Solutions to solving tricky remortgage cases

Steve Walker - Promise Specialist Lending
11th May 2018
"Shifting economic landscapes and increasing levels of personal debt now mean that brokers are more likely than ever to encounter scenarios in which they struggle to place a remortgage."

Recent lending figures from UK Finance have established that the demand for remortgages rose to a nine year high in January with 49,800 new homeowner deals completed over the course of the month, representing a 19.1% increase on numbers from January 2017.

Figures for February demonstrated a similarly buoyant trajectory meanwhile, with 35,400 new homeowner remortgages completed overall at a 11.3% increase on the same month in 2017- a remarkable start to the year. Levels of consumer demand have been steadily mounting within the sector for the past eighteen months or so now, with data provided by the conveyancing firm LMS confirming that re-mortgage volumes rose significantly throughout the last year, expanding from 28,400 in December 2016 to 39,943 in the same month for 2017- a 41% year-on-year increase.

Moreover, with growing numbers of customers looking to access competitive rates in advance of near certain interest rate rises or to renew buy-to-let deals taken out in the wake of the governments second home surcharge, it seems safe to suggest that these rates should remain stable for the foreseeable future - a measure of the success that this industry has enjoyed in recent times. However, as with any success story there is a proviso.

Shifting economic landscapes and increasing levels of personal debt (arising from generally adverse credit scores, arrears on existing deals, defaults, bankruptcies, tax burdens and limited incomes) now mean that brokers are more likely than ever to encounter scenarios in which they struggle to place a remortgage. Which is precisely why firms and individuals should start to think seriously about instituting ‘go-to’ problem solving documents or other corresponding systems to help brokers approach and solve cases where no immediate solution presents itself. For example, some specialist master brokers (such as Promise) routinely provide their brokers with a two-page document detailing a range of second charge solutions to everyday problems relating to poor credit, complex income scenarios, property types and much more.

There are organisations making a good living from converting the marginal cases many mortgage brokers turn away. Whilst a busy broker may not have time to get involved in such cases it surely makes sense to develop the knowledge and process to quickly identify opportunities and thus build up a latent income stream and an improved customer retention strategy. After all the customers you assist today, even via a referral, will be customers tomorrow. You may even decide to incorporate some of these new products in to your core offering. Simply put, with incidences of credit almost certain to grow in the years to come, now is the time up skill yourself on the many solutions out there.



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