When you are heading towards the end of your initial fixed period of your mortgage, it would usually be time to start looking at your options for a remortgage. If you were to remortgage with the same lender, this would be called a product transfer.
This may be something that not too many people are familiar with, especially if you have been doing your own research ahead of your fixed period ending. The reality is though, that product transfers are arguably just as, if not more popular than a remortgage itself.
A remortgage is taking out a new mortgage with a new lender, to replace your previous mortgage. This tends to come with more favourable interest rates and lower monthly repayments. Doing this will require documentation to be submitted in order to qualify for that deal.
When you do a product transfer mortgage, you will be with the same lender. This means that, providing your circumstances haven’t changed, you generally won’t be required to submit any additional documentation. You will be able to choose a new deal that you qualify for and have it replace the previous one.
The main reasons why you might look to do a product transfer mortgage, are pretty appealing to homeowners. First of all, you may be able to save yourself quite a bit of money.
This is because there is no need for solicitors or a valuation, so those fees won’t be there. You also have the possibility of saving yourself from a redemption fee or early repayment charge (though arrangement fees might still be present).
It may also prove to save you a lot of time and allow for an easier service. Remortgages can often take a little while to put together, whereas because the lender already knows what you are like and probably won’t require any documentation, product transfers can often be a lot quicker to finalise.
Conversely to the aforementioned point, some people may instead opt for a remortgage. The reasons this is a popular choice, is because of the flexibility involved.
You will have access to more than just your current lender, with potentially better deals available elsewhere. If you manage to find a much better rate than you are currently on, this will save you money in the long run.
In addition to this, a product transfer only allows you to take out a new mortgage on the same term, whereas a remortgage can allow for new terms. Doing this could allow for your next remortgage process to go easier.
Another popular choice for people to look out for is to remortgage to release equity (the difference between what is owed and the value of the property), as a means of funding potential home improvements, putting down the deposit for another property, and more.
Releasing equity doesn’t quite work the same with product transfers, though you may be able to arrange something called a further advance mortgage. Get in touch with a mortgage specialist to learn more about further advance and product transfers.
Typically speaking, because you are staying in the same property, with the same lender, you will not need a solicitor for a product transfer.
Where this will be appropriate, is if you are making changes to your mortgage terms, such as removing or adding a name to your mortgage. At this point, you will likely need a conveyancer or solicitor.
Typically speaking, you will not need a credit check for a product transfer. This may potentially be different though for some lenders. The reason this is usually the case, is because the lender already knows they can trust you to pay back your mortgage.
Alternatively, if you have had credit problems during your current mortgage or are dealing with another lender to do something such as a remortgage to release equity, you may have another credit check taken out on you.
When doing a product transfer, something you may need to look at is whether or not you have any plans to move home in the future. Your current deal may not allow you to port your mortgage to a new home.
Taking out a remortgage instead, can allow for the flexibility to port your mortgage if you need to.
A member of our trusted remortgage advice team will be able to run through your case and take a look at what you’re looking to achieve.
Not only will we be able to get you through the process quickly and efficiently, but you’ll benefit from the various deals available to you, thanks to the vast panel of mortgage lenders we have.
Our service goes beyond this though, as we genuinely care about our customers. If you’re looking to product transfer and we believe it’s in your best interests to actually remortgage instead, we will say so. The same goes if you were looking to remortgage and we felt like you should product transfer instead.
We believe in full transparency and honesty with the customer – you should be put first. To discuss your product transfer options, or for further remortgage advice, book your free remortgage review and we will see how we are able to help.