This year looks like being a strong one for remortgages. We knew already that January was set to be a busy month for refinancing, with CACI data showing that mortgages worth around £6.7bn would be maturing, but momentum has continued since then. Yet what has been really eye-catching has not just been the volume of remortgage business, but what is driving people to refinance.
Debt consolidation remains a common reason for remortgaging, as borrowers look to release equity from their property to help get their overall finances into better shape. Given the difficulties of the last couple of years, and the fact that many will have turned to various forms of credit in order to keep going, it’s understandable that they might now want to bring those debts together into a single loan.
However, it’s been notable just how many of the remortgage cases we see at eConveyancer are from homeowners looking to use those funds to carry out home improvements. For some, it may be an attempt to adapt to the new normal and establish a regular base from which to work, while others may be hoping to add a new room to help with a growing family. In some cases it’s simply families really fancying a conservatory.
Whatever the motivations, it’s been striking just how many cases we have seen of homeowners deciding to unlock value from their home and devote that cash towards improving their property in some way, large or small.
The astronomical house growth of the last few years has meant that many homeowners are sitting on larger equity stakes, which they can put to good use on a home improvement project too.
The latest figures from the Office for National Statistics for example show that in the year to December, property prices grew by an average of 10.8%. To put that in cash terms, the typical home saw its value increase by £27,000, a portion of which could be devoted towards carrying out some form of renovation to make the property more suitable for the owners’ needs.
Speed is of the essence
Brokers will know only too well that when a client has their heart set on a home improvement project, they want the funds as soon as possible. They have the vision for what they want to achieve – and potentially the builders already booked in – so they need to get the financing for that project in place quickly.
Unfortunately, speed and remortgages are not always easy bedfellows. All too often a creaky process can mean that borrowers are left waiting weeks at a time to access their own cash and get on with the project at hand. Given the labour and material shortages within the building industry at the moment, those sorts of delays can doom a home improvement project before it’s even begun.
Indeed, it’s the typically slow pace of remortgages that have played a part in the growth of product transfers for those looking to refinance without increasing their mortgage debt.
Turning to technology
It doesn’t have to be like this though. At eConveyancer we’ve made it our mission to improve the process not only of buying and selling a home, but of refinancing too, finding ways that technology can speed things up and make it more efficient.
Our Rapid Remortgage service has seen turnaround times slashed, to the point that they rival product transfer times. Qualifying customers are sent out a starter pack, and once this has been completed and returned, the conveyancers kick into gear. Subject to a mortgage offer, the case is made ready for completion by the end of the next working day.
Forget about waiting weeks for the funds – through Rapid Remortgage we have seen full remortgage completions take just four days, a timescale that means clients can get on with that home improvement project immediately.
Huge amounts of any mortgage deal are transaction of the hands of brokers, as they wait for lenders to process applications and conveyancers to handle the legalities of the deal. And yet it’s brokers who are the ones having to deal with upset and stressed clients when the case moves slowly.
That’s why it’s so important for brokers to partner with firms they can trust, not only to treat the clients properly but to deliver a quality service at a speed the client expects.
Karen Rodrigues is director of sales at eConveyancer