Considering lower my offer due to mortgage rates increase, is this a reasonable excuse?

sidneyvic

And people wonder why they get in arrears and end up repossessed........
You cant afford the house if you can't afford the current increase, what happens when base rate hits 4% or more ???? 

Troy_af

RelievedSheff said:

You are buying more than you can afford if such a small increase in rates takes it out of your budget.

Don't lead anyone on any further. If you can't afford it pull out now.

Thank you for your advice. But from these type of  comments I can only assume that some of you are totally unaware of the cost of living crisis that has arisen over the last 6 month. For the record this is apparently the same reason that my buyer has apparently pulled out the purchase, they can no longer afford the purchase.

So as to leading anyone on, this has caused me hell for the past year or so trying to move home and it has cost me thousands now in fees/surveys that I wont get back. The last thing I ever want to do is lead someone on, believe me.

As to this post and others above, suggesting that a £100/month increase in interest payments alone (which btw could be more like £230/month if they continue to rise) is a "small increase" or insignificant, is beyond me.

sevenhills

Troy_af said:

We already offered above the asking price and above what the property was valued at by our surveyor and I don't believe that property prices have risen in our area since i out the offer in, in fact they may have dropped slightly.

If that is how you are thinking, the buyer of your house could be thinking the same.
Could you take a lower price for your house? You could think about staying put!

user1977

Troy_af said:

As to this post and others above, suggesting that a £100/month increase in interest payments alone (which btw could be more like £230/month if they continue to rise) is a "small increase" or insignificant, is beyond me.

I think the point is that you ought to have already budgeted for it (mortgages were only ever going to head one way), and whether it arises before or after you complete ought to be not particularly relevant.

babyblade41

Sorry to say buying for you is too much out of your comfort Zone.

If this small increase is out of your budget  then you are over stretched .Time to pull out and re-think

Ksw3

We're in a similar position although problems are with our seller. We could probably afford the extra £150 a month but if one of us lost our jobs it would be really really difficult and bring back lots of awful memories from growing up. I value security very highly. 

It feels like we will end up paying the maximum house price with the highest interest rate over the ten years it's taken to save the deposit. It doesn't feel very fair when it seems to be that the headwind is never in your favour. 

housebuyer143

As others have said, you were not fixing the rate at 2% for life, so what was your plan in 2 or 5 years when you go to remortgage and realise that rates are 6% or more, which is very very likely? Would you not be able to afford it? Have you thought about this at all? 

If you cant afford the rates at 4% which is still low in the scheme of mortgages then you will be in trouble. 
You are overextended and you need to be thinking about a smaller purchase. 

To answer your question, if I was your seller and you came to me saying your buyer had dropped out and and you wanted a reduction it would go right back on the market. I might have sympathy and let you get a new buyer but that would immediately be lost if you asked for the reduction.

Altior

Troy_af said:

RelievedSheff said:

You are buying more than you can afford if such a small increase in rates takes it out of your budget.

Don't lead anyone on any further. If you can't afford it pull out now.

Thank you for your advice. But from these type of  comments I can only assume that some of you are totally unaware of the cost of living crisis that has arisen over the last 6 month. For the record this is apparently the same reason that my buyer has apparently pulled out the purchase, they can no longer afford the purchase.

So as to leading anyone on, this has caused me hell for the past year or so trying to move home and it has cost me thousands now in fees/surveys that I wont get back. The last thing I ever want to do is lead someone on, believe me.

As to this post and others above, suggesting that a £100/month increase in interest payments alone (which btw could be more like £230/month if they continue to rise) is a "small increase" or insignificant, is beyond me.

Don't take this the wrong way Troy, but it sounds like you're only familiar with a low interest rate era. In the financial world before QE, what we've seen to date this year would be considered only tiny fluctuations in the world of central bank rates. Your application should have involved a stress test at something like your lender's svr +3%.

For a mystifying reason, the BoE have recently announced that stress testing legislation is being rescinded, but it would have been in place at the time of your application.

Troy_af

user1977 said:

Troy_af said:

As to this post and others above, suggesting that a £100/month increase in interest payments alone (which btw could be more like £230/month if they continue to rise) is a "small increase" or insignificant, is beyond me.

I think the point is that you ought to have already budgeted for it (mortgages were only ever going to head one way), and whether it arises before or after you complete ought to be not particularly relevant.

Of course I understand that rates will go up and down. But the difference between 2% to 4.5%, as well as all the other rises in costs of living in such a short time period, will have an effect on affordability for most people. Hence, as I said, what was an affordable property 6 month ago for someone, may not be now. Again as mentioned, this is the apparent reason behind me losing my buyer.

I only was asking if a reasonable way out of this was to offer less, not to be bombarded with "its your own fault if you cant afford it". Sales are falling through due to interest rates rising and mortgage offers expiring before completion, there are many online articles covering this, so it is certainly not just me.

nicknameless

Troy_af said:

user1977 said:

Troy_af said:

As to this post and others above, suggesting that a £100/month increase in interest payments alone (which btw could be more like £230/month if they continue to rise) is a "small increase" or insignificant, is beyond me.

I think the point is that you ought to have already budgeted for it (mortgages were only ever going to head one way), and whether it arises before or after you complete ought to be not particularly relevant.

Of course I understand that rates will go up and down. But the difference between 2% to 4.5%, as well as all the other rises in costs of living in such a short time period, will have an effect on affordability for most people. Hence, as I said, what was an affordable property 6 month ago for someone, may not be now. Again as mentioned, this is the apparent reason behind me losing my buyer.

I only was asking if a reasonable way out of this was to offer less, not to be bombarded with "its your own fault if you cant afford it". Sales are falling through due to interest rates rising and mortgage offers expiring before completion, there are many online articles covering this, so it is certainly not just me.

It sounds like your only option if it's now unaffordable.  I think some of the reactions are due to the apparent lack of headroom in your finances for this purchase.  Whilst it might seem harsh I think the sentiment is correct.  It sounds like the purchase is an overstretch regardless of other increasing costs in the meantime.

Edited to add that of course that's not what you want to hear or something that is easy to out across easily without offence.