‘Some remortgage applicants are savvy enough to do it themselves, others are not’ – Star Letter 04/12/2020

‘Some remortgage applicants are savvy enough to do it themselves, others are not’ – Star Letter 04/12/2020

 

This week’s Star Letter comes from Andy Wilson, who commented on the article: Compare the Market launches online execution-only remortgages.

Wilson said: “Some remortgage applicants are savvy enough to be able to decide whether a particular offering is right for them. Some are definitely not, and should be taking advice.

“I arranged for clients a two-year fixed rate deal on a Help to Buy (Mortgage Guarantee) product with the Woolwich (now Barclays Bank) in 2015.

“After the two years was up, the clients went direct to the lender and reserved a five-year fixed rate product transfer, without taking advice. They did not need to carry on using the Help to Buy products as their loan to value (LTV) had reduced markedly after two years of paying the mortgage and with house price increases in the meantime.

“They now find the new product was still a Help to Buy Mortgage Guarantee product and carried a further five-year exclusion from borrowing more money on a further advance.

“Three years later and now their only way of releasing more money for the home improvements they plan to do would be by remortgaging, with the associated early repayment charge kicking in for repaying the five-year deal.

“To make matters worse, the lender no longer needs the security of the Help to Buy guarantee as the LTV is even more improved after five years. Even with the further advance monies, the LTV is below 80 per cent.”