Avoiding the Dreaded Standard Variable Rate - Part 2
Two days ago I wrote about why it's important to keep track of your mortgages to avoid going on the lender's standard variable rate for long.
It should be noted that processing delays and admin problems at mortgage lenders are common and often result in buyers paying several months of unnecessary interest charges as they wait for their mortgage applications to go through.
Of course, the delay is longer if you are switching away from your current lender to a new one, rather than just re-mortgaging with the same one as I was doing.
My mortgage broker friends tell me that there can be particular problems when a smaller lender comes out with a really attractive rate - and is then inundated with applications and doesn’t have the administrative resources to handle the demand.
In fact brokers say this is becoming an ever more regular issue because what often happens is that lenders will have a small bundle of funds bought at a really attractive interest rate on the money market to offer out. Often this may be as little as £12m of funds which is often taken up by brokers in days and fully sold out.
Naturally, the lender goes to the top of the “Best Buy” charts but is swamped with a backlog which takes ages to process, thus leaving customers who are re-mortgaging stuck on less than attractive standard variable rates for months.
Copyright: David Lawrenson 2007
Back to main site: www.lettingfocus.com
Next post will be on Monday12th Feb
It should be noted that processing delays and admin problems at mortgage lenders are common and often result in buyers paying several months of unnecessary interest charges as they wait for their mortgage applications to go through.
Of course, the delay is longer if you are switching away from your current lender to a new one, rather than just re-mortgaging with the same one as I was doing.
My mortgage broker friends tell me that there can be particular problems when a smaller lender comes out with a really attractive rate - and is then inundated with applications and doesn’t have the administrative resources to handle the demand.
In fact brokers say this is becoming an ever more regular issue because what often happens is that lenders will have a small bundle of funds bought at a really attractive interest rate on the money market to offer out. Often this may be as little as £12m of funds which is often taken up by brokers in days and fully sold out.
Naturally, the lender goes to the top of the “Best Buy” charts but is swamped with a backlog which takes ages to process, thus leaving customers who are re-mortgaging stuck on less than attractive standard variable rates for months.
Copyright: David Lawrenson 2007
Back to main site: www.lettingfocus.com
Next post will be on Monday12th Feb
This entry was posted by lettingfocus, on
Wednesday, February 07, 2007.
