Good afternoon everyone. I hope someone can help with this as it is causing a bit of anxiety in our family at the moment.
Some of you may remember from an earlier thread that our daughter received a mortgage offer last autumn at 4.29% on a five year fix through Nationwide. She had an offer accepted on a two bedroom flat in Ashford but the purchase fell through in January when the seller pulled out. She has now found another property, a similar flat in the same area, and had her offer accepted last week.
The problem is that her existing mortgage offer expires on 19 March. The broker has said she can either ask Nationwide to extend the offer (which they apparently do for up to three months in some cases) or she can reapply, but a new application would be at whatever rate is available at the time. I have been reading that rates have been edging up slightly in February and the Bank of England holding at 3.75% with a closer vote than expected does not seem to have helped.
My question is really whether it is worth trying to extend the existing offer at 4.29% rather than risk a new application at a potentially higher rate. The broker seems to think an extension is possible but not guaranteed. Our daughter is a first time buyer with a 15% deposit (we are gifting part of it as discussed in my earlier thread) and her income has not changed.
I would be very grateful for any advice or experience on this. Has anyone had a mortgage offer extended by Nationwide or another lender recently? Is the process straightforward or does it involve a full reassessment?
Many thanks in advance.
@Sparrow_Kent2, Nationwide do extend offers but in my experience it is not automatic and it depends on the product still being available. If the 4.29% fix has been pulled from sale since autumn, they may offer an extension but at the current equivalent rate, which rather defeats the purpose. Your daughter’s broker should be chasing this on Monday morning as a matter of urgency given the 19 March deadline is less than three weeks away.
One thing I would push back on slightly is the idea that rates are moving dramatically. The Moneyfacts averages have ticked up a fraction but the best deals are still comfortably under 4.5% for a five year fix at 85% LTV. The difference between 4.29% and, say, 4.45% on a flat in Ashford is probably twenty quid a month. Worth trying to keep the lower rate, obviously, but not worth losing sleep over if the extension does not come through.
Good afternoon @greenwhistle_hants, and thank you for that helpful reply. I rang Nationwide first thing on Friday morning (before your reply came in, as it happened) and managed to speak to someone in their mortgage department after about twenty minutes on hold. The news is mixed. They confirmed that the 4.29% five year fix our daughter’s offer is based on is still available as a product, which is apparently the main thing that matters when requesting an extension. However, they said the extension is not automatic and that they would need to re-run affordability checks because more than three months have passed since the original application. Our daughter’s circumstances have not changed at all, same job, same salary, no new debts, so we are hoping this is just a formality.
The person on the phone said it would take five to seven working days to process the extension request once submitted, and that the current offer expires on 19 March. So in theory if she submits the paperwork this week there should be time, but it does feel uncomfortably tight given how slowly everything else has moved.
The reason for the delay, for anyone following, is that the seller’s solicitor has been extraordinarily slow in responding to enquiries. Our daughter’s solicitor has chased three times and each response takes a week or more. The chain above is apparently just one link, a couple upsizing, so it should not be this complicated.
My question is whether it would be worth getting a broker involved at this stage, just as a safety net in case the extension is refused or the product is pulled before it goes through. We did not use a broker originally as Nationwide was offering the best rate directly. But if there is a chance the extension falls through, I wonder whether having a broker lined up with a Plan B would give us some peace of mind. Or would applying elsewhere risk complicating things further? Many thanks as always for any guidance.
I wanted to come back to this thread with another update, as things have moved on since last week and not in the direction we were hoping for.
As I mentioned previously, Nationwide agreed to extend our daughter’s 4.29% offer through to the end of March. She has been trying to push the vendor’s solicitor along but it has been painfully slow, with long gaps between responses and no clear explanation for the delays. The chain above her vendor appears to be the main bottleneck but we cannot get a straight answer from anyone about what exactly is holding things up.
Having seen @CGT_Watcher’s thread about average rates climbing by roughly 0.4% in March alone, we are now genuinely worried about what happens if exchange does not happen before the end of this month. If the offer expires and she has to reapply, she will almost certainly be looking at something closer to 4.7% or higher based on current pricing, which adds a meaningful amount to the monthly payments on a property at this level.
My question is whether anyone knows if Nationwide will consider a second extension in these circumstances. The first extension was granted without too much difficulty, but I imagine there must be a limit to how many times they will agree to it. Our daughter’s broker has said he will ask, but he did not sound particularly optimistic. If anyone has been through a similar situation with Nationwide or another lender, I would be very grateful to hear how it played out.
Many thanks as always for the advice on here. It has been invaluable.
I am afraid I have another update on this thread, and it is not good news. Nationwide have now formally confirmed that they will not extend my daughter’s mortgage offer beyond the 31 March expiry date. The letter arrived on Friday and simply states that she would need to submit a new application if she still wishes to proceed, which of course would be assessed at current rates.
The original offer was at 4.29% on a five year fix. I have been looking at what is currently available and the equivalent Nationwide product, if it is even still on the shelf, appears to be around 4.84%. Her broker has suggested there may be slightly better options with other lenders but nothing close to 4.29%. I saw the news about 1,500 mortgage products being withdrawn over the past couple of weeks, which hardly fills one with confidence about the direction of travel.
The property she is buying is a leasehold flat, and the chain below her has been painfully slow. The vendor’s solicitor has still not provided the full leasehold management pack, which is what caused the delay in the first place. It is enormously frustrating to think that this could have completed weeks ago if that information had been provided promptly.
I suppose my question now is whether it makes sense for her to reapply immediately and accept a higher rate, or whether there is any realistic prospect of rates coming back down in the next few months. The Oxford Economics forecast that @CGT_Watcher posted suggests no cut before June at the earliest, and even then it is not guaranteed. I would be grateful for any thoughts. Thank you.
I wanted to update this thread again for anyone in a similar position. Following Nationwide’s refusal to extend the offer, we spent last week speaking to a whole-of-market broker recommended by a friend of my daughter. The broker has been very helpful and has identified two possible lenders who may be suitable, though both are quoting rates noticeably higher than what Nationwide offered back in January.
The broker explained that swap rates have moved up quite sharply over the past few weeks and that several lenders have repriced their products accordingly. One of the options is a two year fix at 4.89% and the other is a five year fix at 5.12%, both with a 10% deposit. For comparison, Nationwide’s original offer was 4.41% on a five year fix, so the difference is significant. Over the term of the mortgage that works out to roughly an extra £85 per month on the five year product, which is not a trivial amount for a first-time buyer.
The vendor’s solicitor has been understanding so far but has made it clear they cannot wait indefinitely, so we are pressing ahead with the new application this week. The broker thinks we should have a formal offer within two to three weeks if the valuation comes back cleanly.
I must admit the timing of all this has been deeply frustrating. If the original chain had not collapsed, my daughter would have completed at the lower rate and none of this would have been necessary. I know these things happen, but it does feel as though the system punishes buyers who are simply unlucky. Thank you to everyone who has offered advice throughout this thread.
I wanted to post a further update for anyone following this saga. The new broker we instructed last week has come back with what he describes as the best available option given my daughter’s circumstances. It is a two year fix at 5.14% with a smaller building society I had not heard of before, which is quite a jump from the 4.59% she had with Nationwide before that offer lapsed.
The broker has been very honest and said he would not normally recommend rushing into a decision, but given the news this week about lenders pulling products he thinks we should submit the full application today rather than shopping around further. He mentioned that two of the other products he had been considering for her were withdrawn yesterday morning.
I have to say I am struggling with this. The monthly payment difference between 4.59% and 5.14% on a £192,000 mortgage is not trivial, and it feels wrong to lock in at a rate that is substantially higher than what we had only a few weeks ago. On the other hand, if rates continue to climb or more products disappear, waiting could make things worse.
My daughter is understandably frustrated. She did everything right, had her offer accepted, instructed a solicitor promptly, and the delay was entirely on the vendor’s side with the management pack. Now she is paying the price for someone else’s slow paperwork.
Has anyone else been caught out by these product withdrawals this week? I would be grateful for any views on whether locking in now is the sensible course or whether there is any realistic prospect of rates coming back down in the next month or two. Many thanks.
@Sparrow_Kent2, lock it in. Nobody saw 1,500 products disappearing in a fortnight and nobody knows what next week looks like either. Half a percent is painful but not having a mortgage at all is worse. The smaller building societies can be surprisingly good once you’re past the name recognition thing. Get the app in today.
Thank you, Doris, for the nudge. I am pleased to say we have taken your advice and my daughter has now formally applied for the replacement product her new broker found. It is a five year fix at 5.14%, which is noticeably higher than the 4.68% she had originally been offered by Nationwide, but as several people here have pointed out, the alternative of waiting and hoping for something better feels increasingly risky given what has happened to the market this month.
The broker has said he expects the lender to turn it around within about ten working days, which would take us to roughly the first week of April. The vendor’s solicitor has apparently been chasing for an exchange date so there is some pressure from that side too. My daughter is understandably nervous that yet another product could be pulled before the application completes, but the broker has reassured her that once the full application is submitted and accepted, the rate is locked.
I have to say, the difference in cost over the five year term is not insignificant. On a £198,000 mortgage the higher rate adds roughly £45 per month, which over five years is over £2,700. Not the end of the world, but it stings when she was so close to securing the lower rate.
We are just hoping now that the valuation goes through without issues and that nothing else falls over. I will update again once we hear back. Thank you all for the support through what has been a very stressful few weeks.