Mortgage brokers - how would you fix remortgages

Journalist: John Fitzsimons, Freelance

ended 31. May 2022

Morning brokers!

Apparently three quarters of remortgage borrowers believe the process is unfit for purpose (https://www.mortgagesolutions.co.uk/news/2022/05/26/76-per-cent-of-borrowers-feel-remortgage-process-unfit-for-purpose-%e2%80%92-pexa/), with issues including delays, a lack of transparency, and an inconsistent approach between lenders.

So I'd like to get your thoughts on what your biggest frustrations with remortgages are? And what could be done to make the process of refinancing faster and less stressful for you and your clients?

All thoughts very welcome!

6 responses from the Newspage community

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Without sounding rude, many remortgage borrowers don't understand the process to any actual extent to be able to comment in any meaningful way. So let's get this straight. We're talking about borrowing hundreds of thousands of pounds from a lender that doesn't know you from Adam. People forget that just because they have a mortgage with lender X, it doesn't follow that lender Y should automatically accept them without any checks. To remortgage from one lender to another, remember it's the same process as when you came to buy your home the first time. If you don't want to abide by a lender's process, don't remortgage; stick with a product transfer and avoid the hassle; however, you'll likely pay more in interest. Moreover, there cannot be by definition inconsistencies between lenders as that presupposes all lenders are the same, which they are not. For there to be inconsistencies, all lenders would be operating with the same systems, lending policy, credit scoring policies and have identical deals, which of course, they don't. However, one element that is the same is the conveyancing process of a remortgage. That can and should be overhauled as it's the main point of frustration for brokers and customers alike, and it's a repeatable and identical process no matter the solicitor you choose to use. Unfortunately, far too many people opt for 'free legals', which in the main are terrible and then complain about them when it's not going as quickly and smoothly as they think. If we could speed up and make the legal process more efficient, that would have the biggest bang for the buck without a shadow of a doubt and most frustrations would vanish overnight.
If they talk to a good broker it's so much easier. If more people who needed a mortgage simply went on Google, searched for 'mortgage advice' near them and contacted whoever has the best reviews, they'd be onto a winner. At Peak we now have over 500 all 5 star reviews. Probably something to do with the service we offer as well as the free beer and office puppies.
Remortgages are a delight compared to purchases, especially when there's a related sale. Find a mortgage broker who can do all the heavy lifting and will keep you up to date with every step of the process. They'll even check if it's worth staying with your current lender first and then it's as easy as it can get. If remortgaging ensure you select an independent solicitor wherever possible and avoid the free legal service that some lenders provide. That's where hold ups happen and with the massive firms the lenders appoint it can be like getting blood from a stone to get an update. Appoint your local conveyancer or one that comes highly recommended and nine times out of ten it will be a walk in the park.
Lenders have made significant improvements in this area with automated valuations and automated income verification for stable incomes, which has resulted in instant mortgage offers for some remortgage applications. That being said there is still more that can be done to make the process more streamlined and a large part of that I believe can be done on the legal side of the application. We can't get away from the fact that lenders need to complete a fair amount of due diligence before they depart with hundreds of thousands of pounds but more can be done to make existing data more easily available & accessible so that borrowers, brokers and solicitors don't have to generate new information for every transaction that takes place.
Poor remortgage customer experience comes from poor customer service. We are a fully 5 star Google Review rated, but that didn't come without hard work and dedication. It is true that all mortgage lenders have different approaches, and it can be vastly complex, time consuming and stressful arranging your own remortgage. Why put yourself through that? How much is your time worth? The key is to find an outstanding mortgage adviser who you trust and feel comfortable with. Expert advisers, pride themselves on providing excellent customer service through an informative, transparent and trust based approach. They will likely charge a fee, because generally speaking, you get what you pay for, but you will reap the reward back 10 fold through expert advice on your broader financial circumstances, getting the best deal for you, and enjoying a stress-free professional service that allows you to get on with your day.
The vast majority of people don't actually understand what is involved; it's not as easy as moving from one lender to another; the new lender has to also carry out stringent checks for the borrowing they are about to do but compared to the purchase process it's in most cases half the time unless there is something quirky such as leases or parties being removed from the mortgage. What could be gotten rid of is free legals as there seems to be this thing that being free is a USP in most industries it's only a USP when there actually isn't a USP for the business, if lenders offered cashback and allowed clients to pick their own legal representative this should remove the bain for most borrowers but this comes at a cost as most cashback deals never exceed £500 and anything free or low cost won't be a Rolls Royce and we shouldn't even think to expect a great service if it's free is the mindset most will have where the legal side of the remortgage process is involved they just want to know there is someone with a pulse dealing with the transaction but that is not to say all legal firms who do free legals are bad just the majority have to take on such volumes to survive any form good service can disappear.