Can lenders change rates mid application?

Doorlock21

Our application has been in with lender for 7 weeks as they have had delays. 

Today we were told they are happy to offer however they were dropping our maximum loan by £20k due to BOE base rate and changed affordability etc.

our MB and director have obviously raised this to a much senior level as this is something that is ridiculous.

can they really do this?

ACG

They can not change the rate. 
But the loan amount due to the base rate change potentially yes. They have to stress test the mortgage, its possible that this can happen. I have never known it to happen personally - who is the lender? Its well worth knowing. 

Doorlock21

ACG said:

They can not change the rate. 
But the loan amount due to the base rate change potentially yes. They have to stress test the mortgage, its possible that this can happen. I have never known it to happen personally - who is the lender? Its well worth knowing. 

Kent reliance.
but application has been in for 7 weeks, there delays. 

We are fighting it, and even someone from Kent reliance has put, they didn’t think it added up either?! 

Bonkers!

ACG

There is a flip side to this though, when rates were going down, I have had the opposite happen. 
We applied to a lender who assessed affordability using bank statements. I calculated things differently to the underwriter. The underwriter came back with a lower figure, during the period of going back and forth, they reduced their rates and the underwriter agreed the higher amount. 

Doorlock21

ACG said:

There is a flip side to this though, when rates were going down, I have had the opposite happen. 
We applied to a lender who assessed affordability using bank statements. I calculated things differently to the underwriter. The underwriter came back with a lower figure, during the period of going back and forth, they reduced their rates and the underwriter agreed the higher amount. 

What do you think we should do In our situation?

we submitted our application before the BOE rates were introduced!

K_S

@doorlock21 I'm pretty sure mainstream lenders wouldn't apply this approach once a full app has been submitted, and I personally haven't seen this happen. But smaller lenders like KR have much less leeway in the current volatile environment so I suppose it's possible in these times.

I think your best shot is leaning on your broker to see what they can do by speaking to their BDM at KR. Good luck!

Tom_Ballard

@Doorlock21 we have had this happen to us, where they decided to adjust the level of funds they were willing to lend and increased the fixed rate offered by over 1%... we bit the bullet and went shopping, but not everyone has that luxury. 

I would lean on your broker - its what they are there for!

Doorlock21

Tom_Ballard said:

@Doorlock21 we have had this happen to us, where they decided to adjust the level of funds they were willing to lend and increased the fixed rate offered by over 1%... we bit the bullet and went shopping, but not everyone has that luxury. 

I would lean on your broker - its what they are there for!

Ours is sorted now! We challenged it

K_S

Doorlock21 said:

Tom_Ballard said:

@Doorlock21 we have had this happen to us, where they decided to adjust the level of funds they were willing to lend and increased the fixed rate offered by over 1%... we bit the bullet and went shopping, but not everyone has that luxury. 

I would lean on your broker - its what they are there for!

Ours is sorted now! We challenged it

@Doorlock21 Happy to hear that's it sorted out and thank you for updating the thread with the outcome.