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Switching Mortgage Deals during the COVID-19 outbreak

Switching Mortgage Deals during the COVID-19 outbreak

Whether you can switch your mortgage deal during the COVID-19 outbreak has been a common enquiry since the start of the lock down period.

There are two ways you can typically switch your mortgage deal, either by way of product transfer with your existing lender, or by arranging a remortgage to a new lender.

A product transfer would ordinarily be the most straight forward process, but some lenders were having issues with these transactions, as their systems wouldn’t allow a new product to be applied whilst a borrower was taking a mortgage holiday.

Thankfully many of these issues have been overcome with TSB, Halifax & Birmingham Midshires notably having made updates to their systems to allow a new product to be applied even whilst a borrower was on a payment holiday.

But what if you aren’t happy with what your existing lender has to offer? This is where things start to become a little more tricky.

There are some lenders still offering remortgage products and will allow you to switch to them, but these tend to be reserved for lower loan-to-value mortgages. Also, the main stumbling block for many lenders has been the ability to provide an accurate value of your property.

In the normal scheme of things a Surveyor may be called upon to visit your property to provide an assessment of the value of your home, but given the current social distancing measures that are in place and the fact that many Surveyors themselves have been furloughed, this has meant lenders have needed to adapt their automated valuation models to allow valuations to be prepared without the need of a physical valuation. However, certain criteria need to be met and if a value cannot be provided, then this will create a delay in the process until a physical valuation can be carried out.

Also, given that potential borrowers themselves maybe on furlough, lenders have needed to make amendments to their underwriting criteria to account for this.

So in answer to the question, can you switch your mortgage whilst on lock down, the answer is well, maybe…


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