was it bad mortgage advice?

sicon75

I took out a mortgage to buy a house Oct 07 with, my then, partner. The house cost £115k and we took out an extra £8k(total borrowed £123k, we had no savings for a deposit) .

At the time my partner and i had earned about £30k for the previous 12 months combined, though, we lived apart (both rented) and my partner was in part time employment and claiming working tax credit (about £300-£400pm) . Once we moved in together the WTC would cease to be an income so our annual income would only be £25k-£26k per annum.

Was it bad advise from our mortgage broker to sell us a mortgage that was, once we moved in together, 5 times our income?

thanks

opinions4u

Was it a bad decision to ask to borrow so much?

Radiantsoul

sicon75 wrote: »

Was it bad advise from our mortgage broker to sell us a mortgage that was, once we moved in together, 5 times our income?

thanks

Presumably you were aware of the costs? As adults presumably you were able to make your own decisions.

hcb42

No, it wasnt bad advice, it was the norm at the time for many people apparently.

Thrugelmir

Was the additional money borrowed to clear debt you already had?

powerwin

It looks like you were given a mortgage in the boom when affordability criteria were being stretched, before the credit crunch hit.

How would you define "bad advice"?

Rgds

DannyboyMidlands

Since you presumably wanted to borrow the value of the house plus another 8 grand, the broker seems to have done a good job. Like many others, you were gambling on rising prices and now seem to be looking for somebody to blame.

dunstonh

Was it bad advise from our mortgage broker to sell us a mortgage that was, once we moved in together, 5 times our income?

5 times income is at the higher end but certainly not bad for many people.

However, had the mortgage adviser told you that you shouldnt have borrowed would you have listened or would have you walked down the road to the next broker or lender who would lend to you?

As an adult, you know your finances better than anyone else. If you tell a broker that its affordable and you have read all the risk warnings and still think its ok to proceed then its your own fault if you balls it up.

If you are mentally unable to understand what you were doing then it would be bad advice possibly. Do you have a low IQ or mental deficiency as complaints would consider that?

hcb42

funnily enough, I put my details into a Nationwide broker link that someone posted earlier. It said we could borrow very near five times our earnings, even today.

I wouldn't of course, we wouldnt be able to run our cars, buy food and have a life..

JimmyTheWig

Depends what happened at the time.

Scenario 1...
OP: Hello, we'd like to buy a house at some point. Would it be wise to save for a deposit first?
Broker: No, don't bother with a deposit. Borrow an extra £8k and treat yourself, you deserve it.
OP: But that's 5 times our income! We can't afford that.
Broker: Don't worry, you'll be fine. House prices are guaranteed to go up, you'd be missing the boat if you didn't do it now. Sign here.

Scenario 2...
OP: Hello, we'd like a mortgage and an extra £8k.
Broker: That should be possible. This is what it would cost you.
OP: We could afford that.

I would say that in scenario 1 you were mis-sold. In scenario 2 you weren't.

ViolaLass

I don't see how it would be mis-selling in scenario 1 - the facts are all there and unless the broker strapped you to a chair and refused to release you until you signed...