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February 2024 Newsletter

Well, January swept in as a breath of fresh air after a turbulent past year. With general inflation staying steady and salary inflation starting to drop, the market saw some big positive changes and allowed a bit of hope for the shape of 2024. 

I'll go into more detail around the rates in this update and discuss what happens when you have a mortgage offer in hand but the interest rates have reduced. 

Latest News

With inflation steadying at 4% and expected to decline throughout 2024 the feeling in the market has been a lot more positive. 

Lenders have certainly taken note of the these positive signals and have been cutting rates left right and centre. Some of these reductions have been very significant, so significant in fact that as quickly as some lenders released these rates they adjusted again 

Santander announced the first sub 4% interest rate on January 10th, the first I had seen in a while and many other lenders followed suit.

 

This was quickly followed by a slight increase across the more aggressive reductions and there is a feel that rates have settled into their more usual rhythm albeit at a much lower level than a couple of months ago.    

The positive news has not been missed by the many people who have held off on making a move and first time buyers waiting to purchase their first home. There seems to be a new a new spring in the property markets step making a very busy start to 2024 with no sense that it will slow down any time soon. 

 

It's also been incredibly good news for those who need to remortgage as the remortgage payments are not as worrying as they once were. 

Mortgage Rates Today

Can I Select A New Rate After Mortgage Offer?

Many mortgage offers will be valid for 6-months, this is an unofficial industry standard but can and will change depending on the lender and the product.

So, it's usually a good idea to submit your remortgage application just under 6-months before your fixed or tracker rate ends. Likewise if you are purchasing, it's best to make sure that the expected completion is within 6-months of submitting your application (there are cases that sit outside of this such as new build purchases with new build specific mortgages and I'm sure, other examples)

 

So, you might wonder, what happens if you select a rate at the outset and three months after the mortgage offer is issued, before you complete, the rates have dropped.

 

Are you stuck with that rate? 

 

The answer is a resounding no. Just because you have a mortgage offer, it doesn't mean you need to use it. 

For remortgages especially, it's important to secure a mortgage offer as soon as possible. We can always request a new rate if they lower later, but if they rise at a later stage we will have missed our chance. 

It's the same in the purchase journey, secure that rate at the first possible opportunity, it can always be reviewed later. What I would say is that the most important thing to keep in mind is that the change of rate doesn't affect your purchase or remortgage timescale. We certainly don't want to create any hold ups. 

Our process, once a mortgage offer has been achieved, is to set a reminder a month before your scheduled remortgage or 2.5 months after your offer has been accepted on a purchase. This way we can comfortably review your rate without the risk of affecting your purchase or remortgage. 

We have options when it comes to selecting a new rate, we can either submit a completely new application with a new lender if the deal is fantastic and we have the time.

Or we can request a new rate with the existing lender. In this scenario a lender will usually recredit score the applicants and check for any changes which may affect affordability before they issue the new offer. 

Your solicitor will need to be in possession of your mortgage offer at exchange and will need to have the mortgage offer in hand a good week before completion in order to request funds in time for completion.

 

These processes can be far from simple, the impact of getting it wrong can be costly, not just financially. This is why it's important to have a Mortgage Advisor to handle these requests. We'll understand the timescales and implications of all options, we fully manage the process on your behalf to ensure it all runs smoothly

Jen Boulter

Schedule a Time to Discuss Your Options Today

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