When do I lock in my mortgage rate during application process?

elouber

Hi all,

Offer finally accepted on a property last week - yay!

Had an AIP that I was happy with direct with lender, in this case NatWest, local brokers were quoting me the same deal I could just get direct from bank, cutting our middle man and saving myself a bit of money.

But, as soon as offer accepted last week, called NatWest to start official application for mortgage. No problem, but if you want an appointment you’ll have to wait to following Thursday (tomorrow)

During the past week, interest rates have gone up following all last weeks announcements - including NatWest’s rates. Did some more research, compared rates with other lenders etc and despite a slight increase, still happy with NatWest rates etc, still want to go with them.

However, at what part of the application process do I essentially ‘lock in’ a rate for my mortgage - I’m looking to do 5 year fixed term, but NatWest have already told me I need to have two meetings with them (one pre and one post their valuation) and whole process from application to approval can take weeks - by which point rates will probably have gone up again?

Is the rate I qualify for the one that’s there tomorrow when I start the process, or whatever the rate is on the day the mortgage may be approved?

Sorry for the essay! Any help would be great- especially if you’ve recently applied with NatWest!

K_S

@elouber I don't know how it works direct, but for intermediaries, generally speaking, it's at the point that the adviser clicks 'submit' on a full application. With a minority of lenders, it can be secured even at the DIP stage.

For example, if a client who has been viewing gets in touch with me on the day they have an offer accepted, I scan the market and send them a recommendation (specific lender and product) the same day along with a list of documents+information (usually latest payslip/s and bank statements in some cases) needed for a full app. If rates are due to be refreshed in the next couple of days (common scenario over the past few months), I point that out as well so that they know that a delay can cost them the recommended rate.

They usually send it across straight away or next day and the application goes in asap at which point the rate is secured.

For the benefit of others who may come across this thread - When you want to secure a rate asap, it may be worth opting for a broker to get an application in asap rather than a direct application which may involve waiting for an appointment. Plenty of brokers don't charge a fee and there are plenty of fee-free brokers listed in the MSE guidance here. 

https://www.moneysavingexpert.com/mortgages/best-mortgages-cashback/#step3

Generally speaking, at all the places I've worked at, clients with accepted offers are given priority with same-day appointments, and applications submitted within a day or two.

kingstreet

Yesterday, we had notification from NatWest that rates are rising again, from today.

As K_S said, a broker will get an application submitted and your rate secured far quicker than direct advised route.