Should I Remortgage with the Same Lender?
If your mortgage term is coming to an end you may receive an invitation to remortgage (known as a product switch) with your existing lender. But is this a good idea?
Our comprehensive guide outlines the pros and cons of remortgaging with the same lender. It explains what you should be doing when you are remortgaging and common mistakes to avoid. Let’s discover whether remortgaging with the same lender is a good idea.
- Advantages of Remortgaging with the Same Lender
- How Long Does it Take to Remortgage with the Same Lender?
- Do I Need a Solicitor to Remortgage with the Same Lender?
- Advantages of Remortgaging with a Different Lender
- Do I Need a Valuation when Remortgaging?
- Do I Need Conveyancing When Remortgaging?
- Discuss Your Remortgage with a Mortgage Broker in the First Instance
Advantages of Remortgaging with the Same Lender
There are a few advantages of remortgaging with the same lender. Typically:
- Your current lender will have your customer information
- They will know the property is mortgageable
A big factor financial institutions rely on is customer loyalty. If you have your banking and other financial arrangements with a lender, they often assume you will keep your mortgage with them.
In some cases this loyalty can be beneficial as some lenders offer products to existing customers that they don’t offer elsewhere. Your existing lender may also conduct what’s known as internal credit scoring, which may mean you can borrow more with them than elsewhere.
Finally, your current lender will have conducted all the property checks necessary for the mortgage when they arranged the loan for you. This can expedite the remortgage process and help you remortgage much faster than approaching a new lender.
How Long Does it Take to Remortgage with the Same Lender?
Remortgaging with the same lender, technically known as switching products, can be done almost instantly. In some cases, a remortgage can be arranged over the phone, and you could be on your next mortgage deal within hours.
Do I Need a Solicitor to Remortgage with the Same Lender?
No, you will forego the need for any conveyancing when remortgaging with the same lender. Once again this is because all the documentation correctly reflects the lender and there is no need for any material changes.
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Advantages of Remortgaging with a Different Lender
Despite the time saving factors mentioned above, in most cases it is best to shop around and see what rates other lenders are offering. A whole of market, fee-free broker, like Boon Brokers, is best suited to assist with this search.
In more cases than not, customer loyalty is detrimental to the customer and costs them more money than if they shopped around each time a deal expires. In shopping around, you may find your existing lender is still the cheapest for you. In which case, you get the benefit of knowing you are on the best deal going forward.
You may however find another lender offering a much better interest rate or more attractive mortgage deal. For example, if you are planning to move home in the next few years you may want to remortgage with a different lender to avoid an Early Repayment Charge (ERC).
Circumstances Change Over Time
This last point ties nicely into our next point. Your circumstances and needs will change over time. When you originally sourced your mortgage product, the lender you chose was the best for you at that time. You may have changed jobs, borrowed more money, had a pay rise, or had children since that point.
All of which could affect a mortgage application and you may find a better lender for your current circumstances.
Do I Need a Valuation when Remortgaging?
Yes, you will need a valuation. Most mortgage valuations are what’s known as drive by valuations or online valuations. These can be conducted in a short period of time and allow lenders to make decisions quickly when dealing with a remortgage application.
Occasionally you may need a full valuation where a lender sends someone to the property to inspect it and verify the details you have provided. This is more common with unusual builds or properties of non-standard construction.
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Do I Need Conveyancing When Remortgaging?
If you remortgage with a different lender, you will need conveyancing. This is to update the property deeds and in the case of physical deeds transfer them between lenders.
Normally remortgage conveyancing is straightforward, especially if you use the same conveyancers that you used before. It normally requires a quick check of the information held and updating Land Registry with the new lender’s details.
The reason the lender’s details are put onto the property deeds is to show they have a charge (legal interest) in the property.
You shouldn’t need to go through the time consuming checks you experienced with your original mortgage application as these should all be held on file.
In rare cases these checks may be required again if:
- The local authority boundary has changed for your area
- Different regulations or legislation has been brought in that affects your property
- Documentation is missing from the previous conveyancing that the new lender requires
Discuss Your Remortgage with a Mortgage Broker in the First Instance
Your lender should write to you at least 30 days before your current mortgage deal expires. Some lenders contact you months in advance of your deal expiring.
In this contact they will usually invite you to remortgage with them or outline reasons why you might not be able to remortgage with them. For example, if you have notified a lender about maternity leave or a job change this could prevent them offering you a remortgage.
Regardless, you should save this letter and approach a Whole of Market mortgage brokerage like Boon Brokers. They will be able to compare the mortgage deals on the market and address any concerns or questions you have about remortgaging.
Once they have compared the market, they will make a recommendation based on your circumstances. If you opt to change lender (or even stay with the same lender) a mortgage broker will take care of the application process for you and keep you updated until your new mortgage deal commences.
Boon Brokers have built bespoke systems to assist clients with remortgaging. You will receive an automated text, phone call and postal letter once it is time to review your remortgaging options. This is 6 months before your mortgage product’s expiry date. Your allocated adviser will then work on your case to ensure that the most suitable mortgage offer is issued before your product expires.
Most mortgage brokers will also review your insurance to check it covers you adequately and book you in for a future call when your new deal term ends. Boon Brokers is a Whole of Market Mortgage, Insurance and Equity Release Brokerage. Boon Brokers provides fee free advice.
Contact Boon Brokers to book your remortgage consultation today.