The new year is generally seen as a time for a fresh start, and that’s certainly going to be the case for thousands of mortgage borrowers. According to analysis of industry data by Yorkshire Building Society, January is going to be one of the biggest months of 2022 for mortgage maturations, with a massive £6.7 billion worth of mortgages maturing in the month.
That’s an awful lot of borrowers who face the prospect of moving off of a cheap fixed rate and into the payment shock provided by their lender’s standard variable rate. Not exactly the most cheerful beginning to a new year.
Now some of these borrowers will already have been in contact with their brokers, and be well on the way to getting their refinance plans in action. Indeed, we know that the best and most proactive brokers go out of their way to open that dialogue around refinancing months before the initial fixed or variable period comes to an end
Yet that isn’t always the case. There will always be clients who leave it to the very last minute to get the ball rolling on refinancing, until the threat of that SVR is looming large.
The attraction of a product transfer
If a client faces a testing deadline in order to refinance, then a product transfer can be an attractive option for brokers to highlight. The process is generally a speedy one – the fact that the client doesn’t have to move to a new lender means there are no issues with affordability tests, which can add time to any application.
This lack of an affordability check is also going to appeal for clients whose circumstances have changed since they took out that original deal. Given the financial difficulties of the last few years, there will be no shortage of borrowers in this particular position.
The fact that some lenders are more competitive on the rates offered on product transfers also helps, meaning that refinancing customers enjoy rates that are at least comparable to those provided to new customers.
Are they the right choice for your client?
However, it would be wrong to conclude that a product transfer is always the right option for a client facing a tight refinancing schedule. Brokers know only too well that the approach of lenders towards pricing for product transfers can be incredibly inconsistent – while some provide competitive rates, other clients will end up paying much higher rates than if they moved to a rival lender.
Ultimately, brokers want their clients to get the best deal, and that means considering all of the potential options – not just the fastest ones.
Product transfers may be thought of as the speedy option, but in reality remortgages do not have to be a slower option. At eConvenancer, we’ve developed the Rapid Remortgage service, which means that qualifying remortgage customers enjoy a dramatically faster process in getting their deal completed in time.
A starter pack is sent out to qualifying clients, and once that has been completed and returned, the Rapid Remortgage service kicks into action. It means that the case is made ready for completion – subject to the mortgage offer of course – by the end of the next working day.
The case turnarounds that we have seen as a result of the Rapid Remortgage service have been extraordinary, with full completions going through in just four days. With a timescale like that, remortgages can more than hold their own against the allure of the product transfer, and potentially leave the client with a far better deal overall.
Brokers think long and hard about the businesses they want to partner with, and how they can deliver a better, more comprehensive service to their clients. By aligning with the right legal partners, you can ensure that your client’s remortgage case completes speedily, no matter what sort of deadline they may be facing.
Karen Rodrigues is sales director at eConveyancer
