mortgage application when offer not agreed

PasseySam

Hi,

I have a confusing question that I hope someone can advise on.

We are looking to buy a new house as we are relocating and have our flat currently on the market, lots of interest but no offers yet. We have seen a house we love and have put in an offer, after negotiating a little we have reached a price to which the vendor said she would like to sell to us and to call her when we have sold, which I have taken to mean that we are getting pretty close to what she will accept.

We have spoken to a lender about getting a mortgage and they have checked our earnings, ID and outgoings etc and agreed a mortgage in principle. Now the lender is saying that as their current mortgage rates are due to change this sunday (14th feb) we should put our application in now to bag the low rate in case they go up. I have explained that we haven't had our offer accepted yet but she said that didn't matter and that the mortgage application would hold at the current interest rates for 6 months once we had applied and the details can be changed later if we don't buy that house and end up buying a different one.

I am not sure if this is OK? Obviously we want to bag the good rate and perhaps may be useful to get some of the application done now (credit checks etc.?) but I am not totally comfortable with the idea of putting in a mortgage application when the offer has not been accepted for that house, it doesn't seem right somehow.

Can anyone advise on this situation? Obviously we want to get the best rate and having some things sorted out now does appeal to us but I am not sure if it's OK to proceed with an application at this stage. Also when do things like 'booking' fees become due? If we did apply now would we owe the lenders money for fees straight away or only when the application is completed?

Thanks for anyones help

Conrad

You can do this but I suspect they will want you to part with a valuation fee, all or some of which will be non refundable.

herbiesjp

Do not feel pressured into signing for something you are not ready for.

You sign when YOU want, not when the lender tells you to sign.

The rates may go down.

Other lenders may reduce their rates.

Booking fees can either be paid upfront or added on to the mortgage.

PasseySam

Hi,

Thanks for the speedy replies to my queries, my main concern was that it seemed a bit dishonest to apply for a mortgage on a property that we haven't actually agreed a sale on. I didn't want the vendors to find out we were applying for a mortgage before we had agreed the sale with them!

If we did apply then presumably the application could only go so far as the valuation cannot be done until the sale has been agreed and is proceeding?

Thanks so much for your excellent advice as always, it's great to have so many knowledgeable people giving their time and advice to others on the forum. :T

herbiesjp

It is not dishonest.

It just could be a waste of time. The valuation is not conducted until the sale has been agreed.

By that time other better deals may be available - then again, they may not.