Were we mis sold mortgage?

michaels

I may be missing something but it seems like the OP effectively requested 6k be added to the advance when the change in valuation resulted in the inital agreed percentage becoming too small for them to complete their plans.

This resulted in the loan moving into a diffeent LTV band and thus the interest rate increasing. Surely this change to the agreement should have required a KFI to be shown to the OP and agreed by them so they could decide whether to manage without the extra 6k?

Other posters are of course giving their expert opinon on the thread but no one seems to have addressed this issue - if it is not an issue then please explain why.

kingstreet

See posts #9 and #29.

Both advisor and lender should issue new KFI - lender as part of offer.

opinions4u

I've only ever been involved in a handful of self-build mortgages.

All of those involved have been financially savvy and had a stash of cash to fall back on just in case things went wrong.

I clearly remember calling out the need to read everything in the mortgage offer and T&Cs before committing to the project, albeit it these were pre-regulation.

I suspect you're MA is inexperienced in this type of lending. There may have been mistakes. There may be a modest compensation payment at the end of it.

But you really should have got much closer to the small print of your mortgage than you did. That was remarkably negligent on your part as a borrower.

michaels

kingstreet wrote: »

See posts #9 and #29.

Both advisor and lender should issue new KFI - lender as part of offer.

Thanks, so if borrower is not given KFI what is their loss? - Yes they are being charged the correct rate for the loan they have received but if they were not told that the additional advance would result in a higher rate (which might have resulted in them turning down the extra had they known), how should the 'loss' be quantified?

kingstreet

No idea how you would put a figure on that, TBH.

I'm sure the FOS has a method. It may be worth wading through the "case histories" on its website to see if there's anything similar.

Thrugelmir

Moneyidiot wrote: »

Also lender did not send revised offer to fin adv. surely they had obligation to do that .

My instinct is that the original mortgage offer would clearly set out the terms of the mortgage advance, including the final valuation of the property once constructed. As this is a build then there's no necessity to issue further offer letters. The lender is contractually bound under the terms and conditions of the original mortgage offer to supply the finance. Given that the final valuation is an unknown at the outset. Then no lender is going to give cast iron guarantees, only subject to's.

Moneyidiot

[QUOTE=opinions4u;62853328

But you really should have got much closer to the small print of your mortgage than you did. That was remarkably negligent on your part as a borrower.[/QUOTE]

Yes - we realise that now :-(

Moneyidiot

Thanks for all your views and advice - much appreciated

dunstonh

Do remember that we are only going by what you have told us. We have no access to paperwork or the things that are documented which carry the risk warnings etc. We are giving an opinion based on limited information. There could be gaping holes in what the adviser has done or it could be water tight.

The outcome will be whatever the outcome will be.