Mortgage Advisor gave me incorrect information...

confuzed.com_2

Can anyone advise where I stand on this (legally?)/what I might be entitled to ask (demand?) of my mortgage provider to be able to get this issue, and their mistake resolved for my benefit somehow:

I am on a 2-year tracker mortgage where I don't come out of contract/onto variable until March 2012.

My mortgage was approved in Jan 2010, and at that time I was earning £4k more than I am now. Due to relocation, I put my house on the market and accepted an offer of £4.5k more than I purchased it for.
In consideration of my now reduced salary, and the current economic climate, I wanted to find out how much my mortgage provider would be able to lend to me to enable me to work out if I could afford to buy another property and subsequently port my mortgage across (remaining on the property ladder and not having to incur the associated early contract termination fees (around £3k) was my preferred option).

The mortgage advisor I spoke to told me that as an existing customer, I would be able to port my current mortgage and current level of borrowing across to a new property and as long as I did not wish to borrow more money then my current salary would not even be looked at. He said my salary would not be considered as I would not be making a new application for borrowing and this was a benefit of porting my mortgage. He also advised, that if I purchased a property for less than I had bought for, I would have the option to be able to take the difference out as equity. As an example, if I had bought my house at £200k and the property I wished to buy/port to was only £150k, I would have £50k equity - either to leave in the property as equity, or to be able to take a proportion out to use/spend as I wished - e.g. on refurbishment, buying a new car, going on holiday, etc. He also advised I would have 'breathing' space of 3-months to port my mortgage and so I need not necessarily complete buying/selling on the same day.

Based on the information I had been told, it made sense to port my mortgage and so, given the sale of my house had already started to be processed, there was no time to lose and I threw myself into searching for a new home to port my mortgage to. I found a lovely house, made an offer on it and it was accepted - at £15k under the purchase price of my house, as far as I had been told, I was £15k in equity. Based on this, I had been planning on taking £3-4k out to decorate and buy furniture...

It was only as I was instructing my solicitor in the purchase of this house, that he told me that I would need to complete a mortgage application with my bank. The next day as I did this with my bank, I found out that what the other advisor had told me wasn't true (and the information about the equity was also of course not correct either and neither was having 3 months to port my mortgage, as it is in fact only 2 months). Of course, and as I had originally suspected, my income did need to be considered and on my income and the reduced level which banks will now lend, my mortgage provider declined my application - the amount they would lend to me was £25k short of what I needed to be able to purchase this house.

So here I am, having 'wasted' time, annual leave and money arranging and attending viewings and making an offer on a property which my bank now say I can't afford due to their giving me incorrect information in the first place. Their excuse for this was that the mortgage advisor was 'training' (and yet they let him speak to customers unsupervised - it really does scare me).

Suddenly what is their mistake is now my problem as I have fallen in love with the house, been excited about purchasing it and now it just makes me feel sick.

I feel in no way is it fair that if I now have to pull out of buying this house, I will have to look for another, all the while the clock ticking down as the sale of my house progresses yet further. I don't have much annual leave to be able to spend looking for another, lower priced house, and it hardly seems fair that due to their mistake, the vendors of the house I want to buy may lose money too if I withdraw my offer (e.g. the valuation fee, etc for the property they wish to buy)...

I feel as though they should honour all the information which they told me and which they presented to me as fact. I would never had proceeded in the way I had if I had know the real facts - most obviously I could have spent my time saving more money up to afford to buy a higher priced house and/or had been spending my time looking for lower priced houses which I would be able to get a mortgage for.

Do I have any grounds for compensation or anything from them? Ideally I would like to leave them as I just don't trust them and the stress and anxiety they have caused my family and I this week is unbelievable. Would it be possible for me to do this without incurring their early contract termination fee?

Fyi, my mortgage provider is C&G and since I've had my mortgage with them they have been nothing but an absolute nightmare - not processing my mortgage application for nearly two months after it was submitted when I first bought, debiting more money than they should from me and it taking nearly a year for them to give the money they shouldn't have taken from me in the first place refunded to me, and now this. If you're thinking of taking out a mortgage or any savings account with them - my advice would be to avoid them like the plague! They clearly have a flawed training programme in place for a start!

silvercar

Porting only means you can keep the same mortgage deal on your new property. Any new property is going to require a new application.

Clearly what you were told was scarily wrong, not just an error but complete baloney!

Do you have anything in writing?

First thing I would do is put in a formal complaint. If that is rejected you can then complain to the FOS. To be honest even a successful complaint is never going to give you your annual leave back, the most I would expect is a couple of hundred pounds and possibly a free valuation on your next property.

You have to consider whether you now really want tot move to a lower value property or would be happier staying put.

DVardysShadow

I think the smarter way to play this is to go back to the mortgage adviser and say "you told me <x, y, z> and so far I have lost <p, q, r> only to be told I am not eligible for the mortgage. Now, if you were not just spouting wild rubbish, you can sort me out a mortgage"

getmore4less

Was the adviser one of the lenders?

Do you have any of what was said in writing?
(Or maybe done over hte phone that was recorded)

Lucy_Lastic

A few years ago, C&G messed up my mortgage. I took them to the Financial Ombudsman, got it sorted out and was compensated for all the trouble I had with them. I've still got the mortgage with C&G and have had no problems since.
If C&G cannot sort this out to your satisfaction, contact the FOS.

confuzed.com_2

Thank you all for your comments and suggestions.

I do not have any of the information from the advsisor in writing - other than my own notes which I made in a notebook when I met with him. The advisor has since told his manager that the information he told me was incorrect as his understanding from his training was incorrect and so on this, both the advisor and his manager are not querying that what I was told was clearly wrong.

However, just C&G admitting they are in the wrong, and saying sorry, does not really help me practically in any way whatsoever - i.e. to be able to buy this house. I have to sell my house really as I no longer live in the area and don't really want the hassle of then having to move to a buy to let mortgage and managing tenants, etc, etc, although it may be something I will have to now consider...

I have called their head office to log a complaint as well as speaking to the branch manager is person. It's currently with their underwriters and so until I hear back on their decision there's not too much more I can do. I will also write to their Head Office so my complaint is also in writing should I need to follow this up with the Financial Obudsman.

Thank you all again

Richard_Webster

Quite basic for a mortgage advisor to know that all that gets ported is the rate - everything else is reconsidered - the property has to be valued, and you have to meet the lender's current income and loan to value criteria. If broker didn't tell you that, he is at fault - problem will be proving he didn't explain it properly and getting any worthwhile compensation.

theartfullodger

Most mortgage advisers/ "Independent Financial Advisers" (aye, right, independent of the commission they get eh??) are simply salesmen focusing purely on their monthly targets/commission... as i think most people realise..


Sorry if you found out the hard way...