Bad advice given re Re-Mortgage

Gillybxxx

I divorced my husband some 15 years ago and in the ensuing settlement I had to buy my ex husband's share of our house out at a cost of £20,000. I approached my bank, quite naively and said that I needed to borrow £20,000 in order to pay off my ex husband. This was turned down, although I'm not sure on which grounds as I was working full time at the time. I was then told about possibly re-mortgaging my house to raise the funds. I did say that I wouldn't be able to pay much more than I was currently paying for my mortgage and they advised that the best way to do that was to re-mortgage my property borrowing the extra £20,000 over a period of another 25 years. I had a repayment mortgage but feel that I have paid twice over for my house, (I currently have 10 years and 4 months left on my current mortgage which would have been paid off by now) all for the sake of £20,000.

[Deleted User]

If you couldn't afford much of an increase in your monthly payments, I'm not sure what other solution you could expect.

A long term loan always attracts a lot of interest.

If you want to reduce the total interest, overpay as much as you can.

PasturesNew

My layman's opinion is that you were told to do what was normal and usual to do.

Not being able to borrow £20k to hand over to somebody else would've been a stock answer.

Remortgaging would've been a stock answer.
To keep payments the same, extend the mortgage, would've been a stock answer.

[Deleted User]

When I worked in banking doing loans and credit it was an obvious pathway for someone to look at putting the borrowing on the mortgage if couldnt do it on personal loan. Or even if they could they spoke to the mortgage advisor to get all the information before making a decision.

Sounds like a fairly normal set of circumstances


What is your complaint? That they shouldn't have given you the money? You'll probably need to prove you were vulnerable and/or unable to make decisions at the time and the bank were aware of this to get anywhere. Otherwise, it was your choice to take the money and your choice to not ask any more questions.

ACG

An unsecured loan would have typically been done over 5-10 years max.
A mortgage could be done over 20-25 years.

You say you were working and could afford it but then you say you could not afford a lot more. As the mortgage was over a longer period and most likely at a lower rate it would be cheaper monthly - although likely more in the long run.

On the basis you were turned down for a loan but accepted for a mortgage, I would say it was probably affordability especially when you say budget was an issue.

Added to that, what did you expect your bank to do?
You did not pass the application process for a loan.
They offered you a Mortgage.

Where is the miss sale? They offered you a solution, if it was not what you wanted, you should have gone elsewhere, another bank, a broker, whatever.

Thrugelmir

Gillybxxx wrote: »

I had a repayment mortgage but feel that I have paid twice over for my house, (I currently have 10 years and 4 months left on my current mortgage which would have been paid off by now) all for the sake of £20,000.

You've always had the choice to overpay the mortgage and clear the debt faster in the 15 years that have followed.

davidmcn

Thrugelmir wrote: »

You've always had the choice to overpay the mortgage and clear the debt faster in the 15 years that have followed.

The OP's only other post (from five years ago) was about overpayments - don't know whether she followed any of the advice there.

SonOf

had a repayment mortgage but feel that I have paid twice over for my house,

Thats quite normal when you borrow over 25 years.

, (I currently have 10 years and 4 months left on my current mortgage which would have been paid off by now) all for the sake of £20,000.

You set the criteria to the lender
1 - that it shouldn't cost more
2- that you needed the extra money

Bad advice given re Re-Mortgage

No it wasnt. They did what you asked them to do.

enthusiasticsaver

I agree with others above that you cannot claim you received bad advice from the bank. If you needed to borrow £20k to buy out your ex this would by necessity have to be a remortgage if you could not afford a high monthly repayment. Taking it out over 25 years is why you have paid a lot of interest and is no different to any mortgage. The way to minimise interest payments and keep the term as short as possible is to overpay.

phillw

Gillybxxx wrote: »

I had a repayment mortgage but feel that I have paid twice over for my house,

Divorces often do that. Anyone who was nearly or just mortgage free when they divorced says exactly the same.

If you think taking a loan secured on your property for 25 years was bad advice, what do you think good advice would have been?

Gillybxxx wrote: »

I did say that I wouldn't be able to pay much more than I was currently paying for my mortgage

That is the same amount of money you could afford whether it was paying off a personal loan or a mortgage secured on your property. Which is probably why you were turned down on a shorter loan.