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Rush before mortgage offers expire?

Journalist: Lana Clements, The Sun

ended 19. October 2022

Hello, 

I'm writing a story for Mortgage Solutions around mortgage offers given pre the mini-budget..

I've seen a few nibs suggesting there is a lot of pressure now for sales to complete before the offer expires. 

I'm looking for broker experiences and thoughts on what they are seeing in this regard. 

Is there a danger that some people will miss out on rates due to delays in the process? where are the pain points? 

Any thoughts on the issue appreciated. 

thanks

 

Lana 

4 responses from the Newspage community

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Imran Hussain
Director at Harmony Financial Services
I currently have a client in the process of purchasing a property whose mortgage offer is likely to expire prior to completion, and if this does happen, any new product will have a rate of over 5% instead of the 2% the client currently has and will cost the client an additional £15,000 over the next few years, and this is solely down to vendors not finding a property quick enough or simply unwilling to consider moving into to rented accommodation to ensure the sale & purchase complete and my client is now in a position where he may just pull out or want a significant reduction in the purchase price.
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Graham Cox
Director at Bridging Hub
The great danger now is property chains breaking. Down-valuations on properties by surveyors is becoming more common, which either forces the buyer to stump up the difference between the agreed price and the valuation price, or renegotiate the agreed price down. And both buyer's and sellers are starting to get cold feet. There's so much uncertainty around where house prices and mortgage rates are heading, that many are deciding to hold fire. I've also got a client who received a mortgage offer at a very good rate approved in March. It was for a probate sale, but the vendor's probate has still not come through due to the Covid backlog. The offer has been extended until the end of this month. After that, my client's looking at a new mortgage rate about 3 times as high.
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Joe Stallard
Director and Advisor at House and Holiday Home Mortgages
We've a number of clients contacting us trying to see if they can get an extension to their mortgage offer. Some chains seem to be moving incredibly slowly through the legal stages right now and clients are rightly worried that they'll lose a rate they secured months ago. This can mean a lender reassessment, which in many cases means a steep increase in the rate and monthly payment when comparing mortgage products of a few months ago to now.
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Mark Robinson
Managing Director at Albion Forest Mortgages
I had genuine concern whilst submitting a request with a lender to extend a current mortgage offer last week. The rate was 2.72%, which compared to today 5.8%+ rates is obviously amazing. However, I was pleasantly surprised they approved the extension. Whilst there is a concern that extensions may prove difficult with some lenders, I imagine the majority will continue to operate as they always have and honour extensions in the same way. If you have a mortgage offer, and it is due to expire, don't dilly dally, get in touch with your mortgage broker so they can get it extended in good time.