Mortgage backup advice

niceguyed

Hi all, I've scoured the threads about backup mortgages but have seen some conflicting advice. 

Current situation is we have a 10 yr fix 3.49% mortgage offer with Halifax that expires on 31.12.  arranged via a broker. 

This was for a property we had to pull out of due to undeclared subsidence. We've just had an offer accepted on another property (no upward chain) and we will be chain free as breaking chain on current sale that goes through on 6 Oct. 

Spoke with our broker and they say no issue changing property, they will key it in and a fresh valuation on the new property will be done. We asked about an extension and as they used to work for Halifax they said very likely we would get a month if needed.  I spoke with Halifax today who confirmed the former but couldn't confirm/deny the latter. 

Solicitor seems confident we could complete before expiry but I'm a pragmatist and would prefer a contingency plan. I asked my broker about a backup mortgage and they were not at all keen and advised against it, main reason given was could be viewed as potential fraud. However, on threads here I've seen brokers advice against second mortgage offers and some say it's not a problem. 

Very interested in views on this and real life experience.

Personally I'd prefer to have a backup but can't figure out if this would be a full offer or I just need a AIP to secure the rate?  

What I don't want is to spend thousands on legals and survey and get to mid Dec and if we need an extension and we can't get it. Then we're at the mercy of whatever rates are in Dec (much higher) actually making it unaffordable for us. 

We would have a big deposit and could go up to 4.5% for a 10 year fix (15 year term).

Thanks in advance!

K_S

@niceguyed I'm surprised to say the least. 

Property change: I could swear that I've done in in the past, but when I asked the Halifax BDM this exact question re property change for a client, the answer I got was that you can indeed change the property on a Halifax offer BUT at that point will also need to select a product from the current product-guide (menu). If your broker does manage to change the property and keep the rate, then please do drop a note on this thread as in that case I've been given wrong information!



Extension: Halifax products have a 'complete-by' date (which appears to be 31/12/2022 in your case) and normally there is no process to extend the offer beyond that unless you select a current product/rate.

niceguyed said:

Spoke with our broker and they say no issue changing property, they will key it in and a fresh valuation on the new property will be done. We asked about an extension and as they used to work for Halifax they said very likely we would get a month if needed.  I spoke with Halifax today who confirmed the former but couldn't confirm/deny the latter. 

With respect to 'securing' a rate, other than Nationwide (which allows you to reserve a product for up to 90 days at DIP), with the vast majority of lenders a rate is secured only when a full application is submitted.

A bit off-piste, if you only need a 15 year term and are happy with long fixes then as a backup you could even look at Kensington Fixed For Term products that offer 15 year fixes starting from 4.07%.
https://www.kensingtonmortgages.co.uk/docs/default-source/product-guides/residential-product-guide.pdf

niceguyed

Thanks for the reply KS, I will report back. I've emailed my broker again regarding a backup.   Please do not take offence but I hope you're wrong about the product switch  and extension! I should know shortly either way. But I'd still be grateful for any views concerning a backup offer.

housebuyer143

I can chime in on having two offers at once. I did this exact thing when buying mine as I needed to borrow more as a back up and couldn't do it with the lender I currently had the offer with. 
There is no problem doing this as long as you are upfront about it, and use the same solicitor. If you use a different one it might look suspicious. 

Apart from an additional hard check nothing came of it and see ended up using the new offer and letting the old one expire.