My wife and I want to buy a house and we have a mortgage offer from a lender since 4 month ago, that we didn't accept yet due to sellers taking longer than expected to sort things out. Since they gave us the offer, interest rates have gone down considerably. Can we re-apply for a new offer with the same lender or pick another one ? Or should we wait for the offer to expire ? What are the implications of doing this ?
From personal experience, yes.
Earlier this year I applied for a mortgage with a UK bank (Nat-West). As first we were declined, but were then approved having increased our downpayment. Before accepting the mortgage, I noticed that the promotional fixed rate we'd been given was based upon our old downpayment. The bank were unable to transfer me onto the "correct" mortgage product for our revised downpayment, so I was advised to make a new application instead.
I had to (re-)submit much of the initial paperwork for the new application, but I made a note for the underwriters to cross-reference things with the old application. The only significant complication I had was that I couldn't start a new online application with the same online account: I had to create a new account with an alternative email address.
In the meantime, I gave our solicitors instructions not to draw down the old mortgage offer. Within a week or two, the new application was approved, and we proceeded to purchase the house with the revised mortgage offer.
Our mortgage arrangement fee was only payable on drawing down the money, so we weren't charged for the first application. There may have been some minor fees related to ID/background checks that we had to do a second time, but they were on the order of tens of pounds. The bank's first valuation of the property was still good enough for them, so we didn't pay double on that, either. I seem to recall the valuation had a lifespan of six months, so on that basis it may be better to apply for a revised mortgage sooner rather than later.