Q1 Why are we introducing a new product structure for further advances?
Whether customers are looking to switch rates or borrow additional funds, this new approach will mean that they can select a product that has been specifically designed for their needs. This brings us into line with the majority of other lenders, who have a separate range for further advances.
Q2 Will the separate product ranges be clearly visible?
The product guides available on our website will clearly identify which products can be used for further advances and which ones are for product transfers.
Q3 Is there any impact on procuration fees?
No. This product change does not impact on any existing procuration fee arrangements.
Customers requiring a product transfer and further advance
Q1 What happens if my client wants to take a product transfer and a further advance?
As is the case today, the further advance must be applied for first of all and when the funds have been released a product transfer application can commence. However, your client will no longer be able to have the same product for both transactions. They will need to select a rate from the further advance range for the additional borrowing, and then select a separate product from the product transfer range for the existing debt.
Please Note: Once the further advance has drawn down, a 48 hour delay must take place before a product transfer application can commence. When selecting a product transfer deal, your client must choose from those available from the range at that point in time (ie. 48 hours after the further advance has drawn down) - not from the range that applied at the outset when they first applied for the further advance.
Q2 What would happen if I keyed the product transfer application first to ensure my client gets the transfer product they want, and then subsequently keyed their further advance application?
If the further advance application is keyed before the product transfer has actually taken effect, the pending product transfer application is automatically cancelled. In such cases, the further advance would end up proceeding as normal and no product transfer would take place even if an offer and completion letter has been sent to the customer.
Q3 What if it is more important for my client to secure the product transfer rate first of all, as they are less concerned about the further advance?
The product transfer can be keyed first but it must take effect before the further advance application is keyed (otherwise the further advance application would override, and cancel, the pending product transfer application). In addition, you should make your client aware at the outset that their further advance application may subsequently be declined and make sure they are happy to proceed on this basis, especially as early repayment charges may be payable if they then cancel the product transfer.
Q4 When taking a product transfer and a further advance, will my client have to pay two separate product fees?
Yes, if your client is looking to arrange a further advance and product transfer, they are treated as two separate transactions. As such, your client will have to pay any appropriate product fee on each separate transaction as applicable. In addition, please remember that the further advance administration fee of £99 will also apply.
Q5 Can my client still secure a rate with their further advance application, which can then be selected for a product transfer within 30 days of the further advance completing?
No. This existing process will no longer be required as your client will have to select a separate product for each transaction – ie. one product from the further advance range and another from the product transfer range.
Q6 What happens for cases where a further advance application has been keyed before the new range is launched?
Where a further advance application has been keyed on or before 8pm Saturday 31st October 2009, the existing process will remain in place – ie. these clients can select the same further advance deal for their product transfer application as long as the transfer completes within 30 days of the further advance funds being released.