Switching Mortgage Provider - How long?

spuddy

I've done the sums and decided to switch mortgage provider (current lender can't match what I can get elsewhere). First time doing this so I'm wondering how long the process takes from start to finish, and if there's anything I should watch out for?

My guess would be at least a couple of months (back of an envelope calculation below).

1. Application Approved - 10 working days
2. Valuation complete / Authority to obtain title deeds granted - 10 working days
3. Solicitor receives loan details from new bank - 5 working days
4. Loan offer signed - 5 working days
5. New bank receives signed offer / Solicitor requests final redemption amount from old bank - 5 working days
6. Solicitor requests funds from new bank, clears balance from old bank & requests deed transfer - 10 working days

g0g

Yeah 2-3 months or possibly more if it drags on. I'm in the process of my second switch to save interest. Handiest part is not needing new life cover. Note new mortgage needs to be less than remaining life cover term, so if for example your mortgage is currently 24 years 10 months then your new one will likely have to be 24 years. I don't think/know they give them out in anything other than whole years, but open to correction! The biggest hassle is just gathering the various bits and pieces of paperwork, but it's worth it! Most give you a few quid, but watch out for those who'll take it back if you leave within X years. The AIB current offer I think has no strings attached.

spuddy

g0g wrote: »

...Note new mortgage needs to be less than remaining life cover term, so if for example your mortgage is currently 24 years 10 months then your new one will likely have to be 24 years. I don't think/know they give them out in anything other than whole years, but open to correction! ....

I'll be able to let you know, I'm applying for a term over a specific number of years and months.
I was expecting it to take 3 to 4 weeks, quite surprised it'll likely take twice as long, no wonder people are hesitant about switching! That being said when I think about it, other than pulling the paper work together, and signing the new loan at the solicitors, there isn't a huge amount for me involved.

g0g

spuddy wrote: »

I'll be able to let you know, I'm applying for a term over a specific number of years and months.
I was expecting it to take 3 to 4 weeks, quite surprised it'll likely take twice as long, no wonder people are hesitant about switching! That being said when I think about it, other than pulling the paper work together, and signing the new loan at the solicitors, there isn't a huge amount for me involved.

Ah I'd say if you got them not at a busy time and had a really efficient bank and solicitor then maybe it could happen quicker, but my experience from my first switch was a good while. This time it's already been 6 working days since I sent in my form and I've heard nothing. Next will be valuation then all the to-ing and fro-ing between bank and solicitor, then I'll have to sign stuff etc etc

spuddy

Update: I'm a month into the process and so far so good, the new lender has issued the offer to my solicitor, so nearing the final hurdle(s).

One question I have, the new lender has requested that both the mortgage protection policy and the building insurance be assigned to them.

My solicitor has claimed that the new lender has made this a stipulation for draw down. This seems unusual to me as surely you cannot assign a policy currently assigned to the old lender until they have been paid in full.

Has anyone experience with this?

Trish56

All lenders require you to assign your mortgage protection policy to them and will be a condition of loan offer. Regarding Home Insurance you need to get the new lenders notice interest noted on your policy and send them a Letter of Indemnity. Both should be easy enough to supply, change the interest noted on your Home Insurance Policy and ask for a new indemnity letter.

Your Solicitor should be familiar with changing the Assignment of the Life Policy.

pasquale83

Trish56 wrote: »

All lenders require you to assign your mortgage protection policy to them and will be a condition of loan offer. Regarding Home Insurance you need to get the new lenders notice interest noted on your policy and send them a Letter of Indemnity. Both should be easy enough to supply, change the interest noted on your Home Insurance Policy and ask for a new indemnity letter.

Your Solicitor should be familiar with changing the Assignment of the Life Policy.

Hi Trish56. Is this about home insurance and life cover?
In my case I have kept the ones I already have. I just gave the bank some letters the insurances sent me on and they were OK with them. In fact the approved my mortgage already. Do I need to tell the insurance companies of the new lender?

Trish56

Yes before the funds are issued you will have to get an Indemnity letter from your Home Insurance Company with your new lenders interest noted on it.

Regarding Mortgage Protection your Solicitor will probably give an undertaking to the new lender that the original mortgage protection policy will be forwarded once the mortgage is cleared and deed of assignment is released by existing lender.

pasquale83

Trish56 wrote: »

Yes before the funds are issued you will have to get an Indemnity letter from your Home Insurance Company with your new lenders interest noted on it.

Regarding Mortgage Protection your Solicitor will probably give an undertaking to the new lender that the original mortgage protection policy will be forwarded once the mortgage is cleared and deed of assignment is released by existing lender.

I was at the phone with both insurance company while you replied.

Re life cover looks like the policy was not assigned. I already gave the letter of indemnity from the insurance to the new lender and they are fine with it.

Re home cover, they already sent on their letter to the new lender's office and they took note of the new lender in their systems. So they're fine as well.

I signed the papers in the solicitor's office on Fri so everything should be on the way.

Thanks for your help!

spuddy

pasquale83 wrote: »

...Re life cover looks like the policy was not assigned...

You're quite lucky you found this out now, would have certainly complicated matters should the worst ever have happened. Quite surprising your existing lender allowed the mortgage to be drawn down without it being assigned.

Trish56

During the Celtic tiger not all lenders required you to assign the mortgage protection policy now they all do. Once the premiums are paid it would not complicate matters should the policy holder die as the policy would pay out and the mortgage balance would be cleared. If premiums were not paid would make no difference if the policy was actually assigned or not.

spuddy wrote: »

You're quite lucky you found this out now, would have certainly complicated matters should the worst ever have happened. Quite surprising your existing lender allowed the mortgage to be drawn down without it being assigned.

spuddy

Trish56 wrote: »

During the Celtic tiger not all lenders required you to assign the mortgage protection policy now they all do. Once the premiums are paid it would not complicate matters should the policy holder die as the policy would pay out and the mortgage balance would be cleared. If premiums were not paid would make no difference if the policy was actually assigned or not.

It does beg the question why lending institutions make assignment a condition of draw down?

spuddy

Quick update, the switch is complete The new mortgage has been drawn down and my solicitor has cleared the existing one.

My initial estimate wasn't far off, the process did take a couple of months from start to finish, but I doubt I spent more than a day's effort, and most of that was filling in forms, the appointment with the solicitor and bit of chasing up with the new and old lender to ensure nothing was missed!

Definitely worth the "investment" given the savings involved, wasn't as bad I thought it was going to be starting out.

James Bond Junior

I did it this year and it took about 3.5 months. KBC to Ulster Bank. I got it all done in July and 3 attempts later KBC still haven't reassigned my direct debits. If moving from KBC add an extra month or so.

Amateurrunner

I'm currently switching from KBC to AIB, signed all the legal documents last week so hopefully I won't be making anymore KBC payments. I plan on closing all if my KBC accounts when the transfer is complete. AIB let us keep the same term that was left on our mortgage, I just needed to state the exact number of years and months I wanted. If you want to have X amount of months I'd recommend requesting it using total number of months too e.g. 20yrs and 6months or 246 monthly payments.