If our team of Guildford mortgage brokers had received a pound for every time they were asked this question over the last few months, then they’d all have a very good 2023 ahead of them.
The thing is, the turbulence created by that mini-budget has left everything in flux. At one point, those applying for a mortgage were being told to sit and wait. Then, as the cost of fixed rate mortgages increased, the benefits of tracker mortgages came back into the spotlight.
Now, as we enter a period of relative calm after the storm (not to mention the appointment of a new Prime Minister), the cost of fixed rate mortgages continues to come down.
Of course, the days of blindingly cheap fixed rate mortgages are long gone. Well, for now at least. However, the issue is that many people who effectively applied for a mortgage during the eye of the political storm – and who were awarded a mortgage when the rates were at their highest – are now seeing the same mortgage product with a better rate as the cost of fixed rate borrowing comes down.
In this situation, what do you do? Do you ignore the fact that you can get the same mortgage at a cheaper rate and simply be pleased that you have an offer on the table during this period of relative economic uncertainty? Or do you try and get the better rate and hope that by doing so, you don’t have to go through the mortgage application process again and put yourself at risk of the lender declining?
Equally, what if you’ve arranged a new deal for when your current mortgage deal ends in six months’ time and you’re worried about the rates being even lower when the time comes?
Hedge your bets
Our Guildford mortgage brokerage is currently being inundated with people in this very predicament. Thankfully, we have a workaround that should hopefully allay any concerns people might have.
Whether you’re getting a deal in place for six months’ time, or have just seen that the mortgage you agreed to has just dropped by 0.50%, then there’s no need to worry. If you’re in the former category, then our advice is get the best mortgage deal you can in place now – just so that you have something locked in. After all, who knows what could happen between now and then.
Then if rates drop, we will review your circumstances again, free of charge – irrespective of whether it’s with the same lender or a different one and if appropriate, arrange a new mortgage deal for you.
Essentially, it isn’t as big a concern as many of our clients often think it is (until they’ve spoken to us, of course). There are a few things to consider, though.
Tight for time?
Sometimes when applying for a mortgage, time is of the essence. If you’re at the stage whereby you want to change to a better mortgage rate but don’t want to delay things, then switching to a new mortgage product provided by the same lender will be quicker and easier. Having already submitted the paperwork, there won’t be much admin to manage and a decision will be made more quickly. We estimate that this will take no more than 3-5 days in most cases at the moment.
However, if you want to apply for a mortgage deal offered by a different lender, then it could mean submitting substantially more paperwork, the result of which could mean delaying your mortgage offer by several weeks.
In summary, you don’t have to take a higher mortgage offer if you don’t want to. We will work with you to find a cheaper alternative. However, the time difference between switching products offered by your existing lender and applying to a new lender may be significant.
Either way, our team of mortgage brokers in Guildford are here to help.
Looking for independent mortgage advice in Guildford? Contact us on 01483 238280 or e-mail info@complete-mortgages.co.uk.
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