Most mortgage borrowers are pretty clued up on the initial terms of their loan. Well, at least they should be if their mortgage broker has explained things to them! Normally you would fix your mortgage for a period of 2 to 5 years and enjoy the rate and product you have chosen. However, many borrowers aren’t as clued up about what happens when your fixed rate ends! When your rate ends, you will fall onto the lender’s standard variable rate (SVR), which is often quite high. But don’t worry, there are options for you, to return to a more manageable rate. One such option that has gained considerable attention is the product transfer. But what exactly is a product transfer mortgage?
Product Transfer Mortgage Explained
A product transfer mortgage is a process where an existing mortgage borrower switches to a new mortgage product with the same lender, usually at the end of their current deal period. This allows homeowners to potentially benefit from more favourable interest rates or terms without the hassle of switching lenders, thereby simplifying the transition and saving on associated costs such as legal and valuation fees.
The Process Of A Product Transfer Mortgage
The product transfer process is relatively straightforward compared to remortgaging with a new lender. Here’s a step-by-step breakdown of how it works:
- Reviewing Current Mortgage Terms: As your current mortgage deal nears its end, your mortgage advisor should contact you to let you know, and to help you to explore a range of new products. Sometimes this could be with the same lender that you are currently with.
- Comparing New Product Options: This stage involves comparing the new mortgage products offered by your lender. Factors to consider include interest rates, fees, and the length of the new deal period. Your mortgage advisor will go through all of this with you.
- Affordability and Credit Checks: Although a product transfer often involves fewer checks than a full remortgage, lenders may still perform an affordability assessment and a credit check to ensure you can manage the new terms. Typically there are less checks because you are already a customer of the lender, and they know more about you.
- Acceptance of New Terms: Once you’ve selected a suitable product, your mortgage advisor will submit a product transfer request and you’ll accept the new terms. The lender will then process the transfer, often without the need for additional legal or property valuation procedures.
- Completion of Transfer: The new product terms are applied to your existing mortgage, and your payments are adjusted accordingly. Your mortgage advisor will follow the application process closely, making sure that everything transfers smoothly for you.
Mortgage Product Transfer Affordability Check
As mentioned before, product transfers aren’t usually as in-depth as regular mortgage or remortgage applications. However, there will still be some checks that need to take place. When undergoing a product transfer, lenders typically conduct an affordability check to ensure the new mortgage terms are within your financial means. This involves reviewing your income, outgoings, and overall financial stability. The depth of this check can vary between lenders. Some might require detailed documentation, while others might rely on the information already on file. Your mortgage advisor will do all of this for you, so there is no need to be worried about doing this yourself.
Mortgage Product Transfer Credit Check
A credit check is a common part of the product transfer process. Lenders use it to assess your creditworthiness and ensure there have been no significant changes in your financial situation since your original mortgage was approved. However, this check is usually less intensive than the one conducted during the initial mortgage application process.
Can You Be Declined A Product Transfer Mortgage?
Yes, it is possible to be declined for a product transfer. Just because you already have a mortgage with a lender, does not automatically mean that your product transfer will be accepted. This can happen for several reasons, such as significant changes in your financial situation, a poor credit score, or if the new product terms do not meet the lender’s criteria for affordability. It’s essential to review your financial health and credit status with a qualified professional mortgage advisor before applying for a product transfer to increase your chances of approval.
Providers Of Product Transfer Mortgages
Several prominent mortgage lenders offer product transfer mortgages. Each has its specific terms, rates, and conditions. Here’s a closer look at some of the leading providers:
Halifax Mortgage Product Transfer
Halifax is one of the most notable names in the mortgage industry, and their product transfer options are highly regarded. Halifax offers a variety of mortgage products that borrowers can transfer into, often featuring competitive rates and flexible terms. The Halifax mortgage product transfer process is straightforward and designed to minimise disruption for the borrower. The rates and options available can vary, so it’s always wise to review the latest offerings directly through a mortgage advisor.
The Mortgage Works Product Transfer
The Mortgage Works (TMW), a subsidiary of Nationwide Building Society, specialises in buy-to-let mortgages but also offers product transfers for existing customers. TMW’s product transfer process is designed to be seamless, allowing landlords to switch products without extensive paperwork or valuation requirements, thus ensuring continuity and potentially better rates.
Precise Mortgages Product Transfer
Precise Mortgages is known for catering to borrowers with complex income streams or less-than-perfect credit histories. Their product transfer options are tailored to meet the needs of their niche customer base, providing flexibility and competitive rates. Precise Mortgages’ product transfer process involves an affordability and credit check to ensure the new terms align with the borrower’s current financial situation. Many people who have originally taken out a mortgage with Precise on their higher rate products (due to credit issues) can switch their product to a lower rate offering once their credit has had time to repair.
Barclays Mortgage Product Transfer
Barclays offers a range of mortgage products for existing customers looking to transfer. Their product transfer process is efficient, often requiring minimal documentation. Barclays is known for competitive rates and a variety of options tailored to different financial needs, making it a popular choice for many homeowners.
Nationwide Mortgage Product Transfer
Nationwide is another major player in the mortgage market, offering an extensive range of product transfer options. Known for their customer-centric approach, Nationwide’s product transfer process is straightforward, with clear communication and support throughout. They offer competitive rates and terms designed to meet the evolving needs of their borrowers.
NatWest Mortgage Product Transfer
NatWest provides a variety of mortgage products that can be accessed through a product transfer. Their process is designed to be hassle-free, allowing borrowers to switch products with minimal fuss. NatWest’s product transfer options come with competitive rates and flexible terms, making them a solid choice for many homeowners.
Santander Mortgage Product Transfer
Santander offers a streamlined product transfer process for its existing mortgage customers. With a range of products featuring competitive rates and flexible terms, Santander ensures that their borrowers can easily transition to a new mortgage product that suits their financial situation.
Accord Mortgages Product Transfer
Accord Mortgages, a subsidiary of Yorkshire Building Society, provides product transfer options designed to be flexible and customer-friendly. Accord’s product transfer process emphasises simplicity and efficiency, allowing borrowers to switch products with ease and benefit from competitive rates.
Importance Of Product Transfer Mortgages
Product transfer mortgages play a crucial role in the financial planning of homeowners. Here are some reasons why they are important:
Cost Efficiency
One of the significant advantages of a product transfer is cost efficiency. Since you’re staying with the same lender, many of the costs associated with switching lenders, such as legal fees, valuation fees, and broker fees, are eliminated. This can result in substantial savings.
Simplicity and Convenience
The product transfer process is generally simpler and more convenient than remortgaging. The existing lender already has most of your information, reducing the paperwork and time required to complete the transfer.
Potential for Better Rates
As your current mortgage deal ends, a product transfer allows you to access potentially better rates without the hassle of moving to a new lender. This can lead to lower monthly payments and significant long-term savings.
Avoiding Re-Underwriting
Since the lender already has a relationship with you, the process of underwriting is often less stringent than it would be with a new lender. This means fewer hoops to jump through and a faster turnaround.
Tailored Solutions
Many lenders offer a variety of products tailored to different financial situations and needs. This flexibility allows borrowers to find a mortgage product that aligns closely with their current financial goals and circumstances.
The Importance Of Professional Advice
While product transfer mortgages offer numerous benefits, navigating the options and processes can still be complex. This is where the expertise of a qualified and experienced mortgage advisor becomes invaluable. A mortgage advisor provides personalised guidance based on your unique financial situation, helping you choose the best product transfer option. They can compare different products, explain the terms and conditions, and help you understand the implications of each choice. Mortgage advisors also have in-depth knowledge of the market and can provide insights into the latest trends and best available rates. This ensures that you make an informed decision that maximises your financial benefits.
With a mortgage advisor, the product transfer process becomes more streamlined. They handle the paperwork, liaise with the lender, and ensure that all steps are completed efficiently, saving you time and stress. A mortgage advisor helps you consider your long-term financial goals, ensuring that the product transfer aligns with your overall financial plan. This strategic approach can lead to better financial health and stability in the future.
Speak To A Mortgage Advisor Today
Our advisors provide personalised guidance, market insights, and streamlined processes to ensure you get the best possible deal for your unique financial situation. Contact us at Oportfolio Mortgages today to explore your product transfer options and secure a mortgage that aligns with your financial goals.
