‘Content correct at time of publishing and subject to change’
Can you remortgage or change product deal during the lockdown?
Covid-19 has had a massive impact on life including the mortgage marketplace. Some of the lenders have withdrawn completely whilst others have withdrawn thousands of products. However, the outlook is not as bad and gloomy as you may imagine if you need to think about a remortgage.
If your mortgage deal is ending soon
Firstly, if your current deal ends soon, whilst there has been a reduction in the number of lenders and products, most of those withdrawn are for house purchases or higher risk lending.
Most lenders continue to offer product-transfer deals for existing customers and many still offer Remortgage deals for new customers. We can arrange these for you, so we can typically advise you on options from a wide range of lenders from our panel and your current lender at the same time.
If your income has been impacted by the crisis this might affect your ability to change lender but should not prevent you from transferring to a new deal with the current lender.
If your mortgage deal is ending within the next 6 months
For anyone whose existing deal comes to an end in six months, now is an ideal time to think about remortgaging.
Most lenders offer is valid for 6 months so you can apply well in advance, taking advantage of the extremely low current rates and set everything up ready to switch over as soon as the current mortgage deal expires.
There are several reasons why doing this now could be wise. Although no one has a crystal ball to be able to say for sure how the market will progress over the year, the likelihood of rates getting significantly better than today’s rate seems dim.
Debt Consolidating into your mortgage
This is the area where the remortgage market has already shrunk significantly.
Bear in mind though, that in many cases consolidating credit commitments into a mortgage does not represent the best value for money and may be more expensive compared to alternative options like balance-transfer deals or converting credit card debts into a personal loan for example.
It’s also important to note that you are converting unsecured credit commitments into a secured loan against your home, meaning you stand to lose your most precious asset if you default, where previously there may have been no risk of this at all.
Changing your mortgage term
You do not necessarily have to wait for your current deal to end to alter your mortgage term.
If this is something you want to look at, you can speak to your lender about this and may be able to do this midway through an existing deal even if you have early repayment penalties.
This can also be done as part of a remortgage or product transfer and if you want to reduce your outgoings in this way. Get in touch and we can discuss your options.
If you are in financial difficulty
If you are having trouble making payments, your first port of call should be your existing lender to discuss what options they have to prevent you from getting into arrears, including the government’s payment-holiday scheme.
If there is a serious risk of you defaulting on obligations like credit cards, loans or hire purchase and other non-secured credit commitments, you should also consider speaking to stepchange.org & the Citizens Advice Bureau about the implications of getting into arrears on either type of commitment and other options that may be available such as an IVA.