Q. My mortgage application has been submitted, but my broker is now saying the rate has changed and the expected monthly payments have suddenly increased by £20. How can this have happened?
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A. The first thing I would say is that this is probably not the fault of your broker, who would have checked the rates prevailing at the time he was advising you.
What has almost certainly happened here, however, is that at some point between your broker checking the details of your chosen mortgage deal and your application actually being submitted, the lender has increased their rates. Needless to say, this is something they can do at any time - without necessarily giving any notice. And there is no way of getting round it, since the rate you start paying is only secured once the application has been received and the appropriate fees paid.
What to do? Well, you can always go back to square one and ask your broker to advise you about any suitable alternatives. In this regard, brokers of the “whole-market” variety are much more likely to be able to help you than those that are tied to particular lenders, since the latter will only be able to offer you a strictly limited choice of instruments.
Of course - assuming your broker (whole-market or not) did his research properly in the first place – then your original deal should have been the best one available at the time. That’s not to say, however, that a better one hasn’t come onto the market in the meantime. After all, in just the same way as lenders can change rates at the drop of a hat, they are also continually reinventing or tweaking their product ranges. So, it might well pay you to take another look at what’s on offer.
The alternative is simply to stick with the deal that’s already on the table – albeit at a somewhat higher rate than you originally expected to have to pay. And on balance, that is probably what I would recommend – not least because it means you don’t have to go through the application process all over again. Besides, even in these straightened times, an extra £20 a month shouldn’t cause you too much difficulty - unless you were stretching yourself dangerously close to your limit in the first place, that is!