Broker system encourages disloyalty?

atlasmm

Hi all,

First time remortgaging - just want to make sure I properly understand the process and what our broker is saying. 

Applied initially a few months back and was issued an offer. Now rates have dropped but not with the lender who have already offered, a different lender. 

Our broker is saying that the only way they can apply for this is if they first cancel our existing offer/application. Is this correct? 

If so, 2 questions:

1) seems a severely broken system as you cannot proceed with lower rates without risking forgoing your current offer - knowing that if the new application isn’t accepted, you’re left with no offer at all?

2) does this not just encourage disloyalty to your broker, as if your current broker cannot proceed with a new offer why would you not just use another free broker (or apply directly) in order to protect yourself and keep the old offer at the same time, such that if the new application fails you have that to fall back on. 

If my understanding of this system is correct, then seems a very broken system. 

Thanks 

born_again

What rates are your current lender offering?
Staying with them & going direct with then & a rate switch. Means no financial assessment.

Mark_d

If you don't cancel your first deal and get accepted for a second deal, then you could potentially be borrowing £1m hen your property is only worth £500k.

I'm currently in the process of a remortgage too.  I had to give up on a mortgage with Barclays when I found a cheaper one with Halifax.  That's just the way it goes.

atlasmm

born_again said:

What rates are your current lender offering?
Staying with them & going direct with then & a rate switch. Means no financial assessment.

Unfortunately nowhere near what new lenders are offering so not an option. 

atlasmm

Mark_d said:

If you don't cancel your first deal and get accepted for a second deal, then you could potentially be borrowing £1m hen your property is only worth £500k.

I'm currently in the process of a remortgage too.  I had to give up on a mortgage with Barclays when I found a cheaper one with Halifax.  That's just the way it goes.

So you’re saying you gave up an offer from Barclays, before applying with Halifax? So if Halifax hadn’t accepted your application you’d have been left with no offer at all?

ACG

There are 2 potential reasons for this:
1) The brokers compliance process is to only allow one application at a time. There are reasons why they may do this, but its not like a regulatory requirement. 
2) The broker is being lazy and just doesnt want to go through the process of making 2 applications. If you have gone down the route of fee free, the broker is basically in a position now where they have done a load of work and now wont be getting paid on it. They are going to have to do the work again and who is to say it wont happen again? Thats not your problem btw. But I can see why the broker is trying to avoid having to make a second application... We charge, we would make the second application no problem. 

However, you have to consider that a new application COULD affect your current mortgage offer - another credit check for example. 

atlasmm

ACG said:

There are 2 potential reasons for this:
1) The brokers compliance process is to only allow one application at a time. There are reasons why they may do this, but its not like a regulatory requirement. 
2) The broker is being lazy and just doesnt want to go through the process of making 2 applications. If you have gone down the route of fee free, the broker is basically in a position now where they have done a load of work and now wont be getting paid on it. They are going to have to do the work again and who is to say it wont happen again? Thats not your problem btw. But I can see why the broker is trying to avoid having to make a second application... We charge, we would make the second application no problem. 

However, you have to consider that a new application COULD affect your current mortgage offer - another credit check for example. 

Thanks, on your final point - we have good credit scores. If the lender who has already did a further credit check before completion, surely any further hard searches wouldn’t stop them from proceeding? Surely at worst they’d ask what they are and I’d explain I was shopping around for the best rate?

ACG

atlasmm said:

ACG said:

There are 2 potential reasons for this:
1) The brokers compliance process is to only allow one application at a time. There are reasons why they may do this, but its not like a regulatory requirement. 
2) The broker is being lazy and just doesnt want to go through the process of making 2 applications. If you have gone down the route of fee free, the broker is basically in a position now where they have done a load of work and now wont be getting paid on it. They are going to have to do the work again and who is to say it wont happen again? Thats not your problem btw. But I can see why the broker is trying to avoid having to make a second application... We charge, we would make the second application no problem. 

However, you have to consider that a new application COULD affect your current mortgage offer - another credit check for example. 

Thanks, on your final point - we have good credit scores. If the lender who has already did a further credit check before completion, surely any further hard searches wouldn’t stop them from proceeding? Surely at worst they’d ask what they are and I’d explain I was shopping around for the best rate?

Lenders dont use your credit score, they score you based on their own algorithm and they all differ. 

Its always a risk. If you decide to do it, you do it knowing worst case scenario what could happen. From what you have said, I think you will be ok. But nobody can guarantee it. 

housebuyer143

But, technically you are allowed two mortgage offers at once. You can only redeem one of them, so it doesn't matter if you have 2 valid offers at the same time. 

ACG

You can have 100.