What is a product transfer mortgage?
So, how do you define a product transfer mortgage and what does this term actually mean?
A product transfer is when you move from your existing mortgage deal to a new one with your current lender. While it is not a new concept, a product transfer is a lesser known option which may be a good alternative to remortgaging, depending on your circumstances.
Mortgage product transfers
This example should help put things into perspective: Supposing you’re currently on your lender’s Standard Variable Rate (SVR) and it’s increased recently due to an interest rate rise, you may consider moving on to a fixed rate mortgage plan.
Assuming you want to keep your loan amount the same and are happy with your current lender, this would be classed as a product transfer because you’re just moving from one product to another.
Product Transfer Procedure?
The product transfer process is typically very straightforward. This is due to the fact that, unlike if you were requesting an advance or going down the remortgage route, it is unlikely that a formal valuation will need to be carried out on your property.
Product transfers can usually be quickly arranged with your lender either over the phone or in branch. The applicant(s) may be subject to an affordability check (however, some high street lenders do not require this to be carried out with standard product transfers), in which they will complete an income and expenditure form. Once this has been completed and provided the credit check is approved (if applicable), the borrower will be provided with a product transfer document to sign. A handful of lenders may also require a re-evaluation of proof of income, but many do not.
Many lenders use property valuation software which return results very quickly, meaning that the whole process can potentially be completed in as little as a week.
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