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Second best for borrower

ended 04. May 2023

A Newspage broker said the following last night on LinkedIn: “Recently a client called me to review a mortgage he had. No problem. As it turned out, the best deal was to remain with his current lender and make some changes to the mortgage. Not something I can do for him, so I explained this and even found the number of the department at the lender he needed to call. I’ve just had him call me back, two weeks later, and ask if I can remortgage him away from the current lender. I explained again that the current lender was the best deal. He then went on to tell me how, after umpteen phone calls, spending a total of four hours on hold, speaking to numerous people and being transferred from pillar to post, he was still no closer to getting it sorted. So, now we’re going to do a remortgage with the second lowest cost option for him, simply because his current lender can’t get their act together." Any thoughts on this, e.g. how could it even happen, have you experienced the same and is it common - or an outlier - in your experience?
 

4 responses from the Newspage community

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Editor
Riz Malik
Independent Financial Adviser at R3 Wealth
In certain instances, lenders require direct communication with clients instead of coordinating with brokers. When clients experience this firsthand, they often gain a deeper understanding of the challenges brokers face regularly, such as waiting for several days to receive a response from a lender via phone call or email. Providing clients with the option to delegate these interactions to their brokers could be beneficial. Ultimately, the choice to involve a broker in such matters depends on an individual's assessment of their time's value and whether they deem the potential fees for this supplementary service to be a sound investment.
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Jamie Lennox
Director at Dimora Mortgages
Many mortgage brokers are often the cog in the wheel that keeps everything moving smoothly with mortgage and property transactions. Removing that cog out of the transaction, even though the wheels may still be turning, the process isn’t working as efficiently as once before. We had a case last year where a client wanted to borrow extra money while they were midway through their fixed rate. Again, it was most cost-effective to arrange this with their existing lender. However, this couldn’t be done via a broker and our client had to go direct, which was described as a “living hell”. They were appalled by how painful the process was.
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Gary Bush
Financial Adviser at MortgageShop.com
This story, in itself, tells you all you need to know why the UK currently sees 80%+ of lending being processed via financial advice firms. During the lockdowns of the pandemic, broker firms were upping their game and becoming slicker, while the lenders, well certainly a lot of them, were doing the polar opposite. It's a fact that actually getting anywhere near a discussion with a decision-maker at a UK lender is now almost impossible in most cases for financial advisers.
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Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
Sadly, I often find that the lenders have really slick systems for getting new business and even now retaining business with things like product transfers, but when you try to do something beyond that it gets a bit hit-and-miss. If you want to port a mortgage or do a further advance, many lenders still don't have broker led systems for doing this; many still use paper application processes and a few will only deal with the customer directly; but at least it can be done. Once you step beyond that and want to do something like; amend the term on a current deal, add or remove a borrower, change the repayment method, or switch a property from a residential to a buy-to-let (or vice versa) then the wheels truly do come off most lenders wagons. Front-line customer-facing staff seem to have little or no knowledge of how these things are done, it's down to blind luck that you or the client happen to call and speak to someone with the experience and knowledge to help.