mortgage broker

Why It’s Better to Walk Away

It might seem counterintuitive as a mortgage broker who makes her living from working with and helping people with their mortgage applications to buy and remortgage their home, that I am advising you that it’s better to walk away…. sometimes. 

But with my other expert hat on as a UK Financial Coach, I’ve witnessed and had to help in the clear up the mess when someone hasn’t been able to walk away!

It’s fair to say that the mortgage market is still buoyant, even a week after the stamp duty holiday has finished! I’d describe it as buoyant, not frantic any more! 

UK house prices increased by 10.2% in the year to March 2021, up from 9.2% in February 2021. Source: UK House Price Index for March 2021

The Halifax also reported a 1.3% rise in the cost of an average UK home in May and a 9.5% increase since May 2020! 

What has this meant to buyer behaviours?

It’s a war zone out there – moving is stressful, match this with a global pandemic, the fear of missing out and a looming deadline has meant it has brought out the worst in some people.

  • People are buying frantically and behaving irrationally. 
  • Buyers are getting into bidding wars, are emotionally charged and the word gazumping – which we haven’t heard used much since the 1980s is back! 
  • Houses are being sold at significant inflated prices. 
  • Chains are breaking down because the properties are not being valued at the selling prices.

What does this mean for you and your Mortgage Broker?

Well, this is where the problems are arising…..

Here’s a real life case study that a colleague experienced:

House was put on the market for £240,000.

There were 30 viewings in the first 24 hours.

This resulted in 10 offers!

The winning offer of £268,000 was accepted – twenty six thousand pounds over the asking price!

Fast forward 6- 8 weeks – the valuation was completed and the valuer valued the property at £240,000. 

The lender used the valuation for mortgage purposes and the buyer could not borrow enough to finalise the purchase. 

The result? The buyers had to pull out. Their chain collapsed. Because the sellers lost their first buyer, and had to go back to the others who had offered and start the negotiation process all over again, and the clock was ticking. All in all a totally stressful situation for everyone which was completely avoidable.  

5 Recommendations from a Seasoned Mortgage Broker

Here’s five lessons learned and five recommendations for you to avoid emotional distress and financial waste:

  1. Don’t ever get into a bidding war
  2. Know what your budget is and stick to it.
  3. Don’t pay more than you can afford 
  4. Do not base important financial decisions on fear – specifically the fear of missing out (FOMO). Property purchases FOMO will cost you dearly – both financially and emotionally, as moving house is an extremely stressful process. 
  5. Be prepared to walk away. 

Your house purchase is likely to be your biggest financial purchase, so make sure it’s the right one. 

Don’t make a permanent decision based on temporary emotions.

So if you’re thinking of moving and want to make the most of this “mini boom” and act fast, work the numbers and please get in touch and I’ll talk you through how I can best support you to achieve your goal. I work as a mortgage broker and qualified financial coach – so I am expertly positioned to help you achieve your financial and mortgage goals. 

Call me on 07969 859749 or email chat@rachelrowley.co.uk and let’s chat! Here’s my mortgage website – Five Valley Mortgages

Rachel x

** Think carefully about securing a mortgage against your home. Your home may be repossessed if you fail to keep up with the mortgage payments