If you’ve been reading the news this week about mortgage lenders pulling products in response to the government’s mini-budget, you may be worried about your own mortgage offer. Is it likely to be withdrawn? Read on to find out where you stand…
The news may sound grim but don’t panic just yet. If you have a mortgage offer already agreed in writing, then it should be honoured.
Some lenders have chosen to temporarily withdraw new products from the market. Other mortgage products in the market remain, albeit at higher rates than before.
Lenders who have chosen to withdraw products have done so in response to the government’s mini-budget because they want to ensure they aren’t lending at a loss. They are expected to be back in the market soon.
To date, we have not yet seen any lenders withdrawing mortgage offers that have been previously issued in writing. In essence, if the application has been made, the rate should be secure.
However, if you have received a mortgage Agreement In Principle (AIP), which isn’t a formal mortgage offer but merely an indication of what you could borrow, this won’t be binding. It’s unlikely to include a specific rate in any case. It merely confirms that you have passed a lender’s credit scoring process and that they might be prepared to lend to you.
Unlike an Agreement In Principle, a formal mortgage offer outlines the full details of the mortgage loan, i.e., the amount of the loan, the term, the monthly payments and the interest rate you will pay.
If you are hoping to buy a new property or are looking at refinancing an existing mortgage, get in touch with your broker and ensure that you provide them with all of the documentation they request as quickly as you can.
During these challenging times, good advice is crucial. We’re here to help.