Credit Check?

AndreGonzalez

My two and a half year fixed rate mortgage has come to an end and I want to establish if there is a better product for me with my current provider.

Does anyone know if I will have to go through a credit check again if I stay with my current Mortgage provider?

Any advice would be great.

Regards,
Andre

AndrewSmith

Depends on the lender. Sometimes they will, sometimes they won't.

Many these days are running credit checks on product transfer applications due to the tightening criteria on borrowing.

Why is it a concern for them to run a credit check?

AndreGonzalez

It's with Standard Life Bank.

I have had no problems with mortgage re-payments with them ever but I have about 5.5K worth of debts on two credit cards and an overdrawn bank account.

AndrewSmith

Standard Life Bank do not do any further credit checks or credit score for product switches from existing borrowers, as long as you are not increasing the loan amount.

They may charge a product fee however this is usually added to the loan.

Andrew

AndreGonzalez

Thanks for your help Andrew

Becks045

Out of interest does anyone know if HSBC run credit checks if you change your mortgage product with them?

luckyfool

If you are just switching products without increasing borrowing then it would be rare for any lender to run a new credit check. I don't know about HSBC specifically though.

AndreGonzalez

I have just called up my lender, Standard Life to switch products.

I was on a 2.5yr fixed rate mortgage of 4.65% and what they are now offering me is 6.75% fixed for 5yrs or 6.14% fixed for 10yrs. Obviously this is quite a hike in interest rates.

Can anyone advice on whether or not it is worth holding on for a bit to see if interest rates are going to fall and hence I might get a better mortgage rate?

Kind regards,

Andre:D

luckyfool

Bank Base rate is likely to be cut again in April, however it looks unlikely that this will have much of an effect on lowering the rates available in the market. There is upwards pressure on rates (see Nationwide) from lenders who are just trying to reduce their lending volumes and it is difficult to see that improving in the short term.

The 10 year fixed rate sounds reasonably competitive, the 5 year fixed rate less so. As long as your credit cards are paid on time, and your overdraft is not over any limits then I would not automatically assume that you will have trouble getting a deal from another lender. Depending on your loan to value and other circumstances you may well be able to source something significantly better from another lender.

I would recommend speaking to a good whole of market mortgage broker sooner rather than later who can advise you. As things stand the better products are disappearing very quickly just now.

AndreGonzalez

The LTV is about 75%

I phoned up my current lender because I thought it would save on money on legal fees etc. etc. and I wouldn't have to go through another credit check.

luckyfool

AndreGonzalez wrote: »

The LTV is about 75%

I phoned up my current lender because I thought it would save on money on legal fees etc. etc. and I wouldn't have to go through another credit check.

Both true, and it would be faster and less hassle as well.

However many remortgage products have free legals and surveys included anyway, and unless you are sure you would fail the credit check or have a specific other reason why you don't want any credit checks done, then if you can find a significantly better rate then that would outweigh these other considerations if you can save several thousand over a deal period.

cheers,

Joe