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Remortgage & Product Transfer Mortgage Advice

Independent Remortgage Advice Getting Started

If your current mortgage deal has entered the lender's variable rate, is about to in a few months or if you think your existing deal is uncompetitive then it’s time to consider a product transfer or Remortgage.

There are lots of different scenarios that might be considered a “re-mortgage”, and there are several different types of solutions that might be appropriate in all of them.

For this reason, to get real value from your mortgage you should get a full picture of your options and what the real cost differences involved are.

There are also other aspects to consider like the time and effort you would need to commit to each and how much that time is worth to you. The timeframe between applying and completing will affect your choice, and other factors like your longer-term intentions will all be important in choosing the right solution.

You might be surprised to find out that we can offer remortgage deals from the majority of lenders in the UK as well as also performing product transfers for them and typically still do this on a fee-free basis for our clients.

So, you’ll benefit from speaking to a whole of market adviser like us about the many solutions out there.

What is a re-mortgage, a product transfer or a further advance?

Remortgage explained – What is a Remortgage? – This is when you switch to a new mortgage with a different lender, which will involve a full new application. It is common though for aspects like survey and legal work to be free of charge and hence this route can be cheaper than staying with the same lender, often significantly. Don’t expect to have to pay all the same fees as when you bought the property.

You’ll need to consider Remortgage options if your current deal has ended, is about to, or if you feel it is not competitive or if you plan to raise money from the home.

A remortgage could also be applicable where you want to raise money against a property you own already that is not mortgaged. Many lenders will offer remortgage deals in this instance, again often meaning free legal work and surveys.

Product transfer or Remortgage with the same lender – This is a change of product with the same lender. It can be much quicker and simpler to do this as keeping the same term and borrowing amount will mean income and outgoings are not usually assessed by the lender again.

Further advance or additional borrowing – An additional loan taken from your current lender where you need to raise further funds. This would normally only be appropriate if it does not make sense to replace your current product either due to it being very competitive versus new deals or having significant repayment penalties.

If you are raising money from the home a further advance needs to be compared in costs to both a full Remortgage to a new lender, or a second charge or secured loan.

What solution will be best for you

There are a lot of important factors in the correct choice of finance whether it’s just switching to a new deal, or changing aspects like the loan amount, term or repayment type.

The following questions are pivotal in the decision-making process.

What are your long-term intentions for the property?

Any likelihood of wanting to sell the property or raise finance from it for other things like extensions, the purchase of other property or a wedding, for example, will be important considerations affecting the type of product chosen and when to carry out the transaction.

Selling the property soon may warrant opting for a deal with no redemption penalties, and this may also be relevant where there is a desire to raise significant levels of additional borrowing.

A longer-term intention to sell or raise extra capital might be important in choosing between long and short term products such as 2 or 5-year options.

When raising additional funds the question of whether to do this immediately or through a further advance or another remortgage later will depend on the current loan to value, the difference between likely deals available for further advances and whether these are more costly than raising the capital immediately.

Is it a switch on like for like terms?

In almost all cases nowadays if you are changing the balance, term, or repayment type of a mortgage it will result in what is equivalent to a full new application, although you might only have an electronic survey.

This is very important as the main advantage of transferring a new deal with the current lender is a simple faster process. This benefit is usually lost as soon as any of these items is amended during the process.

When switching like for like you might decide to overlook small financial gains from changing lender where you feel they are not worth the extra hassle involved but this is less relevant when you start to change facets of the borrowing.

What is the property's valuation?

In a product transfer, the lender usually uses an electronic estimate of property value based on the original purchase price or time you applied to them. If the value has changed significantly especially where this is due to works to the property or if you managed to buy the property at a genuine bargain price, you may get a benefit in switching lender to get a new assessment of the property value from a mortgage surveyor based on the current market.

Is the current deal inside early repayment penalty periods?

If you are raising capital or feel your current deal is uncompetitive it will be important to consider any repayment penalties on the current mortgage. If significant they mean that second charge/secured loans and further advances are better options financially than a Remortgage to a new lender, or conversely depending on the sums being borrowed it might be better to pay a redemption penalty to start a new deal entirely.

If you feel the current product is uncompetitive a true analysis of costs needs to be made including factoring in differences in borrowing amounts where any redemption penalties are being added to the new loan amount.

In other words, if you add have to add a penalty onto the loan to pay it, a new deal that appears cheaper might be massively more expensive due to the long term cost implications.

What is the true long-term cost?

You also need to make sure that any cost comparison you make is technically accurate as many comparison sites and other sources of consumer information may use woefully misleading systems of comparison.

For example, many comparison sites use the long-term cost of a mortgage over the whole term entered (i.e. 25 years for example) even though the deals being compared might be 5-year fixed rates.

There is no real reason why this cost analysis would make sense. You would be massively disadvantaging yourself if you didn’t shop around for the remaining 20 years and the variable rates that you revert to after a fixed deal are not generally linked to any indices, meaning lenders can change them as they see fit, so you would be basing your choice on a completely outmoded assumption of costs.

Similarly, some comparison sites might ignore various fees as part of the comparison (i.e. just putting the lowest rate first) and others fail to take into account the final balance (the lower rate, the larger the proportion of each payment coming off the capital, even though it is already a lower payment).

Our Mortgage Advice service for remortgages and product transfers

As you can see there is a lot to consider when it comes to choosing the right course of action when it is time to Remortgage.

Using a broker like ourselves can help you find the right choices from a marketplace with a huge number of lenders to be considered and make sure you get the right solution for you in terms of cost, simplicity, and time and effort involved and we will take care of the whole application process for you through to mortgage offer.

We don’t usually charge a fee for Remortgage applications and will work just from the commission paid by the lender. Our £299 advice fee is usually only payable on a purchase application.

We can work with you completely over the phone and internet, including evening calls and out of hours to fit around your work schedule and we can help make the process fast, fluid and low stress.

No time spent holding on the line for call centres or waiting weeks for an appointment to speak to an adviser. You will have a single point of contact and only ever a qualified advisor.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT. WE TYPICALLY CHARGE AN ADVICE FEE OF £299 PAID UPON FULL MORTGAGE OFFER. SOME BUY TO LET AND COMMERCIAL LOANS ARE NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY
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