So, your current mortgage fixed rate is coming to an end, and you’ve had either a phone call from your adviser or a letter from your bank telling you this. So what next? Why does it matter, and what can you do about it?
Well, you ultimately have two options. The first is to stay with your current lender and simply choose a new fixed or variable rate product from them. This is called a Product Transfer (or a PT if you want to use cool mortgage adviser jargon!).
Your second option is to do a full remortgage and move your loan to a whole new lender.
So what’s the difference, and why would we recommend one over the other?
Well, a simple Product Transfer might be appealing because of the two options available, it’s most definitely the simplest. Your lender already knows you and doesn’t have to do any underwriting. Changing your product usually requires signing some new paperwork and agreeing to the new payment, but on the whole it’s very straight forward. In some cases, we highly recommend doing a Product Transfer, particularly when time is of the essence. If you’ve left dealing with your mortgage to the last minute then a Product Transfer can often be arranged the same day. In some cases, your circumstances may have changed in such a way that being approved for a new mortgage might not be that easy or would result in going to a new and more expensive lender.
An example of this is a customer we had who was with a mainstream lender but since taking out his mortgage had received a CCJ from a car parking ticket. Although it didn’t seem like a big issue at the time, if we moved him to a new lender, they may have had to take an interest rate that was more than double what he was paying now. We arranged a new product with his existing lender – even at a lower rate than they offered to him directly which saved him money every month.
A remortgage however may also be more suitable. It’s common that moving to a new lender will save you even more money by taking advantage of interest rates that are put out to attract new customers. You may also want to do more with your remortgage, such as borrow more money to pay off other debts, or raise money to improve or extend your house.
Remortgaging is a more detailed process than a Product Transfer and requires providing the new lender with a higher level of detail, however our advisers will guide you through this very carefully, and using the latest technology we can have your documents verified quickly and easily.
Moving to a new lender can also include lots of free percs, such as free valuations and free conveyancing. Your adviser will match you to a new lender that suits your needs and your budget.