How long do mortgage offers last?

Parm

Hi all,

My current fixed term expires on March 31, 2017, so I'll be looking to remortgage to a better deal on April 1, 2016.

A lot of guides seem to suggest that while some providers used to guarantee a rate for six months after acceptance, most have now cut that down to 90 days or less.

I haven't been able to find a list of how long offers are valid from various suppliers, so I just phoned HSBC out of interest and the chap didn't seem entirely sure. He said it can be valid for up to three months, but varies depending on circumstances?

Cutting a long story short, is it too soon for me to start applying? Or, better still, does anyone know of any providers that do guarantee an accepted offer for six months?

Thanks.

lee111s

I think for new mortgages, it's usually 6 months, remortgages 90days. It does depend on the lender though.

I would start looking at the end of January.

ACG

3 months on remortgages usually.
Anything before mid December is probably a little premature.

Parm

I was really hoping I might get an agreement in place before Christmas. Would certainly be nice to have the extra peace of mind before the holidays.

I might pop into a few branches this weekend to see if I can get accurate timelines from a few providers.

Making things more complicated, I've just been on the phone to my existing provider (Accord Mortgages) who have said they can't give me an accurate cost of redeeming the mortgage until a month before the fixed term ends! Entirely unhelpful as I'm not sure how else I work out the amount I need to borrow on a remortgage application.

ACG

You could find it counter productive. If you wait until you are within 3 months of completion you will have probably 100% of lenders avilable to you (subject to the rest of your circumstances), if you are looking for a lender with 4 or more months then your options are going to be limited to maybe 10% of the market, when you start reducing the pool of lenders down that much you tend to find the rate you get is higher.

As for the redemption figure, no lender will give you a figure this far in advance. It is typically 1 month before. That is because there are a lot of variables. You can get a good idea of what the balance will be using an amortization calculaor (look on google), if you put on an extra £500-1000 to cover an eventualities and then if you end up with a few extra quid in your bank on completion you can either make an overpayment or spend it.

AnotherJoe

Parm wrote: »

I was really hoping I might get an agreement in place before Christmas. Would certainly be nice to have the extra peace of mind before the holidays.

I might pop into a few branches this weekend to see if I can get accurate timelines from a few providers.

Making things more complicated, I've just been on the phone to my existing provider (Accord Mortgages) who have said they can't give me an accurate cost of redeeming the mortgage until a month before the fixed term ends! Entirely unhelpful as I'm not sure how else I work out the amount I need to borrow on a remortgage application.

Surely you can work it out roughly? It doesn't need to be exact for the purpose of quotes.

Suppose your mortgage balance owed decreased by £6000 last year? So its decreasing by £500 a month so oto March 31 thats 4 months so knock off £2k over what you owe now. Then add any redemption penalty there might be which will likely be £99 or £199 or similar.

Its not going to make any difference if you are remortgaging (say) £167,000 or £168,000 unless you are right on the cust of a key LTV ratio and then that depends what your house is worth which will be different and unknown now for next March anyway!

Parm

AnotherJoe - thanks for the help. I was under the impression that I had to have the exact amount but it'll be far easier if I can work it out roughly. Accord has given my outstanding balance as of today, so I do have an idea of what it will be once the fixed term expires.

ACG - I went into a HSBC branch and spoke to a lovely lady who was very helpful. She confirmed that their offer would be valid for six months, so I could now apply anytime before my targeted April 1 remortgage date. Good news because I like the look of the HSBC rates.

I'm going to spend the weekend getting my paperwork in order and then I'll get the ball rolling.