Summary
We recently helped a couple in Camberley arrange a new mortgage deal on their shared ownership property as their existing fixed rate with Barclays was coming to an end.
The customers owned 50% of the property and had an outstanding mortgage balance of around £132,800. They wanted to keep the process straightforward and avoid the additional paperwork, valuation, legal work and underwriting involved in moving to a new lender. They also preferred a two-year fixed rate so they could review their options again relatively soon, including the possibility of purchasing a larger share of the property.
After reviewing the available Barclays options, we arranged a fee-free two-year fixed-rate product transfer. This gave the customers predictable monthly payments while keeping costs and administration to a minimum, and left them well placed to reassess their mortgage and potential staircasing plans in two years.
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The Scenario
An applicant couple residing in Camberley, owning 50% of their property under a shared ownership scheme, sought to renew their mortgage product as their existing two-year fixed rate with Barclays approached its end. Their primary objective was to secure a new fixed-rate product with minimal hassle, avoiding additional fees or complex processes associated with switching lenders.
The applicants expressed interest in reviewing their mortgage options in the future, potentially to purchase additional equity in their home. To align with this goal, they preferred a two-year fixed rate, providing flexibility for reassessment at a later date.
The Challenge
This case presented several specific challenges:
- Avoiding Additional Fees: The applicants preferred a fixed-rate product without a product fee to minimise upfront costs.
- Maintaining Flexibility: A two-year fixed rate was required to allow for the mortgage to be reviewed in 2 years time and potential staircasing opportunities.
- Simplified Process: The applicants wished to avoid the complexities of switching lenders, such as document submission, underwriting, valuations, and legal processes.
- Efficient Transfer: As a product transfer, the process needed to be seamless and streamlined, reflecting the reduced work involved compared to a standard remortgage.
The Process
A thorough consultation provided insights into the applicants’ goals and preferences, guiding the development of a tailored solution:
- Retaining Barclays: Staying with the existing lender eliminated the need for underwriting, valuations, or legal procedures, ensuring a straightforward transfer process.
- Selecting a Fee-Free Product: A two-year fixed-rate product without a product fee was recommended, aligning with the applicants’ desire to minimise upfront expenses.
- Streamlining the Application: The product transfer process was managed efficiently, ensuring the transition to the new rate was smooth and hassle-free.
- Discussing Protection Needs: Protection options were reviewed with the applicants, who chose to revisit these closer to the completion date.
The Solution
The recommended solution was a product transfer within Barclays, featuring:
- Loan Amount: £132,801, reflecting the outstanding balance on the shared ownership property.
- Interest Rate: A competitive two-year fixed rate, providing payment stability while maintaining flexibility for future decisions.
- Fee-Free Product: No product fee was included, reducing the upfront cost of the transfer.
- Seamless Process: Remaining with Barclays ensured minimal disruption and an efficient transition to the new product.
Outcome
The product transfer was completed successfully, securing a two-year fixed rate that met the applicants’ needs for stability and flexibility. By avoiding a product fee and retaining their existing lender, the applicants minimised costs and simplified the process. This approach positioned them to reassess their mortgage and potential staircasing options in two years’ time.
Key Takeaways
This case highlights the value of tailored solutions for shared ownership mortgages, particularly in scenarios where flexibility and simplicity are key. By selecting a fee-free product and leveraging an efficient product transfer process, we delivered a solution that met the applicants’ goals.
If you’re approaching the end of your mortgage term and considering a product transfer, contact us today to explore options designed to suit your needs.
