This follows a Mortgage Solutions investigation into the Help to Buy equity loan remortgage market which uncovered a lack of interest from lenders to offer remortgage products and poor service from the HCA and its administrator Target in helping people to switch.
However, Mortgage Solutions understands that a group of industry representatives has been meeting with the HCA to discuss action to ensure a healthy, competitive market for borrowers.
One of the main actions is expected to be a HCA-produced factsheet for Help to Buy Equity Loan customers who are approaching remortgage.
Provide direction
Legal and General Mortgage Club new build manager Craig Hall (pictured) said the factsheet will help provide direction for customers about their remortgage options.
“Some people may be in a position where their circumstances have improved and they can buy themselves fully out of the equity loan,” he said.
“Some people may be not quite in that position but may be able to make partial redemptions of the equity loan, so in essence to staircase out of the agreement.
“For others it might be a case of getting a better rate with another lender, and therefore they just need to switch to a new lender – a straight like-for-like remortgage.
“Those will be some of the questions and answers,” he added.
It is also likely to include information such as which fees are applicable and in which scenarios they apply.
For example, this could include whether a Royal Institute of Chartered Surveyors valuation is required or not.
Hall added that the L&G Mortgage Club would send the factsheet to all its members as soon as it was available.
A better market
The Council for Mortgage Lenders (CML) has also been working with the HCA on the subject.
CML spokesman Bernard Clarke said: “There are plenty of opportunities for borrowers to remortgage with their existing lender, but it would be a better market if they could also remortgage more easily with other lenders.
“So we’ve been talking with our own members about what they think is necessary to facilitate that more effectively and relaying that on to the HCA.
“The HCA is now working on this and it’s up to them to take on board lender concerns so we can work toward a shared objective to improve the ability and choice for customers with a Help to Buy Equity Loan to remortgage.”
He added: “We are expecting something back from HCA over the course of the summer. That’s really the next step and we’ll take a look at whether that addresses the concerns or not.”
Mortgage Solutions contacted the HCA about its work on the subject but has not received a response.
