Renewing a residential mortgage on a Buy to Let property?

by Readers Question

15:26 PM, 15th February 2016
About 3 years ago

Renewing a residential mortgage on a Buy to Let property?

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Renewing a residential mortgage on a Buy to Let property?

HSBC sold me residential mortgages on several buy to let properties, approximately 10 – 15 years ago. I converted all of them to interest only when I retired a few years ago, as the income is now part of my retirement funding.wrong

HSBC is now refusing to renew any of the mortgages, as and when the term expires, unless I convert all of them to Buy to Let mortgages at the same time.

I never asked for this type of mortgage, they offered it on all of the properties that I was purchasing and even encouraged me to continue with this approach. They were told that the income was to be used for retirement, when I converted to interest only.

I would be interested to know if anyone else is in the same predicament, as now I am retired and have modest income, it is extremely difficult to renew a mortgage.

Many thanks

James



Comments

Neil Patterson

15:37 PM, 15th February 2016
About 3 years ago

Wow! James in 20 years of industry experience I have never heard of this before.

It does make me wonder if there is a misunderstanding somewhere and it would be worth checking your paperwork again for what and why this happened.

Under FCA (now FSA) regulations and CML guidelines HSBC had to show they knew their customer and offer best/suitable advice.

If this is correct I would make a formal complaint in writing and take it further to the Banking Ombudsman if you do not get a satisfactory reply. Although a residential mortgage would normally have been on preferential terms to a Buy to Let so I am not quite sure what the complaint is.

If you eventually do need to remortgage and would like our help please email me and we will do our best npatterson@property118.com

Puzzler

18:39 PM, 15th February 2016
About 3 years ago

The fact that they're residential makes no difference, whatever type they are you would have to take out a new product under present day criteria (this is true even of portable mortgages). You can't just renew under the same terms you had then. I have a feeling that HSBC only recently came into B2L so that might be why (and note the maximum you can have is four in total - I bank with them and looked into it) but it is surprising that they gave you more than one as it was not a business model they followed.

an afterthought, was it actually HSBC or HFC Bank/Beneficial Finance, a sub-prime loan company which they bought?

Adrian Jones

11:24 AM, 16th February 2016
About 3 years ago

Are you sure HSBC encouraged you and not a financial adviser?

Howard Reuben CeMap CeRER

11:36 AM, 16th February 2016
About 3 years ago

Reply to the comment left by "Adrian Jones" at "16/02/2016 - 11:24":

Hi Adrian

HSBC (and all other retail banks) don't employ financial advisers (nor do they receive introductions from / work with external 'real' financial advisers), as they simply have product salespeople working in branch selling their wares.

James, the good news for you is that the BTL market has grown enormously and many existing (and now many new) lenders are offering 'later life' BTL deals. The most recent change is with a lender who has a maximum age at application at 80 yrs old and they're offering 30 years mortgages too!

Our Team of Advisers can assist with your future mortgage planning.

My profile link has all of my contact details.

Hope that helps.

Mike W

12:12 PM, 16th February 2016
About 3 years ago

James,

Whilst all on this board have very little faith in the fairness of the Financial Ombudsman service, I would very much support Neil's comment. Gather all the evidence to support your case. Make a formal complaint. And if you get stonewalled take it to the financial Ombudsman. That process can take 6 months to 2 years. During that time you will be able to explore the other options that are available in the market.

Now look at it from HSBCs standpoint. They will have to get a lot of professionals to look at this. It may have occurred before and if so you may get a reader to respond. If it hasn't they will have to prepare a defence. (Incidentally if all calls made at the time were recorded - ask for transcripts). It all shows determination to fight.

Frankly I think the odds are against you - totally unfairly - but if you have the time to fight please do. And let us know the outcome.

I took on TMW a few years ago. I demonstrated that I had informed them timely of my plans. I demonstrated that they had not followed their own procedures and timelines. They cost me over £2000 in extra costs to sort out their errors. The Financial Ombudsman initially decided in my favour but because the FO did not read one page of evidence they only awarded me £700. TMW then appealed to the next level of FO - did you know there was an appeals procedure?- and that senior ombudsman decided against me but kept the award at £700. Weird logic? I could have gone to the small claims court but I would have risked having to pay exorbitant defence costs if I lost. I decided after 2 years I had clearly won the moral ground.
I now lobby my MP to get a law change for the small claims court that either side carries there own costs even if it gets appealed to higher courts.

Good luck.

Douglas Barley

12:33 PM, 16th February 2016
About 3 years ago

Reply to the comment left by "Mike W" at "16/02/2016 - 12:12":

Hi James and all. I had exactly the same scenario with HSBC, over a similar period too. They have been quite good with my house mortgage but an absolute nightmare with my B2L's. Fortunately I found a fantastic broker Wade finance, the owner has her own portfolio so knows the ins and outs of B2L. I am retired now but she still finds deals for me - a boast a little while ago was that she had found a deal for an 82 year old who did not have any track record and who thought he would like to dabble in B2L's, there will obviously be others out there but do be careful not all do what they say on the bottle. Happy to talk over with you in greater detail if it helps

Douglas.

Puzzler

21:32 PM, 16th February 2016
About 3 years ago

They do (or did) have people they call financial advisers although they are tied to their own products as you say


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