and sought regulated advice then you potentially have a case as the mortgage recommended should match your needs. Although, even with advice, if the closure letter confirms that portability was discussed and its not guaranteed, then that would protect them.

Surely any good advisor will have a disclaimer when giving advice or recommendations for a mortgage. As they could not possibly foresee changes to lending terms outside those specfically stated in the contract.

dunstonh

Thrugelmir wrote: »

Surely any good advisor will have a disclaimer when giving advice or recommendations for a mortgage. As they could not possibly foresee changes to lending terms outside those specfically stated in the contract.

I would expect that there would be a risk warning in place saying portability is not guaranteed.

However, in this case, despite the OP using the term "adviser", its probable that it wasnt an adviser that was used but a clerk on a information only basis seeing as it was telephone based and a purchase of a new deal rather than a remortgage.