What to do if your mortgage deal is ending
With the UK economy and mortgage market in turmoil, we spoke with our trusted partner, Andrew Nolan Mortgages, to see what options are available if your current deal is about to end.
Right now there is little certainty about where the UK economy is going and the press isn’t really helping matters, with shocking headlines only explaining half of the story.
With this in mind, many people are rightly worried about their mortgage and in this article we’ll try to explain this a little better and offer some outline advice. Please note however, that everyones situation differs and the best course of action is to speak with an Independent Financial Advisor (IFA) who can look into your specific circumstances and offer more considered advice.
What is really happening?
Many are worried about mortgage offers being withdrawn. A lender can withdraw a mortgage offer at any time before a sale’s completion, although it is rare and usually reserved for cases where there has been a significant change in circumstances or a legal problem has arisen. The reality is most mainstream lenders will not withdraw mortgage offers.
Lenders have closed their doors to new mortgages however, while they change their systems, to limit risk in the background. Most lenders have either come back on or have confirmed they will return next week.
Rates are increasing at a rate many have not seen before, this is caused by the weak pound, inflation, and swap rates. Lenders credit score cards and affordability rules have already started to change, meaning you maybe in a situation where you can borrow less than you did a few months ago.
What can be done if you are worried or struggling?
We asked Andrew what action could be taken if you are worried, struggling or would like to try and reduce some risk.
We have many lenders who provide mortgages offers with a 6-month expiry. This means if you are close to 6 months of your current mortgage deal ending, you need to be speaking with an Independent Financial Advisor now.
If you are within 12 months of your current mortgage deal ending, we can look to obtain a mortgage offer now, meaning you don’t have to complete your re-mortgage for 6 months This will give you 6 months to “wait and see” on what is happening in the world, if things go as forecasted, we are able to carry out a cost benefit analysis on your mortgage offer at the 5 month mark, factoring in any early repayment charge and additional interest that you would pay from your current mortgage vs the mortgage deals at the time, In essence this is edging your risk.
If you are struggling with the monthly payments on a new mortgage deal that you are offered, we can look to extend your mortgage term, up until aged 80, providing you intend to work until this age. this could reduce your monthly mortgage payments significantly, depending what term your current mortgage is cover.
If you would like to speak with an IFA, call my office and book a free initial zoom meeting.
Note: Your home may be repossessed if you do not keep up repayments on your mortgage.
Andrew Nolan Cert SMP, CeMAP, Certs CII(MP & ER), Cert CII FS
0161 504 3704