REMORTGAGES have been big news for months now, and no more so than at the beginning of last month when the Bank of England interest rate increased for the first time in nearly a decade, prompting many home owners to reconsider their current deals.
Prior to the interest rate announcement, many lenders released competitive rates in the hope of attracting new customers, and following the interest rate increase, the industry saw a surge in remortgage applications.
As June Deasy, Head of Mortgage Policy from industry body UK Finance explained: “Over the last year, the number of loans for remortgaging has been higher than in any period since 2009. We’d expect this trend to continue as customers take advantage of an increasingly competitive market and interest rates that still remain at historically low levels.”
But there is one crucial point that may have been lost in the stampede to secure a great rate. Do you actually need to go through the hassle of a remortgage, and all the paperwork that entails?
Well actually, in many cases, no you don’t. You could simply opt for a product transfer instead; a lesser-known process but one that can save you time, money and stress.
As Brian Murphy, Head of Lending for Mortgage Advice Bureau, whose remortgage Best Buys have been released today explains, “There is a lot of confusion by consumers though that a product transfer and a remortgage are one in the same thing, but they are in fact very different.
“Product transfers are very straightforward and quick to deal with.
“However, just because you’re considering staying with the same lender doesn’t automatically mean that it’s a product transfer.
“If you’re changing anything about the amount you’re borrowing or the way that you’re repaying the mortgage, for example going from interest only to a repayment mortgage, then this will be treated differently, so it does pay to get expert advice to understand what’s applicable and what you’ll have to do in terms of the necessary paperwork.”
