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    Should you remortgage with same lender?

    When it comes to remortgaging your home, there are two major ways in which you can go about it. You can either stick with the same lender and replace your existing mortgage deal with a new one or find a new lender and get yourself a new deal. Based on the interest rates and fees you are looking for and your circumstances, it is important to choose the most feasible option. Work with a reliable and capable remortgage broker to guide you in making the right decision.

    Let us start by understanding is it good idea remortgaging with same lender:

    Advantages of remortgagewith the same lender?

    Saving on monthly payment and fees.

    At least initially, remortgaging with the same lender helps you save a good amount of money. If your current deal is ended your monthly payment are gone up as you are on SVR.  But remortgaging to same lender often called product switch will save you on your monthly mortgage payments.

    When you are not switching to a new lender, you may not need to pay an extra valuation fee as they are already well-versed with the value of your property.

    You may also not be required a solicitor for legal works again and pay them their fees. Further, you can save money by not paying an exit fee/redemption fee to the lender as you are not switching lenders.

    There are more benefits if you remortgage your deal before your lock-in period ends. In such cases, your lender may not charge you with early repayment charges if you change product within last 3 months of your fixed term ends.

    Your lender knows the internal index-linked valuation of your property. Based on the new value of your property, they would provide you with available products to choose from.

    Simpler procedure

    The process of remortgaging with the same lender is called product switch and it is fairly simple as the lender already has all your basic details. As compared to making a new mortgage application altogether. Essentially, remortgaging with the existing lender is simple procedure of switching mortgage products without making material changes.

    While a new mortgage with a new lender may take a few weeks or months to complete, remortgaging with the existing lender would not take more than a few days. This helps you save the time and effort you put into getting a successful mortgage.

    No strict credit checks or paperwork

    Unless you have not delayed your mortgage repayments the existing lender will not conduct strict credit checks while remortgaging. This saves you from going through a stringent procedure of getting your credit score evaluated.

    Apart from credit checks, your existing lender will also be lenient documentation as they have already made those checks while giving you the first deal. Your existing lender will not ask for salary slips or bank statement again while remortgaging your loan.

    Disadvantages ofremortgagingwiththe same lender

    While remortgaging with your existing lender has its own advantages, here are some important considerations to keep in mind before you make your final decision:

    Limited deals

    When you engage with the same lender for remortgaging your loan, it may limit your options of getting a new deal. A specific lender can offer you only so many deals which may or may not be ideal for you. When you are not looking for a new lender, you may be missing out on new and cheaper deals.

    Ideally, even if you are willing to stick with the same lender, it is advisable to be aware of the new deals available in the market before you make any decision. Your remortgage broker would help you look for the best deals in the market that help you save money.

    Biased advice

    No one is willing to lose their business and clients. When you are thinking about remortgaging your property and your lender comes to know about the same, they are likely to do their best to not let the deal go. This may lead to them giving you biased advice that makes you stick with them and refrain from switching lenders. This takes objectivity out of the equation and influences your decisions, especially if you are new in the market.

    Therefore it is always important to work with a dedicated remortgage broker who would search the whole of market and prevent you from getting biased advice.

    Missing out on introductory rates.

    While remortgaging with the same lender allows you to save money initially, engaging with a new lender may provide you with introductory rates for new clients. Many lenders provide exclusive offers to new borrowers that include free valuation, cashback, no legal fees, and more. If you come across a new lender who is ready to provide you with such offers, make sure you compare the two situations with the help of your broker and make a right decision.

    Missing out on a better LTV

    In most cases, the existing lender does not conduct a thorough valuation of the concerned property when it comes to remortgaging. This may prevent you from getting the true value of your property. If the value of your property has increased significantly over time, remortgaging with a new lender would help you get a cheaper deal as the LTV (loan-to-value) of the property increases.

    The Final Word

    These were some of the most important advantages of remortgaging with an existing lender and aspects to consider before doing the same. Before you make your remortgaging application, make sure you evaluate every possibility and have knowledge about different deals available in the market.

    Get in touch with our MariannaFS to see how they can help with your remortgage.

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