was I miss sold a one off prolicy to ensure sufficiant equity?

DJMORTON

way back in 1989 we bought a new house for £39000 at a time when prices were soaring and properties were in huge demand.

we saved a deposit and agreed a 90% mortgage with Halifax.

a month before completion we were told by the halifax that the property had been valued by them as only being worth £36500. they were therefore in effect offering us a mortgage that was no longer 90% of the value. and were told to pay a one off payment of nearly £500 for a policy to protect the halifax from their percieved risk given that they were effectively offering us a 95% mortgage based on their estimate of the value.

given the time scales we had no option but to make this payment. However even 25 years later i still feel cheated by this tactic that cost us a significant chunk of money that in hindsight there was never any risk to equity for the halifax. the house was a new build and subsequent releases on the same site were soon selling for over £4500.

i've searched this and other sites bt can't seem to find any similar cases. would this be worth pursuing?

Bantex_2

Was standard prctise. You could have walked away.

antrobus

DJMORTON wrote: »

....i've searched this and other sites bt can't seem to find any similar cases. would this be worth pursuing?

You paid a Mortgage Indemnity Guarantee (MIG). There would be hundreds of thousands of 'similar cases'. There is nothing to pursue.

dunstonh

However even 25 years later i still feel cheated by this tactic that cost us a significant chunk of money that in hindsight there was never any risk to equity for the halifax.

There was no tactic. You had a choice to save the money or to not save and pay the MIG.

the house was a new build and subsequent releases on the same site were soon selling for over £4500.

Irrelevant. New builds are typically over priced and the first thing a new build does when you move in is lose money. In a fast rising market, that can be masked but in a falling market, the effect is harder. As you cant tell what prices are going to do in advance, they can only base it on the valuation at that time.

There was talk of MIG coming back. It only went away for commercial reasons (boom market). Luckily it hasnt but there is actually nothing wrong with it and you cannot claim it back.

Insider101

I can only echo what previous posters have said. It was standard practice in those days to cover the bank against the higher risk arising from lending you a higher percentage of the property value.

Hindsight is a wonderful thing but it doesn't affect the argument one jot. In hindsight there was never any risk that I would crash my car last year but it doesn't mean I'm entitled to my insurance premiums back.

[Deleted User]

DJMORTON wrote: »

in hindsight there was never any risk to equity for the halifax.

None of us have the benefit of hindsight for every eventuality.

As others have said, you borrowed a very large proportion of the value of the house and the "penalty" for this was having to pay a Mortgage Indemnity Guarantee.

This was not a "tactic" by the Bank and you were not "cheated". If you didn't want to pay the MIG you should have refused it and saved for a more substantial deposit.

DJMORTON wrote: »

would this be worth pursuing?

You have no complaint and you have zero chance of ever having this money refunded.

roonaldo

You're right and you should not have been charged a MIG. You should have put down a bigger deposit or bought a different property or gone elsewhere for the mortgage. You need to take responsibility for this. You're not owed any money.

In hindsight I would have picked different lottery numbers last week.;)

magpiecottage

As I recall, a year or two later interest rates went up and house prices plummetted (remember Black Wednesday, anybody?)