Are you contemplating whether to opt for a remortgage or a product transfer? Do you know which one is the best for you? If not, this article will cover the differences between the two and also summarise the advantages and disadvantages of both.
A product transfer involves the switching of one mortgage product to another but still remaining with your current lender. However, if you decide to borrow additional funds with your existing lender then this would be classed as a ‘further advance.’ If you choose to move to a new lender at a different rate, then this would be referred to as a remortgage.
Further advances and remortgaging can be quite extensive in comparison to product transfers. A full mortgage valuation will typically be required, along with legal requirements and all the necessary credit checks and affordability assessments.
A remortgage or further advance tends to have several steps and checks which means the process is likely to take awhile. There are also additional people involved which means that it will be costlier to arrange.
The main pros of a product transfer are:
To summarise, product transfers are much more simplified and faster to process and sign off.
Product transfers are a suitable option for most people but the main disadvantage is that you may be restricting yourself by staying with your existing lender.
As mentioned previously, alternative mortgage lenders may be able to offer you far more competitive rates than your existing one. This means that you could most likely save a lot of money in the long run by switching to a new provider.
If you’re contemplating a product transfer, then definitely seek advice from a broker who will search the whole market for the best rates available to you. Depending on your circumstances, remortgaging could be a far more cost-effective option.
Get in touch with us and we’ll book you in with a specialist product transfer or remortgage broker who will search the whole market to find the best deal for you, offer you expert advice and introduce you to the right lender.
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