Between April and May, the network reported a 40 per cent rise in the number of brokers searching for lenders that will offer a remortgage within six months of homeownership.
In such a rushed property market, L&G’s head of mortgage transformation and operations Clare Beardmore says there’s many reasons behind the rise in searches.
“It could be that borrowers have bought property in the stamp duty-free period and benefitted from the increase in property prices and seen their loan to value drop due to the buoyant market,” said Beardmore. “And they’ve opted to remortgage to one of the many low rates currently available on the market. Equally those looking to remortgage to raise capital have opted to release equity due to the increased property value before they have owned for six months.”
David Baker, managing director of Lift Mortgages, said he’s handled around five quick turnaround remortgage deals from homeowners who needed to switch lenders after their ported deals ended not long after they had moved in.
“The stamp duty holiday has got everyone thinking about moving and in some cases six months earlier than they had planned to,” he said. “My clients have ported their mortgage deals to avoid triggering an early repayment charge and then when the deal has expired some months later they need to remortgage their new property.”
Baker said it’s important to pick the right lender because not all are comfortable remortgaging a property that the owner bought less than six months ago. It raises suspicions of money laundering. His preferred lender in these cases is Barclays. “Barclays will do the remortgage from day one and they have great rates,” he added.
Dale Jannels, managing director, Impact Specialist Finance, said he’s dealing with day one remortgages for families who have inherited property during the pandemic.
“I’ve had two cases where property owners have died during the pandemic with outstanding mortgage debt on the property.
“Probate is completed but the property might not be in the client’s name yet because of the outstanding debt. We then have to do a transfer of equity or an assent to property transfer so that it changes ownership. The minute the property is the client’s name they remortgage to pay off the debts or buy out siblings.
“Sadly I think we will see more of these cases as families lose loved ones in the pandemic and property changes hands.”