JSMedia – When remortgaging your home, it can be an attractive idea to port your existing mortgage deal. Not only does this avoid paying an early-repayment penalty, it can also free you from a stringent set of eligibility criteria. For example, if you’re moving to a new property, you can move your debt over to your new mortgage deal, without incurring the usual exit penalties. An early-repayment penalty can cost thousands of pounds.
Lenders are required by law to allow their customers to move over a mortgage to another one. Currently, the rules apply to a fixed quarterly or rolling four-quarter limit, depending on the lender. The new rules clarify the scope of LTI flow and apply to ‘porting’ a mortgage to another property. The FCA and PRA will continue to monitor developments affecting mortgage porting.
The FCA has hit out at lenders over a ‘baffling’ mortgage porting policy, saying that the rules do not give consumers the opportunity to move. Some banks were forcing people to wait more than five weeks to see a branch adviser and some were ‘forcibly’ foreclosed properties. The rules are now a bit more flexible, but the ‘baffling’ nature of the rules does not mean that porting a mortgage is without risk.
The FCA Hits Out at Lenders Over ‘Baffling’ Mortgage Porting Policy
Lenders need to make it easier for consumers to switch their mortgage if they’re not sure it will work for them. Some lenders have introduced new products that make mortgage porting a breeze, while others have been less than accommodating. Whether you need a low-cost loan or a long-term fixed rate, porting a mortgage is a convenient option. It keeps your mortgage deal intact and prevents any exit penalties.
Lenders have been accused of blocking the process of mortgage porting by preventing customers from switching. This is a ‘baffling’ stance, if you ask us. Ultimately, if the process is ‘baffling’, it simply means that the lender isn’t willing to accommodate you. You’ve got to be able to port your loan to your new home.
In the United Kingdom, building societies have traditionally dominated the mortgage market, but that is changing. As a result, they’ve been unable to compete effectively. The role of a lender in the mortgage market has changed dramatically. There are now over 200 financial institutions in the UK who provide mortgage loans. They include major banks, community banks, credit unions, and savings and loans institutions.
The ‘baffling’ mortgage porting strategy by many lenders has caused confusion and mistrust among consumers. Some lenders are refusing to help borrowers in this situation, and may not be willing to transfer a mortgage if it costs too much. The financial services authority wants to ensure that the public is confident in the mortgage industry. A reputable lender will provide details of all credit checks and credit reference agencies used by clients.
Lenders have become ‘baffling’ in their mortgage porting stance. The changes in mortgage criteria for those who have changed their circumstances have been a major reason for this decision. The criteria used to be a huge obstacle for some people, and the ‘baffling’ nature of the new criteria has created a lot of confusion. While it is still important to consider your circumstances, the ‘baffling’ approach is confusing to many borrowers.
Generally, the ‘baffling’ mortgage porting approach is a result of the criteria for a mortgage deal. Those who have changed their circumstances in the past will need more documentation from their previous lender, while those who did not before have to make more than a single change will need more information to get the right deal. In such cases, the new lender may be more willing to work with them.