Can my mortgage provider do this?

StanVanDamn

I own a flat on shared equity with a mortgage from the Halifax.

Decided to buy a house with my partner and rent the flat out.

Went to the Halifax directly and asked them to provide mortgage on new house and I planned to rent the flat out. So both mortgages with the Halifax

I was advised this was no problem and everything went smoothly - Tennant has lived there for 2 months in the flat now.

I sent Halifax a letter asking to change the address on my flat mortgage to my new address and have now had a letter explaining they are going to switch me onto a higher interest rate mortgage.

I am pretty annoyed at this as no point I was told I had to switch my original mortgage to buy to let - I was upfront with them during the whole process.

So my question - do I have a good case to speak with the FSA regarding this> Or will I be stuck and forced to move over onto Buy To Let.

Thanks for your information.

Richard

nick_

edit: the first part i wrote was full of inaccuracies....

i would add however that you would need to go through the companies internal complaints procedure first. if then you are not satisified you are within your rights to go to the Financial Services Ombudsman.

betmunch

If you have taken a non-advised sale then you are expected to know the consiquences of your actions, in this case the need to change to a BTL product on your old mortgage.

Check your paperwork, find the Initial Disclosure Document, or Mortgage Offer letter, and it should tell you it Halifax have assessed your needs, or if you have made your own choice.

I suspect you have been done over by a Bank Salesman and will have no comeback.

Let us know what the paperwork says

StanVanDamn

When you say paper work do you mean the mortgage offer for my house?

I have just checked this and no mention of my flat has been made on it - then again why would it?

betmunch

It wont mention the flat. It will mention the service level you have recieved.

Yes, its on the offer letter, and the KFI, and the Initial Disclosure Document

Should be section 2 in the offer letter.

You have either had the product recommended to you which means Halifax have advised you to take it and therefore have to take into account everything you tell them.

Or they havent recommended the product, which means a non-advised service and you are therefore liable for the consiquences of your actions.

So what box have you got ticked?

Dave_Ham

I think this could be a hornets nest, have you got agreement from the other party in the shared equity to rent out the property? There may be some smallprint that you have to pay them extra or you are not allowed..

The fact they are both with the same bank and the Lloyds Group are cracking down on consent to let's is an issue for you. Did you obtain consent to let for the shared equity?

StanVanDamn

Thanks for the feedback both.

BETMUCH - In section 2 of the offer letter the first box is ticked -

We have recommended, having assessed your needs, that you take this mortgage

Thats good news for me I take it then?

DAVE - The permission for shared equity is not an issue. Both homes were bought from Barratt homes and I had permission from on them - on the basis I already bought a property from them. They were also aware that my flat was bought on shared equity.

Dave_Ham

It is encouraging news, although Betmunch may know something I do not; the advice is borne out of the decision to purchase the new property.

I do not know where you stand in terms of the fact you had an existing Halifax mortgage.

If they keyed you are selling this, they could say you told them this. If they keyed that it was let out and therefore allowed the new mortgage to be affordable, I do not think it would have been subject to many checks..

Be interested how this pans out for you..

betmunch

think so then, I wasnt expecting that.

If they have assessed your needs they have a responsibility to make sure you know what is going to happen. For me this would include telling you about a rate increase on your previous mortgage as you told them your intentions.

If you had known that the rate was going to go up would you have proceeded with the new mortgage application?

The advisor should have known the old mortgage would need to be changed, yet he assessed your needs and proceeded with recommending you take a new mortgage without mentioning the increased cost to you.

I feel there is a definate complaint here, whether or not it will result in anything for you is another matter all together. I also feel that its key that both mortgages are with halifax as the advisor should have know their own criteria, but couldnt be responsible if you where with a different lender and they had then put the rate up. This is key in my opinion.

If it were me I would complain, and also ask that you be put back in the financial position that you were advised you would be in when you saw the advisor, ie no change to your existing mortgage.

For me, its an error born out of negligence.

Good Luck, I think you are going to need it!

Dave_Ham

betmunch wrote: »

think so then, I wasnt expecting that.

If they have assessed your needs they have a responsibility to make sure you know what is going to happen. For me this would include telling you about a rate increase on your previous mortgage as you told them your intentions.

If you had known that the rate was going to go up would you have proceeded with the new mortgage application?

The advisor should have known the old mortgage would need to be changed, yet he assessed your needs and proceeded with recommending you take a new mortgage without mentioning the increased cost to you.

I feel there is a definate complaint here, whether or not it will result in anything for you is another matter all together. I also feel that its key that both mortgages are with halifax as the advisor should have know their own criteria, but couldnt be responsible if you where with a different lender and they had then put the rate up. This is key in my opinion.

If it were me I would complain, and also ask that you be put back in the financial position that you were advised you would be in when you saw the advisor, ie no change to your existing mortgage.

For me, its an error born out of negligence.

Good Luck, I think you are going to need it!

I am not quite as positive, but will be interested how you get on and wish you well...

betmunch

Dave_Ham wrote: »

I am not quite as positive, but will be interested how you get on and wish you well...

I'm positive its a valid complaint.

I'm not so positive that the OP will get much more than a letter saying tough!