Buy to let Mortgage for off -plan flat- after 6 months, new deal completlety un-affordable
6 months ago i got into a deal to but -to let a one bed off plan for 177,500. Developer was giving 5%, i gave deposit back then 5% (9k), and the rest 5% (15% total) was supposed to give on completion which is september 2008.
I got a mortgage deal from the prefered fianancial advisor of the developer so I could get the incentives the developer was offering. The mortgage i got back then was for the remaining 85% (150,000) of the value of the property, only after the mortgage provider did survey the property. As my financial advisor advised me back then, this offer could only last for 6 months, and send me a letter at the end of the deal saying (to cover him self) the least i will have to pay when i will renew my mortgage will be 5%.
Even though he was insisting that the payment will depend on how high BOE interst rate is. Back then was 5.75% and now is 5.35%, so i thought My payment will remain the same plus my rate will become better as well.
The reality is very different. Now that the time of renewing my mortgage deal the same advisor very calmly, like there was nothing wrong suggested my mortgage offer has changed from 150k to 118k, leaving me to pay an extra 32k. - so with the developers deposit paid i would have to pay a total 33% deposit to acquire this one bed flat.
As some of you might understand this is something that i had never planned for and threw me off budget completely. Now i am in a situation that the developer says that i have a legally binding contract with them and need to buy the property, otherwise i lose my initial 5% deposit. This is a life's savings and a completely unacceptable option for me.
So i am thinking:
Didnt the bank back then when they did the survey conclude that the property does not worth that much as advertised?
Why did they agree to mortgage me with 150k, and after 6 months tell me they can only give me 118k? Have i not got any right against this decision? I am literally stolen my 5% deposit with this deal. I am so lost it is not even funny. i got problems with my wife because of this.
Does anybody could advise me of further action?
what should the developer do on this instance?