'Don't let your remortgage clients hang about' warning

Mortgage advisers are being urged to act swiftly on behalf of clients who may need to remortgage.

Thousands who are sitting on their lender’s standard variable rate are likely to have difficulty in securing remortgage finance due to changes in their circumstances and significant changes to lenders’ lending appetite, their product criteria and policies for determining credit-worthy applicants. 

The warning, from Paradigm Mortgage Services, comes amid speculation of a rise in base rates and house price falls in many regions.

Paradigm believes borrowers could have less equity in their properties than they anticipate, which will mean a higher LTV product is necessary with potentially higher monthly mortgage payments.

Bob Hunt, chief executive of Paradigm Mortgage Services, said: “Unfortunately, many borrowers will be re-entering a mortgage market which is much changed from the one they last encountered two or three years ago. Many potential remortgage borrowers may struggle to secure a mortgage in this environment.
 
“This situation could also worsen as many borrowers will be waiting for an actual interest rate rise before they make their move. At this point, demand for remortgages may be overwhelming and there is no doubt that many will be left disappointed.

“We are therefore urging all mortgage advisers to make sure their potential remortgage clients are clued up on the current state of the market and fully informed about their ability to secure finance. 

“Beating the remortgage rush may well be advisable, given what could be coming over the horizon, and advisers should ensure they are in a prime position to deliver all the necessary help and support, which could make the difference between their clients securing a remortgage loan or being left on the SVR shelf.”