Case study: Mortgage advice at the end of product life

The client

One of our long-standing clients approached us for mortgage advice as his product was ending. He was looking to take out a new 5-year fixed rate product.

Our solution: mortgage advice

We reviewed his options, and looked at suitable products from a number of lenders. The best option for him was to take an offer from his existing high street lender. Our client spoke to the lender, and was offered a competitive rate.

The challenge: changes in rates

A few weeks later we went to apply for this, to find the rate had increased. The client was happy to go ahead with this, but we could see no reason for the change. We therefore suggested he should wait whilst we did a little more digging.
On checking the numbers we found that his loan to value was just under the 80% mark. However on checking the rates we found the rate he was being offered was for loans over 80%. It was possible the lender had changed their recorded property value, but this seemed unlikely.

After much pondering we came up with a possible answer. As the lender charges daily interest, then this is added to the loan every day. This could mean that during the month then he could be pushed over the 80% threshold, and by waiting until his monthly payment was paid, then the original products would become available again. We therefore suggested waiting until the start of the next month, and then re-apply for the product change.

We did this, and were offered the original rate. By waiting a few days and working with us the client saved £1,525.80 over the next 5 years. Had the client gone direct to the lenders website and applied himself he could have ended up with the wrong product without realising.

To ensure you are taking advantage of the right mortgage product, why not call us for on 01543  410512 and make an appointment for a free mortgage advice consultation.