Broker advice and lender product withdrawals

Communication is the key given the speed at which things are moving right now. This is mortgage madness. Lenders need to be honest and give sensible timelines to allow us to get the right deal for borrowers. Getting an email at 16:30 saying rates are changing tonight at 22:00 is not helpful. For borrowers, it has never been more important to get all requested documents over to your broker as quickly as you can and, most importantly, in the correct format. This will ensure that your case is loaded correctly and can get reviewed properly with no delays or risk that the rate will rise. This is hugely important, as it only takes one missing document or something that's not in a format the lender requires and it can have a massive impact on the speed of your mortgage.

We're seeing more and more cases where lenders are pulling their products with little to no notice. Previously, this was the bane of our lives. However, with the speed at which the economy is changing at the moment I can't really blame them for the decisions being made. In the months to come, this will likely be a daily occurrence so borrowers really can't afford to sit and dwell on a proposed deal. They need to be acting with speed and trusting the advice they are receiving from the broker they intend to use.

Last time I saw something like this was when Covid hit. Lenders pulling out like nobody's business and heading for the hills. The biggest concern right now is that lenders will retreat from high LTV loans if we keep seeing predictions of housing market crashes. My current advice to borrowers is to not mess around, get all your documents ready asap as rates could go up or get pulled entirely at a moment's notice. I've never seen anything like this.

Residential Mortgage lenders could learn a huge amount from the equity release market. If a lender is withdrawing a deal, they email all brokers the day before to give us 24 hours' notice. We can then create a Key Features Illustration on the lender's website for our client, which reserves the lower rate. If the client decides to proceed with an application, the lender gives us two weeks to complete the application on their system using the reserved KFI. It's simple, broker and client friendly and much less stressful than residential lenders make the process.

To a large degree, we have of course experienced similar issues during the 2008/2009 economic crisis. I would predict that these lender product withdrawals will last for a few days whilst they reprice the products. Whilst borrowers may feel the need to act, there really is no need to panic. Seek independent mortgage advice and ensure that all decisions are made with all of the necessary information. Whilst in the past, many borrowers might have been mainly concerned with monthly costs, most will now look at stability and consider what will happen to rates over the coming months and years.

Digital Mortgages (Atom Bank) has just withdrawn all products for new clients. This was as of midday Tuesday and the email was also timed for that exact time, so no notice give to brokers. That's where we're at and it just isn't cricket.

It's like an avalanche at the moment, with lenders pulling rates by what seems like every hour. The decision by the Government last week was reckless and to his credit Rishi Sunak did warn about the consequences of tax reductions and going in hard and fast during his campaign to be elected as Prime Minister. Borrowers need to speak to a mortgage adviser now to save them long-term pain on being stuck on a lender's SVR. I have never seen anything like this and other professionals that have been in the industry for over a decade have not experienced this before either.

In a Covidesque way, the mortgage market changed quickly yesterday with several lenders withdrawing products from the mortgage market. However Covidesque, only as in the speed of the events. Our message is clear: Keep Calm & Seek Advice Despite lenders withdrawing from the market, they are simply re-pricing. The mortgage market is NOT disappearing as in 2008 or even as it did with some lenders during early Covid. Banks are keen to lend, albeit at new rates. As brokers, we appreciate the lenders that mentioned a 're-pricing' in their rate pull emails. Those lenders that only suggested a withdrawal, this wasn't helpful to the market and only adds to the anxiety of borrowers playing into the media's hands. It is important to add, some lenders are perfectly happy to re-price and carry on with business as usual, but being one of a few lenders in the market would generate an unmanageable volume of applications, a position they do not want to be in. This encouraged some lenders to follow suit yesterday. When your clients are concerned about what to do, seeking advice on their personal situation is the best advice you can offer. These withdrawals are temporary with lenders coming back today and others just busy doing the work required, deciding at which price point to come back into the market at. "The important message, to avoid panic amongst buyers, is lenders are 're-pricing' not withdrawing, an activity which happened countless times this year. Lenders are still lending, albeit at higher rates so seek advice, find out your options, and carry on."