Let’s talk about the product switch opportunity
By Jon Cooper, Head of Mortgages Distribution at Aldermore
Give your clients all their options by including product transfers in your mortgage search, says Jon Cooper, Head of Mortgages Distribution at Aldermore
Product transfers have become a key part of the brokers’ tool kit when it comes to sourcing the right mortgage for your client.
It always makes sense to consider them alongside remortgages if you want to give your client the full picture of their mortgage options.
But now, there’s more reason than ever to consider your client’s existing lender when sourcing a new mortgage, as the financial impact of Covid continues to affect some borrowers’ mortgage eligibility.
And there are specific circumstances in which product transfers are particularly useful, such as:
Changing client circumstances: If they have lost their job since they last took out a deal, moved to a lower paid role, or benefitted from government support schemes during Covid, your client’s mortgage eligibility may have changed, making it even more important to check their product transfer options.
Credit blips: Life can get in the way of even the best laid plans. And this has certainly been the case in the last 18 months. As a result, we'll see more clients with blips on their credit record, restricting the mortgages they can access and making product transfers a sensible alternative to consider.
Client doesn’t want to remortgage: If your client is too busy to deal with the extra admin, or they need to switch quickly, they might be wary of remortgaging. A product transfer is a quicker way to help them avoid SVR and lock into a fixed rate, without the extra forms and checks of a new lender.
Limited equity: Clients who originally borrowed at a high LTV could have limited equity if their property’s value has fallen, and therefore fewer remortgage options. But their existing lender should still be able to offer them a product switch, helping them avoid reverting to SVR.
Recognition for brokers
Whatever the reason you advise your client to take a product switch, at Aldermore we trust your decision, and we recognise your work with a competitive 0.30% procuration fee.
You’ve already put in the work before it comes to submission, conducting the fact find, sourcing across the market, and giving your client personalised advice based on their needs. It’s right that lenders acknowledge this work and make the submission process as easy as possible.
At Aldermore we’ve done just that, improving our product transfer proposition to better meet your needs.
Dedicated broker portal: We launched our broker product switch portal in February to make it really easy for you to switch your clients.
The process can be done in six steps, with no fees, credit checks or ERCs to pay if your client moves to a new product within three months of their renewal date.
Feedback from brokers has been excellent and, of course, we’ll keep listening and improving.
Lower rates: Earlier this year we cut our product switch rates to some of our lowest ever. They’re available on all major sourcing systems, so you can easily find them along with remortgage offers.
Broker switch alerts: At Aldermore we believe in broker advice, so we’ll give you a heads up around four months before your client’s rate is ending, with their original application reference number, name and renewal date. We’ll make sure you get this email before we send the customer’s maturity letter out, which also directs them back to you.
The product transfer market is more than twice the size of the remortgage market, and predicted to grow further, according to UK Finance forecasts (382kb pdf).
But direct business still dominates this sector, so there’s a significant opportunity for brokers to grow their market share.
By contacting your clients in good time to secure their next product, and checking product transfers as well as remortgages, you can ensure they get the right mortgage for their needs, from across the whole market.
At Aldermore, we know your clients will do best with a range of independent market advice, and we always signpost borrowers back to you. If a product switch turns out to be the right option, we make the process as easy as possible.
That way your client gets the best advice and you get to grow your business and retain your client for future renewals.
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