Mortgage company gave incorrect advice

sunflowerlady

Long story short. 

We were told by our mortgage company that we could port our mortgage to our new property (part commercial/part residential) as long as the title of the property was split. 

Splitting titles happens on completion so on their advice we paid our mortgage off in full, paid for the new property with all of our equity. Fast forward to the original mortgage being ported and they decided they won’t lend to us after all because it’s not their policy to lend on part commercial/part residential properties. 

We open a complaint and are left with no mortgage but also no money to renovate the 65 year old property and open the business. And also find out that mortgaging these properties is an expensive minefield!!

Mortgage company admit their failings, said the could have and should have told us at the beginning that we couldn’t port mortgage with them. They offer to pay the splitting of title costs and £500 as an apology. 

We are way past £500 in terms of what it has cost us financially and personally. This was 5 months ago and we’ve still not got a mortgage but are looking at about 3% increase on the rate and having to extend our term by 9 years to make it affordable. 

We would never have moved if we had known all this. 

Are they being fair offering £500 as an apology? 

Welcome peoples thoughts. 

Thank you. 

Hoenir

Who in the mortgage company ?

Was the conversation verbal or did you make a request in writing ?

Had you asked they would have also told you that porting isn't generally permissable to a property you already own. The title needed to be split prior to purchase. To effect the port to the residential portion of the property. 

sunflowerlady

We have everything they told us in writing and they have admitted to giving incorrect advice. 

They won’t mortgage our property, split titles or no split titles. It’s all to do with the proximity of the residential aspect to the commercial aspect. 

All of which they knew when we first applied. 

ACG

You cant force them to lend. 
I think there is an element of them having to cover your costs, but if you are unhappy with their offer you would need to go to the ombudsman. 

sunflowerlady

ACG said:

You cant force them to lend. 
I think there is an element of them having to cover your costs, but if you are unhappy with their offer you would need to go to the ombudsman. 

I’m sorry if I wasn’t very clear. We aren’t trying to get them to lend. We fully understand that it’s not their policy to lend on properties like ours. 

Our next step is the ombudsman, we were just interested in other people’s thoughts of what has happened. 

amnblog

You completed the new purchase without having a mortgage offer.

It seems fortunate they are prepared to offer what they have.

Have you checked your original Lender's terms and conditions? I imagine they state that porting a mortgage product (you port the product, not the mortgage/loan)  is subject to satisfactory underwriting on the new deal.

As ACG says, you have recourse to go to the ombudsman, I can see little grounds for you to receive any further recompense. 

Hoenir

sunflowerlady said:

 It’s all to do with the proximity of the residential aspect to the commercial aspect. 

That's a common reason for many mortgage applications to be declined.