Mortgage approval in principle 3.6% but final bank offer was 4.59% - Adviser to blame

Munio

Hi All,

Last year I bought a house as a first time buyer, hence I decided to get help from mortgage adviser. I got mortgage approval in principle at 3.6% and I have signed all the paper to go for it. 3 months later! I got an offer from bank, but it was different to what I have agreed to - 4.59% . Due to the fact that the previous mortgage product was no longer in banks offer I decided to sign it (we were expecting our first baby hence the rush).
Now I am paying nearly £2k more per annum then if I would get 3.6% mortgage. Everything is pointing towards poor service of the mortgage adviser, as he did not provided my application to bank for nearly 3 months.
Do I have a case here, and should I look for a compensation?

Regards,
Mike

Debtslayer

Munio wrote: »

Hi All,

Last year I bought a house as a first time buyer, hence I decided to get help from mortgage adviser. I got mortgage approval in principle at 3.6% and I have signed all the paper to go for it. 3 months later! I got an offer from bank, but it was different to what I have agreed to - 4.59% . Due to the fact that the previous mortgage product was no longer in banks offer I decided to sign it (we were expecting our first baby hence the rush).
Now I am paying nearly £2k more per annum then if I would get 3.6% mortgage. Everything is pointing towards poor service of the mortgage adviser, as he did not provided my application to bank for nearly 3 months.
Do I have a case here, and should I look for a compensation?

Regards,
Mike

Really?
I'm sure advisor would have gone through new rate with you and it would have been your decision to sign! If you weren't happy with new rate then you should have said and your advisor would have looked elsewhere at the time.
Was if a fixed rate? How long is remaining on fixed rate?
Consider overpaying if possible and then remortgaging when you are able to and be more careful checking what you're signing up to this time!

Munio

@Debtslayer

When I finally received formal offer from bank I did noticed that the product code and terms a different to what I have agreed with adviser. I went back to their office and found that the my adviser was replaced with a new one (it was suggested he got sacked). I did explained my concerns, but without any other product on the market to be close to 3.6% I have realised that at this point I am not going to get anything better (keep in mid that me and wife was expecting our first baby and did want to move to a house before due date).
It is a 5yrs fixed rate. Can over pay up to 10% per annum but that is not the point, as for the fixed term I will be loosing around £2k compared to the first deal.
I cannot find any info regarding the mortgage advisor responsibilities in case as mine.

mrginge

Compo time!

The answer to your questions are -
No.
And
No.

Munio

Compo time!

The answer to your questions are -
No.
And
No.

Any explanations?

ACG

What was the reason from being told you can rate of 3.6% and then waiting 3 motnhs before applying? That does not add up, vendors and estate agents would be pulling the plug if you waited that long without a vald reason.

I also find it hard to believe that there were no other products between 3.6% and 4.59% when the reality is mroe often than not that there are a bunch of lenders who all offer very similar rates depending on the market they are after.

Did the property get down valued, which meant you had to go on a different product?

I suspect there is a lot more to this than you are either letting on or are aware of.

dunstonh

I got mortgage approval in principle at 3.6% and I have signed all the paper to go for it. 3 months later! I got an offer from bank, but it was different to what I have agreed to - 4.59%

Deals get pulled and unless the money is advanced by a certain date, you may find you can no longer have that deal and have to pick from a new one.

Now I am paying nearly £2k more per annum then if I would get 3.6% mortgage. Everything is pointing towards poor service of the mortgage adviser, as he did not provided my application to bank for nearly 3 months.

So, you are saying that the application sat on the desk of the broker for 3 months without being submitted? I find that highly unlikely. There is too much chasing done by estate agents and yourself to be honest.

Were the things that needed to be obtained from you that were slow to arrive? That would hold up an application.

Or are you mixing up the time it took to get an offer (you say 3 months) with the submitting of an application (you also say 3 months)? An application to offer being done at the same time is impossible. Where is the gap between the two?

When the new deal came through at 4.59%, did you speak to the broker and ask them if that was the best deal currently available or did you just accept the default option selected by the lender?

kingstreet

An agreement in principle does not secure a rate. This requires a full mortgage application and sometimes payment of any fees.

At what loan to value was your agreement in principle made?

At what loan to value was your final application?

Munio

@ACG,

Perhaps you right about me not been aware of something, but I know that the seller nearly pulled the plug out.
The whole process was great until I have agreed for the approval in principle terms. Since then the broker gone quite (part of national broker network company). I have a copy of my correspondence which I have provided to the vendors estate agency to prove that I did my best to close the deal.
As I was FTB I was not sure is this a normal situation, but the sellers estate agency have confirmed that the was an issue with mortgage adviser. As I said eventually he got sacked. I do not know why I was offered a different product, but I was able to check the status of the mortgage application, and hence I know that once I was submitted (yes 3 months later) it was approved within a week.

I can only say that if you work full time on night shift, and twice a week you spend whole day at university which is 1 hour driving away (yes u do not spleep for over 40hrs) , got pregnant wife and sorting a mortgage, than you really want something off you head. That was me 1,5 hrs ago.

@dunstonh

My fault. I got mortgage approved in principle in last wk of March, I gave my go ahead and nothing happened for the next 3 months. I got approval from bank mid July. I went with it to broker, and after discussion during which we could not find any other product to be close to 3.6% I decided to sign it. That was in 2014.


@kingstreet

LTV 85% at both cases.

dunstonh

LTV 85% at both cases.

A lot of deals price change if you go above 85%. So, whilst you may give a property value and borrowing figure at application that is 85% and qualifies you for a deal, when the actual valuation is done, the valuation may be lower and that pushes you above 85% and into a different rate.

What the loan to value after valuation. i.e. how much were you borrowing? How much was the property valued at by the valuer (not the price you agreed to buy it at)

Munio

A lot of deals price change if you go above 85%. So, whilst you may give a property value and borrowing figure at application that is 85% and qualifies you for a deal, when the actual valuation is done, the valuation may be lower and that pushes you above 85% and into a different rate.

What the loan to value after valuation. i.e. how much were you borrowing? How much was the property valued at by the valuer (not the price you agreed to buy it at)

It was same on approval in principle and on formal mortgage from bank (as I call it).
House value £130k = 19.5 as a deposit and borrowed 110.5 = 85% LTV
Valuation was 130K