Mortgage rate lowered since offer in Principle

Nemo82

We have an offer in principle and had the valuation done on the property, however, in the meantime Natwest's interest rates have dropped from 3.39% to 3.14%, we spoke to the Natwest mortgage advisor before the formal offer was made asking her to lower the rate to the current rate and were told this wouldn't be a problem, however, when the formal offer came through it was at the higher rate. They are now refusing to lower it unless we pay a second arrangement fee (we haven't actually paid the original fee yet). As we haven't actually signed the formal mortgage offer can they do this and are we able to just walk away without any charges?

Any advise would be much appreciated, I am waiting for her to call me back and I would like to be able to put a good argument across.

luckyfool

Depends if there is a withdrawal fee on the product/application.

betmunch

I believe the NatWest will insist on you paying the arrangement fee on the 3.39% mortgage as it has now been offered.

If you want to change to the 3.14% offering they currently have then they will charge you the arrangement fee for that mortgage as well.

If you had decided to change the product BEFORE the mortgage was offered I think you would have got away with it, however now it has been offered they will want you to pay the arrangement fee whether you take the mortgage or not.

I may be wrong, but I am 95% certain this is how the NatWest work.

You will need to show that the request to change the product was put forward before the formal offer was made and that it is NatWests error, then they should change the product without you having to pay the fee!

The issue is likely to be one of communication between the advisor and the underwriter.

Also, check the date of issue on the formal offer you have, is it before the request to change product?

Good Luck getting it sorted, let us know how it turns out.

Cheers

Nemo82

Thanks for replying.

This is the problem, we did request the lower rate over 2 weeks ago before the valuation/survey was arranged so way before the formal offer was made. We didnt receive the formal offer letter until yesterday and I was shocked to see the higher rate quoted, unfortunately I don't have the letter with me so can't check the date but Im 100% sure it will only have been offered this week as the survey was not completed until last week. Ive left 2 messages now for the mortgage advisor and still no call back, this is very frustrating :mad:.

Will keep you updated