When it comes to remortgaging, a common question is should I stick with my current mortgage lender, OR should I switch and remortgage elsewhere. The answer to this is simple- it’s extremely case dependant and relies on multiple factors to determine the right course of action on a case-by-case basis for everyone. What is suitable for one person may not be the right option for another.
To guide us through the options of either sticking or switching lenders when the time comes to remortgage, we’ve asked Chloe Spooner, Mortgage and Protection Adviser to share her thoughts, so you can gain a better understanding of what is the right choice for you.
Let’s hear more from Chloe…
There can be benefits of choosing to stick with your current lender as well as making the decision to switch. In the current climate, it can be extremely difficult to know what the right choice will be for you and your financial situation.
Below I’ve explained in more detail the foundations of sticking or switching, along with some benefits and disadvantages for both, to give you a better idea of what each option involves.
Sticking with your current lender
Sticking with your existing mortgage lender means completing a product transfer, and selecting a new deal they have available to you at that time. As you are currently with this lender, as long as there have been no changes in your personal circumstances, the lender does not normally require any new documentation and no new credit searches are conducted.
This offers speed of a mortgage completion, ensuring that when your current product ends, the new product will instantly take effect, allowing you to avoid reverting to the lenders standard variable rate. As you’re remaining with the same mortgage lender, no solicitors are required to complete this transaction.
A disadvantage of choosing to stick with your current lender can be the possibility of achieving a better mortgage deal by switching to a new lender. Therefore, choosing to stick can potentially restrict your options, as you only have one lender and their offers.
Switching
Switching to a new lender means completing a Remortgage. This will involve providing a full compliance list of documents, a new credit search which will be completed on submission of your application, and solicitors will need to be involved for this transaction. This is because you are redeeming your current mortgage and registering a new charge with a new lender.
Switching could allow you to move to a lender who is offering a more competitive interest rate, as well as lower monthly payments. This essentially means you will be saving money over the term of your mortgage.
You are also open to view the whole of the market by looking at all lenders rather than restricting this by choosing to stick.
However, a full remortgage does require higher levels of documentation, which means that it will indefinitely take longer to complete than a product switch. Depending on how far in advance you start the process of remortgaging, this could impair your preferred choice of switching.
We can help choose the right solution for you
If you are in a position where you need to remortgage, but still aren’t sure whether to stick or switch, we are here to help. We will assess options based on what is best for your personal circumstance, and make the process simple, so you can be rest assured that you have the best mortgage deal.
To get in touch so we can start to review your circumstances and objectives to determine which option is best suited to you when your mortgage is due for renewal, click here.
