Consequences of wrong offer letters?

jamesd

I'm currently on my fourth try at getting an offer letter with a rate that is not 0.5% lower than it should be. For me it's easy, I'll persevere until I get a correct offer letter and not exploit the repeated mistakes.

However, I am curious. What happens when borrower, lender and solicitor all don't notice a 0.5% too low rate? When, if ever, does this become binding on the lender? How are these things normally resolved if they aren't picked up prior to funds being disbursed?

With repeated failures like this, when does the lender become liable for redress, if ever, for actual financial losses incurred? What about if the vendor pulls out of the sale?

I see that the news story has the Ombudsman saying "The Ombudsman says: "A typical case where we would be likely to decide that the lender is entirely to blame is where the mortgage offer itself quoted an incorrect lower monthly repayment, the consumer paid that amount in good faith, believing it to be correct, and the consumer raised the matter with the lender as soon as the discrepancy became obvious. 'In cases like this, our usual approach is to tell the lender to write-off the capital shortfall that has built up, to the date the mistake was sorted out.'" So that appears to answer part of my curiosity at least: if I hadn't noticed the lender may have suffered up until the time I did.

towns

Hello,

Also having a similar dilemma. Mortgage company have been useless anyway, I am on about my sixth offer. There is a gifted deposit of £10,000 which they hadn't realised didn't need to be exchanged as the gift was from the current homeowner so could just be knocked off the sum. The old quote was valuation of the house 155k, purchase price is £111,000 and amount borrowed will be 101,000. This documents the 10k gift. However they made a song and dance about the 10k gift not needed to be handed over so have sent a new offer today saying 155k valuation, 101,000 purchase price 101,000 borrowing price.

Therefore essentially I am borrowing exactly the same amount but I guess by the way they have done their maths my old rate was 6.9% and the new rate they have offered is 3.09%! Obviously I'm not complaining but what would the consequences be? Guess it's just the difference in moving between a <70% deposit or an >70% deposit or is it just plain wrong? Can I leave it?! Lender/Broker/Solicitor don't seem to have noticed?

Thanks!

0james0

If the rate is on your mortgage offer, that is the rate you will pay once you move into your house.

The rate is computer generated based on the product applied to your mortgage, so I imagine that mistake would stay with you into your new house.

However, there is nothing to say that they will revert you onto the actual rate you applied for once completion happens, but my educated guess would be that everything from now is system dealt with and it will simply roll into your actual mortgage.

If you have changed loan amount (for the better), then the chances are either your broker or the lender have done you a favour and just applied a better product to your mortgage, but normally they all like to tell you all about it to get the applause!