Changing mortgage amount after offer

CaptainWales

Hi, I'm after some advice as I'm not sure what the best thing for me to do in my situation is.

I have an offer accepted on a property and can fund the purchase without selling my current property. I will though be using a mortgage to fund the purchase. I will also be selling my current home but I don't have to do that i.e I am chain free.

I don't know whether its best for me to go through a formal and full mortgage application now so i've got this, as there is a chance that my current property will sell before I complete on the new property. If that happens, then the amount I'm looking to borrow on the mortgage will be drastically different i.e I won't need to borrow as much. I've heard substantial changes to mortgage applications would require a re-assessment and essentially another full application (no idea if I would then be subject to whatever rates the lenders offer at that stage).

Alternatively I could wait a few weeks to see how quickly I can sell my current home and then apply for the mortgage. Worried, that rates offered by the lenders may increase in that time though.

Any advice on this is appreciated and anything else that I may have forgot to take into consideration.

poseidon1

Macro economic factors ( middle east war, rising gilt yields) point to fixed mortgage rates hardening -

https://hoa.org.uk/advice/guides-for-homeowners/for-owners/mortgage-rate-forecast/

Probably makes sense to seek a mortgage now and lock into current rates, rather than wait a few weeks when the mortgage market may have worsen.

Bear in mind we are not far off the first Burnham budget, and if the financial markets do not like what his Chancellor has to say, the turmoil we have already witnessed in the UK gilts market could undoubtedly worsen to the further detriment of mortgages.

CaptainWales

Thanks poseidon1. I'm thinking of getting a tracker mortgage which allows me to do unlimited overpayments so I can clear as much of the mortgage off once my current home sells. Does that change your view on whether getting a mortgage now is preferable?

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82138864#Comment_82138864

Only in the sense your tracker might get more expensive if linked to Bank of England base rates and persistent inflation forces a base rate hike. Financial markets are forecasting a rate hike before the end of this year.

Also make sure your tracker has no early repayment penalties, some do.

CaptainWales

https://forums.moneysavingexpert.com/discussion/comment/82139004#Comment_82139004

If the tracker follows the BOE, i'll never be able to avoid a hike in the base rate right? So doesnt matter if i apply now or in a few weeks?

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82139048#Comment_82139048

That's certainly true for trackers.

The only other variable is the margin above base rate charged on the tracker which might widen slightly if the market worsens, as banks seek to protect their profit margins.