There’s a remortgage boom on the horizon. With rates low, house prices rising and personal circumstances varying dramatically, 2022 is set to be a bumper year for mortgage brokers and advisers alike.
With one eye on the busy months ahead, it’s time to start preparing your clients for the remortgaging process. Here’s our advice on how you can get the best rates for your customers and what they can expect from the remortgaging process in the current situation.
While October of 2021 has been a busy month for remortgaging customers, 2022 – and specifically January – is set to be far busier.
With so many personal circumstances changing dramatically over the last 18 months as a result of the pandemic, brokers need to be prepared for a deluge of remortgage applications starting in the new year.
With interest rates low, circumstances dramatically changed and homeowners looking for the best financial options, now is the time to start planning ahead for a busy year to come.
There are a few different reasons why 2022 is set to be such a bumper year for brokers and advisers.
The first and most obvious reason is, of course, the pandemic. Many of your customers may have lost their jobs, are needing to commute less, have re-evaluated their budgets or have decided now is simply the best time to look elsewhere. Whatever the reason, Covid-19 has touched everyone and this is driving substantial changes in people’s lives.
This change is coinciding with an already busy mortgage maturity peak. Billions of pounds’ worth of mortgages are due for renewal throughout 2022, with January set to be one of the busiest peaks of the entire year.
And, with mortgage rates currently low – some are even below 1% – now is a great time for many of your customers to look at remortgaging. There is a perfect storm brewing, so it’s time to start preparing for the busy months ahead.
Potentially, a lot of lost business. In order to maintain responsible lending, lenders will need to re-evaluate the changing circumstances of borrowers, particularly those who have lost employment.
It may be the case that where 12 months ago one of your clients may have been accepted for a mortgage, they may find it much more difficult today to get refinancing. This could mean that many of your clients look for another broker to improve their options.
Brokers are most likely to lose clients to direct competitors when clients come to remortgage.
If your customers don’t think you’re capable of getting the right deal for them, or think other brokers stand a better chance of getting the best remortgage rates, you could lose a lot of customers. To make sure that doesn’t happen, it’s time to get prepared, and to start contacting some of your customers if you aren’t already.
2021 saw notable house price growth in almost all parts of the UK, and there’s little sign of this slowing down in the next 12 months.
Both house prices and rents are expected to continue rising throughout the coming year, so there are more incentives for many of your customers to sell and look elsewhere. This is only being compounded by low interest rates on mortgages.
By deciding to refinance in the next few months, many of your clients could find themselves making big savings, so if you can act in your client’s best interests and save them money, you should be able to retain many of these valued customers.
The flip side is that criteria for getting some of the best remortgage rates have tightened. If you’ve been on furlough, received income or any other Covid-related relief, you could find it much more difficult to get these rates.
As a mortgage broker, your clients are looking to you for the best advice. There will almost certainly be extra paperwork, and lenders that are doing their due diligence could insist on tighter assessments criteria.
So be clear with your clients, remind them that it is about getting the best deal possible, rather than the best deal around, and work closely with them over the next months as lenders may well have tightened their purse strings.
So, with a remortgaging boom on the horizon and highly changeable circumstances driving lots of people to consider refinancing options, it’s important for brokers to take steps now to avoid casework jams in the future.
Contact your customers: It’s fairly standard to contact customers three months ahead of their mortgage renewal dates, but make sure to get ahead of the curve and get in touch with them early.
Be comprehensive: As mentioned above, billions of pounds worth of remortgaging is going to be taking place in January, and lenders doing due diligence will be paying additional care to the financial situation of borrowers. Be clear with your customers and pay closer attention to their personal finances, specifically if they were on furlough or received income support.
Be realistic: Remember that you can only get the best rate possible for your customers, not the best rate there is. For example, it is difficult for those who are self-employed to get mortgages and it can be even more difficult to complete a remortgage. If you think you get help save your customers money, do so, but your role is also to give sound financial advice. Be realistic with your customers on what can be achieved and how you can help them.
Show your expertise: Whether it’s through your own knowledge or having consulted various different experts, make sure you can answer questions about the future direction of the property market. Be prepared for lots of questions and hesitation about future interest rate changes as well. After all, they can’t go much lower.
Use the right tools: Whether you’re assessing your customers’ circumstances or consulting with lenders, use the right digital tools to make sure you’re comparing and getting the best rates.
Customers need mortgage brokers they can trust. In what can be a complex and, to some people, overwhelming field, customers are looking for brokers they can trust who can get them the best remortgage rates and help them navigate the financial world. To find clients in need of your services, join Unbiased today.