Mortgage Solutions’ poll asked brokers if they felt remortgaging was becoming a more labour intensive process than purchase applications.
The majority, 66.2 per cent, agreed that remortgaging was becoming a longer, more drawn out process.
As Mortgage Solutions has reported, the average time for completion – without complications – stands at 22 weeks, according to TwentyCi. This is a lengthy time that brokers claim makes moving house the third greatest life event stressor, second only to death of a family member or spouse, and divorce.
Research also appears to suggest that many borrowers believe the remortgage process is not fit for purpose with as many as one in five abandoning remortgaging due to delays or other frustrations.
There are many reasons why remortgaging has become more labour intensive, according to brokers. A perfect storm of rising interest rates which are encouraging more borrowers to switch, a lack of property supply which is driving an increase in borrowing for home improvements, and not least of all expectations of the remortgage process itself.
Brokers may need to dispel the taken for granted assumption that a remortgage involves a quicker, less complex process than taking out a purchase mortgage.
Jane King, a mortgage and equity release adviser at Ash-Ridge Private Finance, said advisers needed to be upfront with clients.
She said: “We still have to provide and advise and carry out the same extensive research and administration whether they are doing a straightforward product transfer with their existing lender or switching to a new one.
“Therefore, I would say yes, it does take the same amount of time as a purchase. We still have to justify the reason for the remortgage and take into account future objectives and circumstances.”
The rush to remortgage has also highlighted ongoing admin issues, with brokers believing more can be done to streamline the mortgage application process.
Robert Payne director at Langley House Mortgages said repetition of information was “probably the most unnecessary delay in the process of remortgaging”.
He said: “A large part of this is the information required by the solicitor to be able to switch from one lender to another. On the mortgage application side I can understand that up to date information such as income proof is necessary but if there was a way in which circumstantial evidence could be shared from previous applications that would save a lot of time.”
Making remortgaging easier – centralised platform
Payne believes one solution could be in having the process on a single platform. “This may sound farfetched but it would be great if there was a centralised system for each individual which contained necessary information to be able to underwrite them rather than the client having to produce the information themselves.”
Sabrina Hall, a mortgage and protection adviser at Kind Financial Services, blamed a combination of lenders’ service levels, solicitors’ service levels and valuation delays. She said: “I’ve been contacting all my clients well in advance of their deals ending to try and counter these delays but it’s still frustrating for clients and adds to advisers workloads due to additional chasing.”
Samantha Bickford, mortgage and equity release specialist at Clarity Wealth Management Remortgaging believed the volatility of the property market itself has exacerbated logjams with the remortgage application process.
She said: “The property market is still chaotic so with moving unaffordable, or proving difficult to find the right property with the sheer demand of buyers, home owners look to remortgage to unlock some of the equity in their property to get their existing property to fit their dream home requirements.”
“The demand on lenders and valuations is making remortgaging more labour intensive. There is around a three week wait for valuations currently so ‘quick remortgages’ are currently a thing of the past until the general demand on the market slows.
Her solution is for lenders to embrace remote valuations. “That would help with this delay,” she added
Lewis Shaw, founder and mortgage adviser at Shaw Financial Services, said time spent on surveys and valuations were also placing a burden on the process.
“On top of that, you have the constant and age-old problem of getting the documents required in the correct format from a customer upfront all at once.
“People forget that remortgaging is the same as buying a new home; you’re taking out a brand new mortgage; the only difference is that the legal aspect is much shorter and less involved. For mortgage purposes, you have to treat it as when you took your first mortgage, becuase the requirements and due diligence are precisely the same.”
Nick Mendes, mortgage technical manager at John Charcol has sympathy for lenders.
“They are trying to balance new rates and where to position themselves in the market, as well as managing new and existing cases, keep on top of current economic and global factors, manage expectation and communication between solicitors and valuers.
“This is no easy task at the best of times,” he said.
Mendes believed brokers are not entirely blameless and they can ‘do their bit’ to ease the process.
He said: “How brokers package their cases is vital in ensuring how the case progresses without issues, whether this be understanding the lenders criteria in respects to the application or when submitting ensuring you have all the documents to provide straight away. Several lenders have cited the time wasted in chasing to request the basis information.”
Mendes agreed that desktop valuations could ease the pressure off surveyors and reduce their timescales. “And an automated valuation model (AVM) will also allow a fully packaged case to progress to offer a shorter period of time.”
He also advised brokers to follow up wherever possible. “Some lenders are happy to go through an application on a phone call, or , discuss packaging requirements, and any tips on common errors or issues they are facing.”
Mendes also singled out Halifax business development manager Terry Cade, as “being great in setting time aside on a weekly basis to go through cases, questions on future cases and sometimes having an underwriter to go through application to help speed them along”.
Other shortcuts include trying to speed up the AVM process if the client already banks with the lender. “This is not always an option but if the client has a bank account with the lender and is also taking out a mortgage with them then the lender can auto verify the income on the decision in principle (DIP) and application to then save time in uploading.”
Brokers should also consider how they use support staff. He added: “Most brokers will have client relationship managers to help support the broker and client with the application.
“Time is wasted on their part calling waiting on hold, to get updates on cases or multiple cases, so having a clear line of communication to provide update on several cases at once would be a game changer.”
