Can I claim any money back?

Ian_iD

Hello all, not really sure if this is money saving but if I get any back then I guess it is!?

I tried and failed to sell my apartment over 9 months but had already put a deposit down on a new build (silly I know, but everyone was telling me it would be easy to sell it) When it came to 6 weeks before I was about to get served notice I went to the mortgage broker at the agency selling my apartment and told him my situation. He came up with a solution whereby I remortgaged my apartment to release more money to put down on the new property, then rent my apartment out and keep both. It was delicately balanced around that fact that the valuation on the apartment would come back at £120,000 of which he was VERY confident that I would get. Infact on several occasions he said 100%, no problem at all etc etc

I really don't earn that much money and this was all worrying to me and to be honest when it comes to mortgages, figures etc I really am not very bright which is why I paid a broker. I found out after that I had a couple of mates with friends who were mortgage brokers/financial adivsors and I had a chat with them about what I was going to do and they ALL said there would be no way that the apartment would valued that highly. I went back to him and again he said there was no problem, 100% so I thought/hoped there was something he knew that they didn't.

Fast forward to the mortgage offer coming back and it was indeed valued low £112,000, £8000 lower! This pushed my interest rate right up and my monthly payments up over £120 more that he had told me. By this time there was someone moving into the apartment (he told me I could retro apply for permission to let after the remortgage had gone through) that had already signed for 6 months, the new build was about to be finished there was nothing else I could do. I am now stuck with a mortgage that I cannot handle even with rental income and if the interest rates go up it get even worse. I am losing sleep and am constantly worried and stressed about it. Is there anything I can do in terms of getting money back from the agency etc pls?

There are a load more things that happened such as he went on holiday the day the valuation came in and didn't tell me anything about it even though we had been speaking/emailing everyday up to it, so I had to suddenly deal with a different person that did not know much about me or my situation which made everything worse. Then when he did come back he went straight off again on maternity leave and I had to wait days to get any response from him about things that were going wrong with the other mortgage and on on, there is just too much to explain and I expect most people have already stopped reading by now!

The thing is that I still need him to help me 'retro' apply for permission to let on the apartment, but I'm not sure I trust him now!

Thanks very much for reading and thanks in advance for any help

dunstonh

One of the reasons you should not use estate agent mortgage advisers is that they are in bed with the agent. They want to sell properties.

What you describe sounds familiar to many people. Problem is that the mortgage broker is probably pretty well covered as they are not responsible for the valuation and are not responsible for giving your legal advice. He is guilty of over confidence in the valuation but when that valuation came back you still had to make the decision to proceed or not. You could have pulled out at that point.

I suggest you read the suitability report/mortgage closure letter and the key features illustration to see what risk warnings were present and how much the mortgage closure letter fits with reality. If you find holes in it then you may have scope to complain.

I wouldnt be confident in anything as you describe it and documentation is King with any complaint. What was said but cant be proven doesnt carry a lot of weight.

kingstreet

I'd be very careful if I were you. I have a suspicion you've applied for a residential mortgage on your flat, in full knowledge you intended to let it. Your adviser would be culpable, but you, as the signatory to the declaration on the application might find yourself in trouble too.

What possessed you to commit to a new property without first selling your own? What do you mean by "it came to 6 weeks before I was about to get served notice"?

What was the original mortgage amount on the valuation of £120,000? How did the down valuation result in your rate changing to the extent of £120pm difference?

If possible, could you set out what happened in a clear order, from the point you decided to reserve a new build onwards. Simple, clear statements please.

Was thinking and typing during dunston's post.

Ian_iD

Thanks for the replies, I was trying to keep it short thats why I perhaps didn't explain properly. I didn't want everyone to take one look at it and decide they couldn't be bothered to read it all.

In answer to your post Kingstreet:

Yes, I have applied for a residential mortgage, but he said we could apply to let after it had gone through and back date it. He told me this would be ok?? But I have a buy to let mortgage on the new house I am living in. As I have mentioned when it come to mortgages I really don't have much idea (which is why I got a broker) and he told me this was the best way of solving my situation.

I know in hindsight it was perhaps a foolish thing to do committing to the new property but without going into too much detail I have had a pretty rubbish few years and really wanted to get out of my apartment and into a new house and new begining and this was perfect new house would be perfect. At the time all my friends, work colleagues, estate agents (obviously) etc were telling me that it would be no problem selling my place in 9 months (It is quite a large, well presented city centre apartment) and perhaps in my frame of mind I was hearing what I wanted to hear so went forward with the whole thing. It's silly I know but telling myself that over and over really isn't helping the matter.

When I put the deposit down they told me once the new house was finished and signed off I would be served notice, once this was done I would have 10 working days to complete on the property. It was about 6 weeks until this was about to happen and I still had not sold so I was looking for any other options.

I originally bought the apartment for £100,000 about 7 years ago as a reposession and had a mortgage of £63,000. The remortgage was to go up to £90,000 to borrow £27,000 more which was a 75% loan to value if the valuation was £120,000. As it was only valued at £112,000 the loan to value was 80% which I guess is a higher risk and therefore pushing my rate up and my monthly payments.

Thanks for your help

Ian

Conrad

Ian_iD wrote: »

The thing is that I still need him to help me 'retro' apply for permission to let on the apartment, but I'm not sure I trust him now!

Thanks very much for reading and thanks in advance for any help

No you don't. People simply ask thier lender if it's ok to let. You will get a yes or no, simple. People often let houses without telling thier lender - I'm not condoning this, just pointing out what happens. No one ever goes to jail or anything! Lenders aren't stupid and recognise this goes on.

Retro applying is a lie I'm afraid - there is no such thing and it makes zero sence.

The answer is staring you in the face; If you are THAT owrried, sell the orignal property, pay the early repayment penalty and move on.

If you say you don't want to pay off the earl rep penalty, well then that also is your decision.

Can I be frank a mo? You need to stop asking others what to do - by all means get opinions, but the time has come where you need to clearly decide what is best for your own state of mind and act upon it.

You cant hide behind others - the valuation was always going to be lower - you must watch the news and no this was going to be the case?? You must be aware from news every day that mortgage lending has massivly dropped the last 3 years so OBVIOUSLY THIS MEANS PROPERTY PRICES FALL, especially newish appartments which are in over supply.

C'mon, pull yourself togther and make your own decisions - taking advice from others is not about you then blaming them for outcomes - advice is offered - it's up to you to act on it.

No offence, just think you need a wake up call so you can go forward with stregnth and conviction - all the best:)

GMS

SO you did not think that renting out a residential property and living in a Buy to Let property was wrong?

You state in the first post you do not earn that nuch money. Did you earn enough to get the residential mortgage?

You then took a Buy to Let to live in which could indicate bypassing affordability as it is based on rental.

You are in breach of 2 mortgages terms and conditions and on a very sticky wicket.

YOU signed for the mortgages in full knowledge of them being against the terms. You MAY have been badly led by people but this is no excuse. If you were told it would be ok to hold up the local bank with a shotgun would you do it?

Why did you not speak to your friends who were brokers? Surely this would have been the sensible option and they, as friends would have told you it was not going to happen.

Even if you have a genuine complaint here you have been complicit in the fraud, because that is what it is. You have clearly entered into the mortgages knowingly going against the terms and conditions.

beecher2

You are where you are, rather than trying to claim money back, take control and have a plan. Selling up your old property would seem to be the best bet - price it for a quick sale and move on.

Ian_iD

GMS wrote: »

SO you did not think that renting out a residential property and living in a Buy to Let property was wrong?

You state in the first post you do not earn that nuch money. Did you earn enough to get the residential mortgage?

You then took a Buy to Let to live in which could indicate bypassing affordability as it is based on rental.

You are in breach of 2 mortgages terms and conditions and on a very sticky wicket.

YOU signed for the mortgages in full knowledge of them being against the terms. You MAY have been badly led by people but this is no excuse. If you were told it would be ok to hold up the local bank with a shotgun would you do it?

Why did you not speak to your friends who were brokers? Surely this would have been the sensible option and they, as friends would have told you it was not going to happen.

Even if you have a genuine complaint here you have been complicit in the fraud, because that is what it is. You have clearly entered into the mortgages knowingly going against the terms and conditions.

Ok, I have major depression which in some people creates side effects that involve memory, concentration, learning & understanding and retaining information which is basically what I have and inccidentaly he knew that.

I was aware that a lot of this was a strange way of doing things but I really didn't understand it and had trouble getting to grips with it all, so I pretty much left it all to him and believed that I had paid a reputable mortgage broker who knew what they were doing and who kept telling me that everything was fine and it was all above board.

Yes I could afford the original quotes he sent me before the huge spike, not comfortably but I was prepared to struggle a bit to get out of that apartment.

I would hardly compare holding a bank up with a shot gun to signing mortgages I didn't properly understand, that is just stupid.

I came here hoping for some helpful advice on a matter I am genuinely worried and losing sleep over, instead I get people having a go at me. Nice.

beecher2

Ian_iD wrote: »

I came here hoping for some helpful advice on a matter I am genuinely worried and losing sleep over, instead I get people having a go at me. Nice.

You need to take control of this situation, so try to focus on the practical advice you are being given. I don't understand why you're losing sleep over it, when selling the apartment will surely solve your problems?

kingstreet

I've messed about with the figures you've given to see why the monthly payment difference was so high between 75% and 80% mortgages. I can only conclude the lender chosen for your 75% mortgage was ridiculously uncompetitive for the later valuation/LTV.

Looking at what you've said, you've no hope on the mortgage on the new property as it's been done as a BTL. Why weren't the two cases set up correctly with the existing property remortgage as a BTL and the new property mortgage as residential? It seems odd to do it the opposite way round, unless you were trying to get a bigger mortgage than your income justified?

The only issue you might have is the nature of the advice on the residential remortgage from the point of the valuation figure being known. What discussions went on between you and your adviser? Were you simply told you would get a new product and the payments would be higher?

In the circumstances you describe, I would personally re-source the case to ensure the new deal on offer was appropriate and still offered the best value for the revised circumstances. I'd produce a new sourcing report, a new KFI, new suitability letter and a factfind addendum which reflected what had happened and what I'd done to remedy the situation.

Did you get revised documentation confirming the adviser recommended the new product in the new circumstances?

Magpiecottage - if you read this, what do you think?

Ian_iD

beecher2 wrote: »

You are where you are, rather than trying to claim money back, take control and have a plan. Selling up your old property would seem to be the best bet - price it for a quick sale and move on.

Thanks, I now have quite big redemption fees so would end up losing quite a lot if I sold but maybe this is the answer.

Just wanted to see if anyone that knew more about theses things could offer any advice.