Mortgage options changing fast, what to do

[IucyB]

After being in rented for a long time (fled DV) I am finally in a position to buy a small flat (before I get too old for a mortgage, I'm a first time buyer). I have had my offer accepted and am now sorting out mortgage. Of course with the turmoil in the markets (due to the horrific war going on. I know that I am privileged to be even buying somewhere to live) this is not a great time to look for a mortgage. Some of the mortgage products I was considering have been withdrawn from the market.

I wonder what everyone else is doing - waiting to see if things get any better, getting a mortgage now in case things get worse etc. Any thoughts on what is going to happen in the mortgage market if the war continues or ends soon. I am sure there are much better informed people on here than me.

Well you can’t really wait too long since you have had an offer accepted - I don’t think they are going to change too much in the short to medium term so best get one locked in now on a 2 or 5 year - I would expect inflation will rise as a fallout of increased fuel prices so the sooner to you get a mortgage agreed on principle the better

Yeah we are sort of in the same boat with finally being able to look to get on the property ladder. Just got through last week the 2nd and final installment of some very generous inheritance from a deceased aunt after 18 months waiting to sell her property and 12 months of probate to now find the market all up in the air due to this stupid war. So frustrating.

I had a mortgage in principle in place when my offer was accepted, the original mortgage product I'd planned on was withdrawn from the market and now I have some options with higher interest. The sellers have not yet made an offer on a property.

The only positive is perhaps property prices will fall with the higher interest rates. Not sure.

Good luck @Heyhelga do you have somewhere in mind to buy?

No only now at the stage of understanding what our budget is as we were awaiting to see what the final inheritance figure was going to be.

What are you going to do? Go with the more expensive mortgage products or perhaps hold off waiting for this war to end?

I'd wait until your sellers have found somewhere to buy and then look at what options are available but I'd go for a 2-5year fixed, lowest rate you can get.

I'm in a quandary as I can't wait around too long, will try to hold off until I know what the sellers are doing.

You can lock rate now and change product later if rates drop.
Imho it will rise for next months.
Speak to mortgage advisor.

They'll expect you to get on with arrangements for the survey etc, if you hang around you'll look a bit flaky

I’m holding off - property prices will keep going down. The market generally is terrible, I can’t see property prices increasing in the years up to the peak in 2022. It’s a waiting game.

Why are you in a hurry? You can always get a retirement mortgage, also some lenders allow you to have the mortgage to 70.

yes I am speaking to broker again today as it was only Friday that my offer was accepted and when I spoke to broker yesterday the mortgage I had planned to get had been withdrawn from the market. I have solicitor etc lined up. Hopefully the sellers aren't being affected by all this either.
Interesting that I can seek a different mortgage if the rate drops - would I have to pay an exit fee from an agreed mortgage if I haven't completed the sale yet? Sorry if this is a basic question.

@topcat2026 thanks that's food for thought

No, exit fees kick in when the bank hands the money over to the seller. Before then, you can chop and change as much as you want (bearing in mind the impact of hard search on your credit rating). I've just pulled out of a property while already starting the process on another purchase so up until last week I had two mortgage offers active.

thank you, good to know. Good luck with your purchase.

Yes that is certainly a potential positive, sales and demand have been falling for a long time though before the war, the average historical interest rate is around 5% anyway I think, we are really just returning to normal.

Not me but my DS has just quickly locked into a two year fixed.

The problem with diving in too quickly is that you could end up with a lot more debt than you need to, at uncertain future interest rates, you could fix for ten years but many people are wary of this because they are so conditioned to rates being low or being cut in response to an "emergency", the problem with this emergency though is that rates may need to go up!

yes, so much volatility in the whole situation @KeepPumping

@Pickledonion1999 may I ask if you know which mortgage provider your son went with?

I suggest you work with a broker who offers rate check. I went through L&C and they can review the rates closer to completion to make sure you are still on the best available deal. If rates do fall in the coming months, they can arrange a new offer with the same lender or re-apply with a different one.

I am buying a new build and have a rate locked in 2wks ago, and if it drops, I can re-do it for lower rate, but if it rises, I keep lower rate. I only fixed for 2yrs, wish i’d done 3 now, but it might push me to apply for some promotions in next year or so if rates rise.

This was before todays U.S inflation figures and strikes on oil infrastructure in the ME. The predictions for today"s inflation numbers were WAY out, possible rate rise from the U.S today?

www.msn.com/en-au/money/news/final-sub-4-mortgage-rates-are-about-to-vanish-as-nationwide-hikes-home-loan-prices-again/ar-AA1YL5cV

The UK Ten Year just hit the highest level since 2008 according to Bloomberg, that is massive news.

The Ten Year what @KeepPumping?

The government won't let house prices plumet, too many people will be in negative equity and there would be a shit show. They might drop a tiny bit, they may stay flat, but the interest rates will plummet and there will be a stamp duty holiday if the cost of a house looks like it is falling too fast.

If you can afford a product get it booked in, if the mortgage company says x months to complete then tell your vendor that you have an affordable mortgage if you can complete by that point, if not you will need to review.