Do mortgage lenders really have to honour an illustration 6 months later?

Lister_2

Hi all,

I remember reading an article on this site which I now can't find, which said it was worth looking for mortgages now, even if your current deal doesn't run out for another 5 months. I have a few questions if that's ok?

1) Is just getting an illustration in writing enough, or do you have to have an actual mortgage offer?

2) Is there a list of lenders and the periods their offers last anywhere? I assume 6 months is the absolute max and other will be less than that.

3) If I just need an illustration, are they REALLY legally bound to offer me the mortgage? It seems to me there would be plenty of wiggle room (ie illustration ok, but when I actually apply them I'm suddenly not applicable etc).

Cheers,
Lister

minimike2

No.

Illustrations are only valid at the time of production. They say that in the very first section.

Even a mortgage offer is not binding and can be withdrawn at any time prior to completion.

Conrad

Lister what you read was that it may have been advisable to apply for a mortgage rate in order for that product to be 'booked', and indeed it is the case that lenders then honour those terms up to 3 or 6 months.

An illustration on the other hand is not an application and so does not confere any rate promise. Its like saying you had picked up a brochure for a Rolls Royce, so the garage has to now sell you one no matter what your status!

Lister_2

Ahh, ok. Thought it sounded a bit doubtful!

So in theory I could apply for a mortgage today and should I get an offer, I can sit on it for 3 months? :?

lisyloo

With your existing lender they usually have 3 month time limit.

With a different lender they usually have a 6 month time limit.

Bear in miond though, in order to get an offer it's probably going to cost you something and add a search onto your credit file, so it's not something to do lightly.

Rates are falling possible sharly, so you are probably better of waiting.
Remortgages can take up to 3 months if the lender is busy but if rates are falling then I'd probably risk going to late (and being on SVR for a few weeks) rather than going too early and risk being on an uncompetitive deal.

You can change your mind, but bearing in mind the fees and credit searches it's not something you want to be doing too many times.