The Question
I purchased my home two years ago and my deal is due to expire in December. I wondered what happens next. I am aware it’s best to find a new deal but how should I start the process?
I would also like to know whether I need to get my property valued first and whether I’ll need a solicitor again to run through the legal side. Thanks for any help.
Darren’s Answer
As your deal is ending soon, you have two main options:
OPTION 1: Complete a ‘Product Transfer’ with your current lender
This is where your lender will have a suite of products (often known as ‘Switcher’ deals) that you can take advantage of. These will be variable, tracker and fixed rate options.
The benefit of this is that there is no application as such, simply a new deal applied to your mortgage. No additional documents or credit scoring would be required, and nor would there be a need for an affordability assessment as the lender already assumes the risk.
OR
OPTION 2: Remortgage to a new lender
This is a more in-depth process as it will require a full application, where you would need to provide documentation such as bank statements, payslips and ID. You may also incur legal or valuation fees, but a broker can source lenders who will cover this cost for you.
Although this can seem like a dauting process, a broker can guide you through this and ensure you receive the best deal. Often, staying with your current lender can be more seamless – but it might not be the cheapest deal out there.
Obtaining a valuation
Regarding a valuation, if you go with Option 1 (Product Transfer) then you would not need a valuation completed. Your current lender will use their own internal valuation of your property based on market activity in your area to ascertain whether the value has increased over the last two years.
If you proceed with Option 2, a new lender will almost always carry out a valuation. This can often be a positive if you have enhanced the property in the last two years.
Both options have their plus points, but these things can be difficult to navigate. Please speak to a whole of market mortgage broker who can provide the best rates for your circumstances.
Meet our expert…
Darren Polson is head of mortgage operations at Aberdein Considine. He has been writing a regular column for What Mortgage for over two years and is now here to answer YOUR questions.
If you have a question for Darren please email kate.saines@emap.com or leave a message in the comments below.
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