When can my mortgage offer be retracted?

vaderag

I have a mortgage offer that has an expiry date of August

Now, with all the tumultuousness around Brexit and rates etc, I'm hoping to sit on the documents and not return until post Brexit date to see what happens and if I might want to re-apply for a slightly lower rate (or submit this one if rates go up!)

I know that the lender can retract the offer if my circumstances change, but what if the market circumstances change?! If rates suddenly shoot up, can they say thanks but no thanks, despite an August expiry date?

Thanks

katherz44

I have no idea, but I'm interested in following this as I'm in a similar position!

Exodi

vaderag wrote: »

I know that the lender can retract the offer if my circumstances change, but what if the market circumstances change?! If rates suddenly shoot up, can they say thanks but no thanks, despite an August expiry date?

The terms for amendment of my current offer;

We are committed to making this loan before the offer expires unless:

• there is a material change in your personal or financial circumstances
• there is a material change in the value of the Property
• we have reason to believe you’ve given false information about you or the Property
• the conveyancer raises any issue which makes the Property unacceptable to us.

The second clearly relates to changes in the market so it would seem they can retract an offer on these influences alone - I don't however think they can do so solely because of interest rate increases (though interest rates and house prices would go hand in hand). How often they actually action the second point is another matter entirely.

davidmcn

Exodi wrote: »

The second clearly relates to changes in the market so it would seem they can retract an offer on these influences alone

A change in interest rates isn't a "change in the value of the Property" though.

Exodi

davidmcn wrote: »

A change in interest rates isn't a "change in the value of the Property" though.

Sorry, I updated my original post after you quoted me to clear up that very point, I was originally answering the first half of the OP (asking if they could retract an offer based on market forces).

Regarding interest rates & house prices, there will be correlation.

EDIT: A random page from googling it https://www.economicshelp.org/blog/10942/housing/house-prices-and-interest-rates/

davidmcn

Exodi wrote: »

Regarding interest rates & house prices, there will be correlation.

Eventually, yes, but I doubt anybody could objectively say that a property's value changes the moment the BoE puts up base rates.

Exodi

davidmcn wrote: »

Eventually, yes, but I doubt anybody could objectively say that a property's value changes the moment the BoE puts up base rates.

Not objectively but in the same sense nobody could objectively say they wouldn't (and I say this after watching the exchange rate and share prices bouncing up and down after MP's say things for the past year). Plus it wouldn't need to be instant - mortgage offers typically last for 6 months, it's enough of a time frame to make it probable that interest rates and thus house prices could change enough that a lender may reconsider their offer.

But we're mostly talking in rhetoric, it is incredibly unlikely from my point of view. A change in the base rate would have an impact nationally (as to mean they're hardly going to recommission valuations on every offer) and would be faced with the quandary of revoking all of their existing mortgage offers or accepting it.

Thrugelmir

If you don't formally accept the offer. Then there's no reason why the lender cannot retract the offer. Thereby forcing you to reapply and be subject to the lending criteria at the time.