Interest rate savvy borrowers beat lenders at their own game – JLM

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When it comes to the mortgage product landscape, the summer of 2021 has been an ever-changing one. And there doesn’t seem to be any sign of slowing down.

Product updates, price cuts, withdrawals, new launches and, to a lesser extent, changes in criteria, etc.

In mid-August, Moneyfacts suggested that a mortgage product’s shelf life was only 21 days. As of this writing, it may well be shorter than that, such is the never-ending cycle of change and the demand to continually respond to it.

Clearly, when it comes to rates, and the downward pressure on them, this is great news for borrowers. However, since the service standards of many housing market participants, such as lenders, transport agents and surveyors, are not particularly high, this also tends to mean a significant increase in the workload for all. .

The point is, three or four weeks ago the top market rates looked very different from what they are today.

Secure the best deal

Customers are much more price savvy and aware – if they see that a better rate has been introduced since they booked their first rate, they will want to know from their advisors if they can get the best rate.

And that’s how it should be. Advisors are also watching their most recent recommendations closely because it is likely that with such long completions the rate will have come down and the borrower should be moved.

Indeed, the rates are likely to change three or four times during this period when the mortgage should go to its term.

However, it is strange to hear some lenders complaining about this process and then having to change the rate, when they “have already reserved the money at the previous rate”.

“It creates more work for us” comes the refrain, to which we would respond that if the service could be sped up, then the finishes would be done at the original rates before they were changed, and the new rate was requested.

Some give the impression that it is the fault of the borrower or the advisor, when it would be strange if the latter did not want to try to give his client the best rate when it becomes available.

The constant slicing and changing of rates makes this a lifelong experience for advisors and borrowers, where the rate booked is not necessarily the one that will be topped up and lenders need to look at the money originally set aside at the previous rates and I wonder why he doesn’t stick to those rates?

Focus on completion deadlines

The answer lies in the time it takes to complete, and the predilections of lenders for the constant exchange of rates during this period. We understand that they have to react to the competition and what the market is doing, but then complaining about the work it takes for them as a result of this approach seems like irony.

Rates, especially on certain securities loans (LTVs), are now as ultra-competitive as they have ever been.

Should the lenders continue to fight against each other here or wouldn’t they be much better to broaden the criteria and open up the market to those who are truly underserved? Rather than focusing on the few that are more supported?

We understand that this market has been and still is a busy market and that lenders have had to work on a high volume of business throughout the year, but they need to find an ideal point for services in order for business to grow. finish on time.

They should also recognize that if they change their rates and a borrower qualifies for a better one, it is our duty to advise to secure it for them. If this creates additional work for the lender, so be it.

Rory Joseph, Principal and Sebastian Murphy, Head of Mortgage Financing at JLM Mortgage Services


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