Execution only mortgage - Affordability Check

Glover1862

Getting conflicting advice, if you have an existing mortgage and the fixed rate is coming to an end and your lenders offers a "execution only" option do you still have to go through the affordability check?

I'm with the Co-op and can book a product 4 months ahead, previously I've used execution only (2011) and the whole process took 5 minutes with no real checks, with the new MMR rules will I need to go through affordability again? My income although not changed much I do now have a BTL mortgage which I only took out last year so the income won't be taken into account.

ACG

If the income from that is not needed it should not matter, I think they would just want to ensure it is self funding.

Call up co-op and ask them, who better to ask?

Thrugelmir

Checks are at the lenders discretion. Some lenders have used this an opportunity to review legacy mortgage books when underwriting was soft. Though we are heading clear of that era now.

Glover1862

Thanks for the reply, when I initially called them they said no problem, no additional checking required, called to book an appointment and complete opposite.

Since then had a senior CS rep called and confirmed the booking agent simply takes the details for the product you are switching to and sends the paperwork through the post, sign and send back.

Found it a bit odd if you have to supply all the details again as a new application makes the execution only option pretty useless, thought I'd check to see here if anyone had any info before I made a fuss.

I've actually got 4 months until my product ends but thought I'd start the procedure just in case rates creeped up a little, if they go down then I can change to the new rate.

going for 1.94% no fee 2 year fix, odd that Platform (also COOP) have better rates at the mo. 1.74 for same product.

amnblog

You are swapping the rate - not going 'execution only' (this is self selection of a mortgage lender and rate which is no longer possible on a residential mortgage).

Lenders will swop rates in the vast majority of cases unless there are particular circumstances.

Examples

Arrears
Interest Only
Lender into retirement

In these cases they may take a view.

Glover1862

amnblog wrote: »

You are swapping the rate - not going 'execution only' (this is self selection of a mortgage lender and rate which is no longer possible on a residential mortgage).

Lenders will swop rates in the vast majority of cases unless there are particular circumstances.

Examples

Arrears
Interest Only
Lender into retirement

In these cases they may take a view.

Thanks, I agree is not very clear which could explain the confusion. this is from the coop Website

2. Select a new mortgage
We offer both fixed rate and tracker deals with preferential rates on some of our mortgages for existing mortgage customers.
Our fully advised service can help you find the right deal for you. Or, if you’d like to select your own deal, you can use our execution only service.


My current mortgage deal is ending, how do I change to a new deal?

You can switch to a new deal if your existing deal is due to end within four months, or if you're on our Standard Variable Rate. There's no need for a valuation, unless you believe your property has increased in value.
We will allow you to switch to a new product, a maximum of 10 days before your current mortgage product end date. We will not complete a credit check unless you want to request additional borrowing.

Execution Only Service
You may be able to opt for our Execution Only service if you are an existing customer. Execution Only means that you choose a product yourself without receiving advice from us. This is available in certain circumstances through our Mortgage Team

minimike2

Execution only is possible - Just not via a face to face advisor. Some lenders have execution only for new business and for rate switches, some just for rate switches. Some don't offer at all.

Usually there is no requirements for an affordability check, but some were trying it on in order to keep customers on a higher rate - The FCA took a dim view on this.

I do know some lenders, Halifax for example, do extra work for interest only mortgages when someone wants to rate switch in terms of the repayment vehicle and checking the customer has one and won't allow one in some scenarios unless swapped to repayment at the same time!