Misadvised by Santander

pmorrison_2

Hi, hoping someone will be able to give me some advice on the compensation that I may be due on this issue.

I currently own a flat that myself and my partner live in. We were looking at purchasing a house but keeping the flat and renting it out. My mortgage is with Santander and, before we viewed the house, I called them and explained that we currently own the flat and are looking to buy a house but would need to borrow against it in order to put up a deposit for the house. I was told that this would be fine but that I would not be able to find out how much I could take out until we had an offer accepted on a house as they would need to do an affordability check.

Fast forward 10 days and today we have had an offer accepted on the house in question. I phoned Santander hoping to progress this but as soon as I explained the situation to the new adviser he told me that it was not possible to borrow against a buy to let mortgage and that I had been told the wrong thing by the first adviser. Luckily all her notes on the system confirmed what I had been told.

I was put through to the manager and she basically backed up what the adviser had told me and I informed her that I wished to make a complaint as it has put us in the position whereby we are unable to easily get a deposit together for a house we have offered on.

About 10 minutes after I got off the phone to Santander I was called back and told that my complain had been logged and that they were willing to offer me £75 to close the matter which I turned down. I am assuming that if they are so willing to offer compensation then they have done something wrong!

My question is, what exactly are you entitled to when you are given incorrect advice? It is the first time I have come across it. Needless to say we are about 4 hours into the moving process and I am already massively stressed out!

Any advice (hopefully better than Santanders!) would be much appreciated.

tomtontom

Santander will offer you compensation to close the complaint down. That's not to say your complaint has a value, just that it's more cost effective to remedy the issue promptly.

Whilst you were given misinformation, you haven't actually lost anything, you were never guaranteed the additional borrowing. Their offer therefore seems generous, I would accept and focus on how else you can raise the funds you need.

Thrugelmir

pmorrison wrote: »

My question is, what exactly are you entitled to when you are given incorrect advice?

Strictly speaking nothing at all. People make mistakes. The staff member concerned will be retrained. Accept the £75 and move on. As there's no mileage in complaining further.

amnblog

You have a residential mortgage (regulated) and are asking the lender to treat it as a buy to let mortgage (unregulated) and increase lending.

This was never going to happen.

This is a simple case of miscommunication and I am not sure what else you expect the lender to do?

Your mistake was not consulting a broker. Brokers deal with this kind of situation daily.

pmorrison_2

Thanks for the replies, appreciate the comments.

@amnblog - having researched it further I can see that this is not possible, however as someone who isn't an expert I don't really see how I am meant to know this beforehand. I assumed that going to my existing lender and asking them was the most obvious thing to do. As tomtontom says, I haven't lost money from it but the advice given to me has now put me in this situation - surely I couldn't do anything but accept the advice I was given by the lady at Santander?

amnblog

What situation?

You need to get some independent advice from a broker and explore other avenues. Why it that a ' situation'.

pmorrison_2

amnblog - on a slightly different tangent, what should my next course of action be? I have a broker who I used previously who I could speak to and have spoken to a friend who is an estate agent who has a little knowledge who has suggested I need a 'Let to buy' mortgage - is this correct? The alternative is to get a new mortgage and try to get together the 10% deposit and hope that Santander give me permission to let my current property?

amnblog

Santander may give your permission to let but won't let you raise extra.

The usual approach is to remortgage the flat on a buy to let basis raising the extra you need, then getting a residential mortgage on the new house ( or moving the Santander mortgage across).

amnblog

'Let to buy' as a tag applied to a mortgage product is understood to mean different things by different people and is often not helpful.

It's a phrase I may use for the 'process' but not for mortgage selection as lenders do not have 'let to buy' products.

pmorrison_2

amnblog wrote: »

Santander may give your permission to let but won't let you raise extra.

The usual approach is to remortgage the flat on a buy to let basis raising the extra you need, then getting a residential mortgage on the new house ( or moving the Santander mortgage across).

Thanks, this makes sense and seems to be the best way to do it. May make things more difficult as the flat is (an will continue to be) in my sole name and the house will be a joint mortgage. However, I assume a broker will be a lot more used to the situation than I am!

amnblog

The sole flat/joint house issue is not a problem.

Even when porting lenders are generally ok with taking a product in a single name to a new property in joint names.