Rates are on a downward trend at the moment, and a very common question we get every time theres a Bank of England rate reduction is “will my mortgage rate come down”. The answer to that question is usually yes, but the link is not as direct as people assume. This article explains the mechanics of that a little better so i wont go into it here.
What we tend to recommed to clients is that despite rates being likely to reduce, not to wait on a mortgage or remortgage, but to secure something early, give yourself plenty of time and then if rates do come down, we can always requests a revised offer on a new reduced rate. The ratrionalle being that we cannot go back and secure a rate thats been pulled once its gone. Summarising that previous blog post, lender base their rates on what they think the BoE and the wider economy will do when they set rates. That means that if they assume there will be a reduction that then doesent happen they actually increase their rates. We saw that in January this year when a widely expected reduction was held by a slim margin and mortgage rates increased!
What is becoming apparent is that Solicitors dont appreciate the extra work involved in having to administer those revised offers. We noticed recently that one of the more popular solicitor firms that we work with included a new clause in their terms where they will allow one free offer revision and will then impose a £100 fee for every subsequent revision…
Whilst they have every right to set fee’s accordingly, we dont believe in charging such a fee, its part of the process of ensuring customers benefit from the best outcome and frankly its not a great deal of work. I dont believe its a great deal of work on the part of the solicitors either since the work they do is related to the legal aspects of the property title, the borrower and confirming a raft of other conditions on behalf of the lender, none of which is changed by the actual mortgage rate.
So let this serve as a Public Service Announcement to check your solicitors terms, and perhaps avoid those that start to impose these fee’s. We will certainly not be recommending solicitors to clients who leverage those fee’s, however it can be difficult to assertain because the terms are not always made available until we instruct.
