How do remortgage offers work?

CraggyRockFace

Currently on a 5yr fix mega low rate with HSBC which runs out end of August.

Unfortunately I cannot reserve a new rate with HSBC until 90 days before the end date, which is June.

Obviously I am very concerned that by June mortgage rates could be even higher. But I want to hedge my bets and have the option of re assessing closer to the time, just in case the Iran war is suddenly resolved.

So as mortgage offers last for 6 months, I applied for the cheapest 5yr fix I could found last week with Santander, which has been approved. But in order for this to be an official mortgage offer apparently I have to pay the £999 fee? Which obviously I don't want to do yet. However when I rang them, they said I could add the fee onto the mortgage and that would be enough to reserve it. (They also said that if I took the mortgage I could pay the fee within 3 weeks of completion and it would be taken off the mortgage balance with no extra interest to pay.)

But what happens if I decide not to take up the Santander mortgage offer in a few months time? Will I be liable for the fee?

When I read the advice about "locking in" a mortgage offer 6 months in advance, I assumed I wouldn't be tied in?

Many thanks

flaneurs_lobster

When I read the advice about "locking in" a mortgage offer 6 months in advance, I assumed I wouldn't be tied in?

Interesting semantic difference between "locked in" and "tied in" - why does one not mean the other?

Where did you read this advice? On MSE here?

https://www.moneysavingexpert.com/mortgages/getting-ready-remortgage/

That fee is almost certainly not refundable but you will need to confirm with Santander.

CraggyRockFace

Yes I did read it on here, but reading it again I think I've answered my own question. I will check with Santander - but if I've added the fee to the balance of the mortgage instead of paying it up front, and decide to not take up the mortgage offer, will Santander then be able to chase me for the fee that I haven't actually paid?

https://www.moneysavingexpert.com/mortgages/getting-ready-remortgage/#need-1

flaneurs_lobster

https://forums.moneysavingexpert.com/discussion/comment/81935345#Comment_81935345

Don't pay that debt, get yourself into default, then see how many other lenders will give you a mortgage.

CraggyRockFace

Yes... I think I fundamentally misunderstood the process from the beginning.

amnblog

You can request to add the fee to the loan.

If you complete with Santander the fee will be added to the borrowing.

If you do not complete with Santander nothing will be added or charged.

CraggyRockFace

Turns out it's a bit of a moot point. In order to add the fee to the loan I would have had to officially "change my mortgage application", which would have meant losing the 4.08% rate I secured by applying a week ago, and accepting the recently increased rate of 4.58%!

I've just paid the £999 fee to secure the mortgage as it feels like rates are only going up at the moment!

@amnblog are you saying that if you secure a fixed rate remortgage deal for 6 months by paying nothing upfront and adding the fee to the mortgage, you can just dump that deal for a better one after 5 months and you won't owe anything? So when @flaneurs_lobster says "That fee is almost certainly not refundable" that is wrong?

flaneurs_lobster

So when @flaneurs_lobster says "That fee is almost certainly not refundable" that is wrong?

Be fair, I did continue that sentence "but you will need to confirm with Santander."

CraggyRockFace

I deal with mortgages applications so rarely I forget all the details, and I've never had to deal with one in such a rush before. Hopefully this will help me to remember for next time!