Your remortgage clients really need you – Mortgage Strategy
As 2023 gets into gear, advisers — and many trade bodies/industry commentators, etcetera — anticipate this year will be heavily focused on remortgage business.
Recent research from Paragon appears to bear this out. Of 350 mortgage advisers surveyed, over three-quarters said remortgaging would be the ‘strongest driver’ of their business throughout 2023; in second place was buy-to-let remortgaging.
The remortgage should be the jumping-off point
It will therefore not need a genius to work out where advisers think the bulk of their time will be spent this year. And no doubt this business anticipation has been heightened by recent events, not least the fact we appear to have moved into a new phase in terms of mortgage product pricing.
Most years are big ones in terms of remortgage maturities, not least because the vast bulk of customers are coming to the end of special rates every two/three/five years. If that is the case in 2023, undoubtedly they will want to use the services of an adviser because the environment is likely to look very different from the one in which they last remortgaged or mortgaged.
Last year, UK Finance figures suggested more than 1.8 million borrowers would be reaching remortgage maturity in 2023. That presents a significant opportunity for advisers, particularly as — we are led to believe — the advice sector is responsible for over 80% of all mortgage sales.
Advisers are in the best position to provide all of this
It is, however, not plain sailing for borrowers. Rate rises coupled with cost-of-living increases, against a backdrop of incomes not moving as fast, mean it may not be as simple as many existing borrowers have got used to when seeking a new product or lender.
However, hopefully (during their last mortgage period) they will have benefited from an uplift via increased house valuations, putting increased equity into their hands, which they can potentially utilise to secure better-priced, lower-loan-to-value products.
The other point to make here is that no adviser should be looking a returning client gift horse in the mouth. If, as anticipated, there is less purchase business walking through the door, there should be ample time, resources and energy to explore a returning client’s finances to the full.
A lot is likely to have changed for the client in the past two/three/five years, and this shouldn’t be just about the opportunity to secure further home finance for them but also a chance to review all other aspects of their financial circumstances.
More than 1.8 million borrowers will be reaching remortgage maturity in 2023. That presents a significant opportunity for advisers
Whether that is their existing general insurance, protection or legal services needs, or ensuring they have access to proper legal representation via their own conveyancer, the remortgage should be the jumping-off point for advisers to ensure they dive deep into all returning clients’ finances.
We’re all acutely aware that the Consumer Duty rules will be with us before we know it, and providing positive outcomes for all clients across the product/-services spectrum will certainly chime with what the regulator is now requiring of firms in this area.
Plus, by ensuring remortgage clients are not left to flounder in some of the ‘free legals’ offerings currently available, advisers will be giving them the very best chance of completing within the desired timescale. They can also secure further income on top of what they get for the procuration fee/commission, etcetera.
It may not be as simple as many existing borrowers have got used to when seeking a new product or lender
In a market that can suffer some serious fluctuations, and in which borrowers have missed out on their mortgages because of process delays, being able to deliver this greater level of certainty will undoubtedly be welcomed by all those seeking to tie down their remortgage as quickly as possible.
Advisers are in the best position to provide all of this — and then some.
Mark Snape is chief executive of Broker Conveyancing
This article featured in the February 2023 edition of MS.
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