When your current mortgage deal comes to an end the options are often overwhelming. You could stay with your current mortgage lender and do a product transfer, or you could remortgage to a new lender. In this short article, I’m going to explain the pros and cons of both options.
So, option number one is to stay with your current lender and opt for a product transfer, this involves you switching from your current deal when it expires to a new existing borrower deal with the same lender. There are a number of key benefits to doing this, one of which is that the lender does not conduct any further affordability checks. So, if your income position has changed, reduced for example, this option may be beneficial for you.
Secondly, the lender will not conduct any credit checks. So likewise, if your credit position has changed, perhaps you’ve taken out more debt such as a bank loan, credit card, or car finance again, this one not be taken into consideration and could prove to be beneficial for you.
Thirdly, there will be no legal work involved, so subsequently there will be no legal costs. And finally, the underwriting is minimal, often this can be done online directly with the lender or via your mortgage broker and there is no need to supply supporting documents. Therefore, normally a product transfer can take place a lot sooner than every full remortgage could.
The second option is a remortgage to a new lender. A whole of market mortgage broker will have access to hundreds of lenders and thousands of products. Therefore, often there is more opportunity to get a lower interest rate and to reduce your monthly mortgage payments.
A remortgage application would however be subject to full underwriting which includes an affordability and credit check, but lenders acknowledge that it is often easier for you to stick with your current provider, so they will incentivise you by offering you a free valuation, free legal work and cashback offers as part remortgage deal.
My closing piece of advice is to always take your time when considering your options and if you are comparing a product transfer to a remortgage always look at the total cost of the product to make sure it is a true cost comparison. If you are unsure which option would be more suitable for you, I would recommend seeking advice from the professionals, like a whole of market mortgage broker.
