Advised mortgage application - lost fees and costs

Financewiz

Hi all - hoping to get some advice on where to go with this! A bit of a long post but its not too complex...

Six weeks ago we phoned a mortgage advisor looking for a buy-to-let product.

During initial conversation we mentioned some of the deposit would be gifted and were recommended a product from a building society that seemed to fit our need.

We went down the intermediary application route, completing all the usual forms including confirming that the deposit source was savings and gifted from parents....

We had a mortgage agreed in principle and paid over our application fee and valuation fee, in order to proceed.

This week we get an email asking where a large chunk of the deposit came from along with a comment from the advisor that they won't accept gifted deposits....

This being the case we can't proceed with the mortgage and have lost £700 in fees alone plus the costs of instructing a solicitor, and six weeks of messing our vendor around.

The deposit situation has been clear from day 1 to all parties, I doubt the building society will change its rules on this meaning we can't proceed.

Would welcome advice on who we approach first to try and recover some of the costs - it seems to be professional negligence on behalf of the advisor in the first instance recommending the product and continuing with the application, but the building society also accepted the application form when the deposit source was in black and white for them to see too.

Any thoughts?

GMS

What did the fact find and application form say regarding the deposit?

Are you sure this is the reason for the decline?

Are you first time landlords? First time buyers?

Which lender?

How much was the loan and what purchase price?

How much rent per month?

What income(s) do you have?

Financewiz

The application form request details of deposit source, nothing on it to indicate a gift would be a problem. The Key Facts also states nothing about deposit source either but it does clearly show the broker is recommending the product for our particular circumstance.

It is the reason why we're being refused, and since being told I've found a fair number of examples where Leeds will not accept gifted deposits for BTL. Once googled its very very clear on their Intermediaries lending advice for brokers....

We would be first time landlords, but already own our own house - the gross rental estimates obtained with proof easily pay 150% of the annual mortgages. 70% LTV.

Income is more than adequate as we were offered a second (non BTL) mortgage by HSBC onthe basis of our current incomes.

Cheers.

ACG

The application form wouldnt indicate anything - its not there as an aid, its there to take information.

I would reply to my broker saying why did you apply to them then knowing they wouldnt accept gifted deposits.

That way he has to reply, its a very direct question and any response will /should help you when asking for your money back.

Advisors mistake, advisor puts it right. If they come back and refuse then we can help but until then, there may not be an issue.

Senior_Paper_Monitor

Most advisers will provide you with a copy of the 'fact find' (the document they have used to collect your information and you should have been given to sign) as a matter of course and should certainly certainly do so on request.

This is the starting point in my opinion.

Financewiz

I had previously requested clarification of the situation and all I got was a blanket statement that they and many other lenders will not consider gifted deposits.... at least that has tee'd it up.

I don't think i received a copy of the fact find.

I'm presuming it probably becomes an Financial Ombudsman matter if a complaint made directly can't be resolved?

ACG

Sorry to repeat myself but i would be saying "Why did you recommend them then if they do not accept gifted deposits, i made it perfectly clear in our meeting my deposit is coming from a gift".

Financewiz

Hi, i've now done that, thank you.

Previously I'd asked him fairly directly to clarify the situation regarding them recommending a product for which I was now being told that gifted deposits might not be acceptable. The response to that was simply that they could only confirm that gifted deposits were not acceptable, and that may mortgage providers made the same stipulation.

Dave_Ham

Unless you can find evidence to support the fact you told the broker that this was a gifted deposit, it will be your word against theirs.

Subject to you absolutely telling them this fact, then this is a poor show..

Before you go hammer and tongs at the broker, have you actually found a solution now as some of these buy to let products can be arranged very quickly...?

kingstreet

Financewiz wrote: »

I'm presuming it probably becomes an Financial Ombudsman matter if a complaint made directly can't be resolved?

There is no FOS protection unless this was a regulated BTL application which would see at least 40% of the property occupied by relatives.

If the broker will not reimburse you your expenses, the next step is a court application.

Wh05apk

kingstreet wrote: »

If the broker will not reimburse you your expenses, the next step is a court application.

Or formal complaint as if through an estate agent or network, they wll want to look at this.