When the mortgage deal that you are on initially finally reaches the point of confusion, your mortgage lender may wish to offer you a new deal for you to accept, ensuring that you stay with them. This kind of deal is known as a product transfer.
Although it would be nice, you will not be rewarded by a mortgage lender for your loyalty. The offer that they make you may not be competitive with the kinds of deals you could have access to elsewhere.
What also tends to be an annoyance for customers, is that the mortgage rates for these product transfers are not as good as the types of rates they would be offering their new customers. Great for a first time buyer, but not so much for an existing homeowner.
It may look like a fairly simple, straightforward process to just swap onto your current lender’s new deal, but please always bear in mind that it will be in your interest to at least have a look at what other deals you may be eligible for.
You might find that your lender tries to sway you onto their deal, without providing any mortgage advice.
This can be a really risky process, because if you go into their new deal without advice, you are essentially saying goodbye to all the valuable consumer protection you would otherwise have benefitted from by speaking to a remortgage advisor in York.
Over the years we have seen numerous examples of customers just agreeing to go onto these “follow-on” deals and locking themselves into a deal that is not appropriate for their circumstances.
The kicker here is that because they agreed to move onto the deal without taking any mortgage advice, they have waived a lot of their rights in terms of making a complaint about the lender or the deal.
We once had a mortgage case where a customer who was pregnant opted to take this route and was declined for a small further advance to fund some necessary home improvements a couple of months down the line.
She was then left with having to pay quite a large early repayment charge to swap from her existing lender onto a new one who was willing to lend her the necessary funds to accomplish her home improvement goals.
After we have taken a look at your case, if we think a product transfer is the most suitable deal for you we will recommend that as a course of action for you. If we don’t think so, then we’ll look at where to go next.
When we arrange the mortgage for you as a mortgage broker in York, then all the regulations and consumer protection will apply to you.
In short, even if the mortgage process seems pretty quick and straightforward, we will still always recommend that you seek expert mortgage advice. A second opinion costs nothing and making a mistake when taking a new product can be something that ends up costing more than you thought it would.
If you are looking to remortgage in York, you’ll find that the mortgage market is highly competitive and savings can typically be made by a dedicated mortgage advisor scanning the market for a new and more favourable mortgage deal.
Date Last Edited: December 19, 2023