Can a bank pull an accepted remortgage offer because rates change and you got a good deal?

whitedragon101

I have read that a mortgage lender can pull out of a mortgage deal before the money is actually transferred.  But I'm not sure if they are restricted as to what reasons are legally acceptable to do so.

I have secured a mortgage offer through L&C (the one recommended by this website) brokers at 4.39%.  I see mortgage rates continuing to rise.
The remortgage doesn't start till November.  If by November the rates by then are a lot higher than my offer can the bank simply pull it because they don't like the deal anymore?

kingstreet

No. Specific reason needed, such as suspected fraud for example.

HobgoblinBT

“Yes but”.  

When I worked in mortgages a rate could be agreed but was not binding until/unless the booking fee was paid.  I expect that the terms and conditions for the loan will also include circumstances under which the lender can withdraw an offer.   So your “agreed” rate might not have been confirmed within the lender’s books because all of the terms and conditions had not been met (ie paid the booking fee).

So my question to the OP is did you pay the fee and if so upon cancelling the deal did they refund the fee?

kingstreet

HobgoblinBT said:

“Yes but”.  

When I worked in mortgages a rate could be agreed but was not binding until/unless the booking fee was paid.  I expect that the terms and conditions for the loan will also include circumstances under which the lender can withdraw an offer.   So your “agreed” rate might not have been confirmed within the lender’s books because all of the terms and conditions had not been met (ie paid the booking fee).

So my question to the OP is did you pay the fee and if so upon cancelling the deal did they refund the fee?

Would an offer be issued in such circumstances? Typically, a product fee is paid upfront on application or added to loan.

ACG

kingstreet said:

No. Specific reason needed, such as suspected fraud for example.

What about when Vida did it. 
They obviously blamed covid but they had plenty of offers there that could have been allowed to complete. 

kingstreet

ACG said:

kingstreet said:

No. Specific reason needed, such as suspected fraud for example.

What about when Vida did it. 
They obviously blamed covid but they had plenty of offers there that could have been allowed to complete. 

It's supposed to be a binding offer. No idea about Vida, sorry.

simon_or

If it's a big bank, I think the bank has secured your funds at a cost on which they will make a profit on your mortgage even if rates go up after that point. 

And once an offer is issued, a big bank like Halifax or Nationwide or Barclays withdrawing it is very rare.

The way I see it nothing to worry about.

gener8or

Dont worry!
I was similar to you last year.
Secured a rate May for 5 years 2.29% to start 1st November.
All went fine.

bamgbost

gener8or said:

Dont worry!
I was similar to you last year.
Secured a rate May for 5 years 2.29% to start 1st November.
All went fine.

Bargain that! I did remortgage at same time on 5th May, but for 4%+!

whitedragon101

HobgoblinBT said:

“Yes but”.  

When I worked in mortgages a rate could be agreed but was not binding until/unless the booking fee was paid.  I expect that the terms and conditions for the loan will also include circumstances under which the lender can withdraw an offer.   So your “agreed” rate might not have been confirmed within the lender’s books because all of the terms and conditions had not been met (ie paid the booking fee).

So my question to the OP is did you pay the fee and if so upon cancelling the deal did they refund the fee?

Thanks.

There was no booking fee. There is a fee to take out the mortgage of £999 which has been agreed to be added to the mortgage

amnblog

Mortgage Offers are binding since 2012. They wont take the rate offer away.