Mortgage broker applied for different mortgage product than the one they told us about

buyerthrowaway

Hi,

(Note, I will not name names in this thread, I'm only posting this for research purposes).

We got our mortgage offer approved by the bank today. However, the product is for a 2 year fixed rate. We told the broker we wanted a 5 year fixed rate. We have the mortgage illustration for product we applied for in writing (email). This mistake by either the broker or the bank results in us paying £70 more a month than anticipated.

Even with the higher interest rate, we wanted the duration to be 5 years, not 2.

What's the best way to proceed? We haven't signed a mortgage deed yet. Obviously I've contacted the broker, but would like some opinions.

ACG

Broker applies for the 5 year fix and then pays you £70 x 60 (months) = £4,200.
They might offer you £70 a month or they may offer you maybe £3,500 for a lump sum payment. 

I did this very thing for a customer a few years back but we did not pick it up this early. I did a 2 year deal instead of a 5 year deal. We did some sums and I think it worked out he was about £300 worse off. The commission for the new mortgage as £480, so I just gave him the £480. It was a genuine mistake, he has come back to me ever since, recommended his daughter and his partner to me... Mistakes happen, dont be too harsh on the broker. But hopefully they will put it right for you. For me on a personal level, its not the fact the mistake was made, we are only human. Its all about how the mistake is dealt with. 

K_S

buyerthrowaway said:

Hi,

(Note, I will not name names in this thread, I'm only posting this for research purposes).

We got our mortgage offer approved by the bank today. However, the product is for a 2 year fixed rate. We told the broker we wanted a 5 year fixed rate. We have the mortgage illustration for product we applied for in writing (email). This mistake by either the broker or the bank results in us paying £70 more a month than anticipated.

Even with the higher interest rate, we wanted the duration to be 5 years, not 2.

What's the best way to proceed? We haven't signed a mortgage deed yet. Obviously I've contacted the broker, but would like some opinions.

@buyerthrowaway Sorry to hear that. I'd just wait to see what the broker comes back with, looks like a mistake on the broker's part (or, if it's a large volume firm the administrator or case manager that keyed in the case). It could be a mistake on the lender's part as well, but that is much less likely.

As ACG said, if it's their mistake they should sort out a new 5 year fix product and if it's more expensive than the product you were supposed to apply for, put you back in the position you would have been financially.

With respect to rates, if your application went in after the mini-budget jump in early-October, you may well find that the rates (whole of market rates, not just the current lender you have an offer from) are pretty similar or perhaps even a touch lower compared to then. If your application went in prior to the mini-budget, then the current rates are likely to be noticeably higher.

buyerthrowaway

Thanks for the advice. I appreciate mistakes happen so I'm trying to get this sorted in a reasonable way, and our broker has been excellent so far, but at the same time I don't want to be paying £70 more per month than I thought.

ACG

You might end up paying the extra £70, but if the broker gives you £70 a month, its more of a paper exercise or if they give you a lump sum you have the money to pay the extra each month. 

kingstreet

How long has it taken to get from application to offer? Rates have been pretty stable for the past two or three weeks so it is possible the five year fix you really wanted is still available.

Nailer99

If anything 5-year fixes have come down. Why not apply for the other mortgage?