Self Cert or Standard Remortgage
Self Cert or Standard Remortgage? That Is The Question
The clients had their mortgage with The Mortgage Business for seven years, ever since they bought their first property. Mr Helm was self employed, and had been recommended to The Mortgage Business (Part of the Halifax group) by an existing broker as this lender accepted self cert income. The clients always picked short fixed rates with the lender, and always chose to switch to whatever rate was available at the time, when their current fixed rate came to an end. For the last two years they had been enjoying a reasonably competitive fixed rate when one month Mrs Helm decided to check her bank statement, which she never usually bothered to do. Imagine her surprise when she noticed that her mortgage payment had jumped up by over £130 per month!
Shocked at this, and convinced that there had been an error, she called her lender. She was advised that her fixed rate had expired a few months ago, and that for the last five months she had been paying the lender's standard variable rate.
The lender advised Mrs Helm that they had contacted her by letter at the time her fixed rate expired to advise her, but she does not recall receiving such a letter.
The lender offered to move her loan onto their current fixed rate (which was a lot higher then what she was paying as interest rates had been going up in the last few months. She had all but decided to sign the paperwork for this, thinking that this was a good deal, when she happened to be on the internet and thought she would have a little look to see if they were offering them their best rate.
Whilst online, she came across our website and contacted us to see if we could confirm that this was their best rate.
Having explained that she does not need to stay with her current lender, and that there were incentives such as free legals and free valuations available from the majority of lenders, which would keep their costs of switching to a minimum, we quoted a more competitive rate fixed for two years. In addition, as the value of their property had increased in the last seven years, and their credit score was good, they now qualified for a 'fastrack' deal, meaning they could switch to a mainstream lender without providing evidence of Mr Helm's income.
Better still, we were able to advise the client that, as our service is ongoing, rather than ending when the mortgage completes, we would be contacting her when her mortgage rate expires to offer alternative competitive rates so that they never have to pay the lenders standard variable rate again.
***A Fast track mortgage explained - Some high street lenders offer what is known as a fast track mortgage where, if you pass their credit check with a good credit score they will 'fast track' the deal and they do this by reducing the amount of paperwork they request such as the need to provide the proof of income. The income you declare must be a true reflection of your earnings and the lender does reserve the right to request proof of it at time of application. For example a lender may request proof of income in 1 out of every 20 applications to ensure that the system isn't being abused.***
