Mortgage - Unexpected Higher Lending Charge!!

sammccartney

We have been proceeding to get a mortgage with the Abbey, based on an Approval in Principle we received, however when we received the Mortgage Offer from them, there was a £4000 HLC on it!!! We are really concerned about this, and our mortgage advisor said that this charge doesn’t show up on his mortgage search software. We have logged a complaint with the software people who put together the AIP, however are not confident of anything being resolved.

We are so far down the line that we are scared that the vendor (who is desperate for a quick sale will go elsewhere), and we are due to meet our solicitor on Monday to sign the papers. Is there anything we can do to avoid this charge?

silvercar

Really your mortgage advisor should have told you about this. If this information doesn't show on his software then he is missing a key piece of data, how can he compare mortgages properly?

A bad workman blames his tools!

sammccartney

I understand this, and had we known this was the case, we (including the mortgage advisor) would not have proceeded.

Are you aware of any recourse we may have against then mortgage advisors company, the software company, etc.? Ultimately is there a body that shoudl regulate these mortgage software providers that we can take this up with?

silvercar

The advisor has chosen which software package to use and needs to take responsibility for this. If he knew the software didn't take account of HLCs, he should have investigated the HLC and included it in his calculations.

If he didn't know that the software didn't include HLCs, that is a matter between him and them.

Either way, the mortgage advisor is responsible to you. Whether it was the software companies fault for not including it or the advisor for not taking account of it, is not your concern. You could complain about the advisor and he would then make a complaint to the software company if he felt it was at fault.

The advisor will have professional indemnity insurance. I would suggest that your first complaint goes to the advisor's company and if that fails you complain to the Financial Ombudsman Service (FOS).

dunstonh

In the past, complaints have shown responsibility against the adviser and not the research company. You cannot blame the software. The software gives the adviser initial research information but we still need to verify it is correct. You have the contract with the adviser. It is his responsbility to you. If he wants to counter claim from the research provider then that is his choice. There could be a fault with Abbey as they supply the data to the research companies but its not your job to find that out.

I dont know about the mortgage advisers here but I would suspect Abbey are one of the providers that any experienced mortgage adviser would more or less know the terms off the top of their head. Its not as if they are some small local lender with limited use.

Leon_W

Silvercar and Dunstonh are quite correct.

The mortgage adviser is at fault here. It is up to him to verify and check with the lender that the information provided by any sourcing software or program is correct. It is quite common for sourcing system providers to be given duff information from lenders !

There is nothing you can do to avoid this charge at this point as it is not Abbeys fault that you have not been informed correctly.

To be quite honest. There are very few Abbey deals that DON'T have a HLC at LTVs above 90%, any adviser should know this, so I would concur with dunston that your adviser is a dullard.

MarkyMarkD

Are you sure that the HLC hasn't arisen for a different reason, for example down-valuation?

If you originally agreed to borrow £90k on a £100k property, you wouldn't have to pay an HLC. If the property was valued by Abbey at £99k, the loan would be >90% LTV and and HLC would arise.

In that case it wouldn't be an issue with the adviser's original advice, but the adviser's failure to understand why the HLC had suddenly appeared.

dunstonh

That is a good comment Mark and similar to a thread recently. The KFI may have been issued with a LTV that didnt have an HLC but if valuation didnt come up as high as expected, the HLC may apply.

Rick62

Sam, you mention an Agreement in Principle (AIP), you should also have received a Key Fact Illustration (KFI) for that particular product which should have shown the HLC (unless as suggested subsequently downvalued). I will usually get the KFI direct from the lender as every adviser knows that the sourcing systems frequently have errors.

Your advsor is at fault, not his softwarre, he should have known and should have checked, it sounds like he was sloppy and inexperienced. The process would be to claim against his company in accordance with the procedure shown in their Initial Disclosure Document (IDD).

Having said that I don't think your claim would be successful, for two reasons. First you are now aware of the charge and (theoretically) have the choice of not proceeding with this product. Second, if this product is still suitable for you they could argue that you have not sufferred a loss, a charge you are not aware of not being the same as a loss.

If the £4,000 is critical to you buying the property then you should delay exchanging until you can find a better mortgage with no HLC. If you are wanting to buy the property anyway, even with the charge, then you could still exchange next week, at the same time try and find a better mortgage while keeping the Abbey in reserve.

payless

can you post

Purchae price
valuation
mortgage amount requested