Mortgage provider obligation to make you aware of a better product Steve0780

#1
Basic question.



Is a Mortgage provider obliged to make you aware of a better product they provide than the one you initially approach them to apply for.



A friend at work has remortgaged with Virgin money in the last year and his LTV had improved such that it appears that he was at the time actually eligible for a better rate than the one he signed up for. Looks like he stands to lose around £1000 over 3 years.



Were they wrong not to make him aware of this?

Has he got any grounds for recourse on this?

Any advice would be very much appreciated as he is driving us all mad with it!



Thanks



Steve

#2
It depends.



Did he go through a self selection execution only route, or an advised process?



If it was self selection, then I don't see how there can be any come back, as the offer document would clearly state Virgin Money have not provided him with any advice.



If it was an advised process, is it possible the adviser recommended the most cost effective option, albeit on a higher rate of interest? I.e, cheaper overall not to pay any product fees, etc. The adviser will have reasons on his mortgage file as to why they recommended that specific product.

#3
I'll ask him what is on his offer document. From the sound of it he was advised, but not shown the most cost effective product for his criteria, but will find out.



Is the mortgage lender obliged to hand over the mortgage file if he asks to see it?

#4
Yes the customer is entitled to see all information regarding their application upon request.



It may be an idea for him to contact the adviser in question initially for clarification, there may be a simple explanation as to what happened - when it comes to mortgages people do get the wrong end of the stick all the time.



For example, they do a three year fixed at 1.69% with fees (£995), and another three year at 2.09% with no fees, depending on the size of the mortgage and term, the fee could easily tilt the recommendation to be for the fee free product.

#5
If he switched products over the internet, it would have been non advised.

If he switched products with a person it would likely have been advised.

However, saving money is not a reason alone for a miss sale. If your friend wanted greater security then a longer term fix may have been recommended.

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