If you are coming to the end of the advantage period on your mortgage you will need to begin to look at your remortgage options, you should do this around 3 months before your interest rate changes. It is common practice to look at the whole market and this is the correct thing to do, you should look to see what interest rates are available with alternative lenders, but also did you know that you can potentially rate switch with your existing lender?
Rate switching is a much simpler process than remortgaging; this is because you stay with your existing lender and as they have previously assessed your circumstance including income and identification, often you do not need to provide any further proofs for this. If your situation has changed then this could be beneficial. Also with some lenders you are also able to switch to a new product a few months before the end of your advantage period, this could be a good ‘perk’ if you are switching to a lower interest rate, as this could save you money much quicker. As well as this there is no legal aspect as your existing lender’s interest remains on your property, this makes the process much quicker. An independent mortgage adviser can assist you with this process you do not need to contact your existing lender yourself as your intermediary can usually do this for you.
If the interest rates that your current lender is offering are not competitive against the rest of the mortgage market, then you should like at your remortgage options. It is imperative to remember that if you are opting to remortgage to a different lender, you will be credit checked by the new lender. If you have had any credit issues such as late or missed payments, CCJ’s, defaults etc. then it may be more difficult to obtain a new mortgage. People often believe that because you have not missed any mortgage payments that this should mean you should be able to easily obtain a mortgage; however mortgage lenders look at your whole credit profile not just your mortgage repayments.
If you want to assess your remortgage and rate switch options, you should contact an independent financial adviser who can access the majority of the market and obtain the best deal available to you, including rate switching.
Jenny Croskery Cert CII (MP)
19th November 2018