Mortgage product switching - Attempt to end it!

[Casa1862]

I've always done a mortgage switch, done in five minutes, looks like the Mortgage Broker industry think that's bad for us, I wonder why???

https://www.mortgagestrategy.co.uk/product-transfe...

Edited by Casa1862 on Monday 5th December 17:12

[Sarnie]

Casa1862 said:

I wonder why???

It says why in the link............ "“Customers face potential detriment as a straightforward product transfer does not always trigger a revaluation, affecting LTV, rate and affordability"................“The worry that we have at AMI is that lenders are pushing people into taking these deals on a non-advised basis where other factors won’t be taken into account”.

[Casa1862]

Sarnie said:

Casa1862 said:

I wonder why???

It says why in the link............ "“Customers face potential detriment as a straightforward product transfer does not always trigger a revaluation, affecting LTV, rate and affordability"................“The worry that we have at AMI is that lenders are pushing people into taking these deals on a non-advised basis where other factors won’t be taken into account”.

Then change lender or get advice and go through the full process, you have a choice, why take the product switch away from a lot of people already on max LTV. Remember it can work the opposite way, if you're in an area where prices are falling or stagnant.

This is clearly self interest and nothing more, fair enough but don't try to justify as anything else. A lot of people won't be able to re-mortgage at reasonable rates and this is just a way to get a nice fat fees from “Specialist” lenders at 6%!

[Sarnie]

Casa1862 said:

A lot of people won't be able to re-mortgage at reasonable rates

Why is that?

[Casa1862]

Because there are lots of people who took mortgages pre MMR and now would never be able to get the same mortgage amounts, why would you want to go through sitting with a broker for two hours with them going through every detail of your life (and paying for it) when you could do it with a few clicks or a phone call. If they can't get the amount they need, due job change, self employment etc then your friendly broker will find them a deal just at a silly rate.Now days, rates are so close that it makes next to no difference to move, lenders are getting wise and offering better deals to retain customers, this has more to do with the likes of Nationwide no longer giving brokers a cut and offering the customer a £250 bonus, nothing but brokers crying they are losing customers, it's happening in every industry so get used to it.

This will backfire if it ever comes about as it will force a lot onto SRV and brokers won't see them anyway, if we get a drop in prices which could happen then the comfort of a product switch has been removed, are you not seeing that, how can it be a benifit?

Edited by Casa1862 on Monday 5th December 21:10

[brianthemagical]

I'm pretty sure the fee I paid my broker on mortgage inception lasts for the life of the mortgage.
If he gets a bonus from the mortgage company every time he sorts out my re-mortgage then I don't see the issue.

[Casa1862]

brianthemagical said:

I'm pretty sure the fee I paid my broker on mortgage inception lasts for the life of the mortgage.
If he gets a bonus from the mortgage company every time he sorts out my re-mortgage then I don't see the issue.

If he gets a fee then fine, this forces you to be reassessed under the new rules. It would be an issue if under the new MMR rules you are no longer eligible, even with the same lender, product switching provides a safety net, move if you get a better deal and are prepared to put up with the hassle and eligible or stay put and do your own research and move to another product, with a few clicks, why is this bad for anyone?

[Sarnie]

Casa1862 said:

Because there are lots of people who took mortgages pre MMR and now would never be able to get the same mortgage amounts, why would you want to go through sitting with a broker for two hours with them going through every detail of your life (and paying for it) when you could do it with a few clicks or a phone call. If they can't get the amount they need, due job change, self employment etc then your friendly broker will find them a deal just at a silly rate.Now days, rates are so close that it makes next to no difference to move, lenders are getting wise and offering better deals to retain customers, this has more to do with the likes of Nationwide no longer giving brokers a cut and offering the customer a £250 bonus, nothing but brokers crying they are losing customers, it's happening in every industry so get used to it.

This will backfire if it ever comes about as it will force a lot onto SRV and brokers won't see them anyway, if we get a drop in prices which could happen then the comfort of a product switch has been removed, are you not seeing that, how can it be a benifit?

Edited by Casa1862 on Monday 5th December 21:10

You obviously have a beef with Brokers and/or the mortgage industry.....not sure why.........you seem to think that the removal of product transfers would be met with "crying brokers who are losing customers".......and that it's all a big conspiracy of brokers to churn clients and earn money from them by moving them to new lender.

For reference, the vast majority of lenders offer product transfers that can be done via the broker and the lender will pay the broker the same procuration fee as if it was a full mortgage application. The amount of work required to carry out a product transfer with a current lender is about 20% of that required for a full application, so from a workload point of view, keeping my clients witht he same lender is the easiest option.

However, as per the link you've provided, thats not always in the clients best interest. Contrary to the picture you paint, there are plenty of lenders who offer no retention products at all or if they do, they are often circa 0.50%+ behind whats available from other lenders. 0.50% may not be a lot, but to a client, especially if they aren't going to be processing the application and a broker will be doing it for them, they'll choose the cheaper product with the new lender......same payment to the broker either way but much more work to carry out the new full application but any broker that wants to exist in the current climate of regulation has to continue to conform to best advice. If I carry out a product transfer for a client, I have to evidence to the FCA that there wasn't a cheaper deal elsewhere. If I move them to a new lender, I have to evidence that there wasn't an equivalent product with their current lender. Anyone acting outside of that won't last long in the industry....

You've mentioned that you would no longer meet the requirements of a post-MMR lending criteria, but thats not any brokers fault so not sure what the issue is? If I come across a client who won't meet standard lending criteria then I have to revert to a "specialist lender" but not because they might pay more, but because they would be the only people who would consider it currently........again, I can't see how thats the brokers fault that the high street has stopped lending to that client?

[Casa1862]

Sarnie said:

You obviously have a beef with Brokers and/or the mortgage industry.....not sure why.........you seem to think that the removal of product transfers would be met with "crying brokers who are losing customers".......and that it's all a big conspiracy of brokers to churn clients and earn money from them by moving them to new lender.

For reference, the vast majority of lenders offer product transfers that can be done via the broker and the lender will pay the broker the same procuration fee as if it was a full mortgage application. The amount of work required to carry out a product transfer with a current lender is about 20% of that required for a full application, so from a workload point of view, keeping my clients witht he same lender is the easiest option.

However, as per the link you've provided, thats not always in the clients best interest. Contrary to the picture you paint, there are plenty of lenders who offer no retention products at all or if they do, they are often circa 0.50%+ behind whats available from other lenders. 0.50% may not be a lot, but to a client, especially if they aren't going to be processing the application and a broker will be doing it for them, they'll choose the cheaper product with the new lender......same payment to the broker either way but much more work to carry out the new full application but any broker that wants to exist in the current climate of regulation has to continue to conform to best advice. If I carry out a product transfer for a client, I have to evidence to the FCA that there wasn't a cheaper deal elsewhere. If I move them to a new lender, I have to evidence that there wasn't an equivalent product with their current lender. Anyone acting outside of that won't last long in the industry....

You've mentioned that you would no longer meet the requirements of a post-MMR lending criteria, but thats not any brokers fault so not sure what the issue is? If I come across a client who won't meet standard lending criteria then I have to revert to a "specialist lender" but not because they might pay more, but because they would be the only people who would consider it currently........again, I can't see how thats the brokers fault that the high street has stopped lending to that client?

I don't have an issue with brokers but I have an issue with the way the article is presented and anyone who might defend it, when MMR was proposed brokers were saying how damaging it would be now they want it applied to everything.
From the article:

"TMA Mortgage Club says lenders are increasingly contacting its customers to encourage them to take out a product transfer, often incentivising them by waiving ERCs and offering lower monthly payments."

Why is any of that bad for someone who is caplable of doing their own research and deciding themselves?

Everything you've said above is fine, consumers already have that choice, why make someone like me who is on max LTV, with a competitive high street lender sit through 2 to 3 hours interview and produce every bit of paperwork, pay a broker, wait for it to be underwritten when I can do it myself in less than two minutes? This will simply make life difficult and stressful for a lot of people and I think you know it.

Edited by Casa1862 on Tuesday 6th December 00:40

[aka_kerrly]

Casa1862 said:

"TMA Mortgage Club says lenders are increasingly contacting its customers to encourage them to take out a product transfer, often incentivising them by waiving ERCs and offering lower monthly payments."

Why is any of that bad for someone who is caplable of doing their own research and deciding themselves?

consumers already have that choice, why make someone like me who is on max LTV,

Edited by Casa1862 on Tuesday 6th December 00:40

Bold bits, so lenders' telesales staff (whom may have a basic mortgage qualification may have more) contacting customers telling them to switch to different deals from the same lender without any consideration for any of the alternative lenders in the market is to be seen as good?

Then factor in people who do their own research and almost always go looking for the max LTV.

And you think professionals like Sarnie are having a negative impact on the mortgage industry?

[Sarnie]

Casa1862 said:

Sarnie said:

You obviously have a beef with Brokers and/or the mortgage industry.....not sure why.........you seem to think that the removal of product transfers would be met with "crying brokers who are losing customers".......and that it's all a big conspiracy of brokers to churn clients and earn money from them by moving them to new lender.

For reference, the vast majority of lenders offer product transfers that can be done via the broker and the lender will pay the broker the same procuration fee as if it was a full mortgage application. The amount of work required to carry out a product transfer with a current lender is about 20% of that required for a full application, so from a workload point of view, keeping my clients witht he same lender is the easiest option.

However, as per the link you've provided, thats not always in the clients best interest. Contrary to the picture you paint, there are plenty of lenders who offer no retention products at all or if they do, they are often circa 0.50%+ behind whats available from other lenders. 0.50% may not be a lot, but to a client, especially if they aren't going to be processing the application and a broker will be doing it for them, they'll choose the cheaper product with the new lender......same payment to the broker either way but much more work to carry out the new full application but any broker that wants to exist in the current climate of regulation has to continue to conform to best advice. If I carry out a product transfer for a client, I have to evidence to the FCA that there wasn't a cheaper deal elsewhere. If I move them to a new lender, I have to evidence that there wasn't an equivalent product with their current lender. Anyone acting outside of that won't last long in the industry....

You've mentioned that you would no longer meet the requirements of a post-MMR lending criteria, but thats not any brokers fault so not sure what the issue is? If I come across a client who won't meet standard lending criteria then I have to revert to a "specialist lender" but not because they might pay more, but because they would be the only people who would consider it currently........again, I can't see how thats the brokers fault that the high street has stopped lending to that client?

I don't have an issue with brokers but I have an issue with the way the article is presented and anyone who might defend it, when MMR was proposed brokers were saying how damaging it would be now they want it applied to everything.
From the article:

"TMA Mortgage Club says lenders are increasingly contacting its customers to encourage them to take out a product transfer, often incentivising them by waiving ERCs and offering lower monthly payments."

Why is any of that bad for someone who is caplable of doing their own research and deciding themselves?

Everything you've said above is fine, consumers already have that choice, why make someone like me who is on max LTV, with a competitive high street lender sit through 2 to 3 hours interview and produce every bit of paperwork, pay a broker, wait for it to be underwritten when I can do it myself in less than two minutes? This will simply make life difficult and stressful for a lot of people and I think you know it.

Edited by Casa1862 on Tuesday 6th December 00:40

You are entirely (almost deliberately?) missing the point and just applying it to your own circumstances........the point of the article is to not remove the facility for people like yourself, but to stop less knowledgeable people being railroaded into quick fix product transfers with incentives such as waiving of ERC's...............when there are potentially better options available elsewhere........for every "experienced" client out there like you, there are a dozens others who have no clue, see a letter from their "friendly" current lender and go along with whatever they offer.........without realising the expensive mistake they are making.......