The Department of Business, Innovation and Skill has called for remortgage applications to be completed within seven days, but many lenders do not think this is a practical idea.
Many borrowers want to switch to residential or commercial mortgages that offer lower rates, but they can be frustrated by the length of time it takes for the new mortgage to be completed and would like this to be reduced. The Intermediary Mortgage Lending Association has said that 66% of brokers and 81% of lenders believe that is unrealistic to implement seven-day remortgages, says a LoanTalk.co.uk article from November 2016.
Lenders and brokers say that there are several issues that prevent them fulfilling quick mortgage switching. There are many risk assessment and regulation issues that need to be dealt with and these can take time, and there can also be delays in obtaining property valuations.
The executive director of the Intermediary Mortgage Lending Association said:
“Lenders and brokers both agree that balancing key parts of the approval process – such as getting valuations and fulfilling risk and regulatory requirements – will be difficult to reconcile with reducing switching time to just seven days.
“It is clear the industry believes reducing mortgage switching to such a short window is incompatible with responsible lending practices.”
Although borrowers would favour shorter mortgage switching times, lenders need to make sure adequate checks are made to support the lending process. The majority of lenders feel that carrying out thorough risk assessments are more important than the speed of the remortgaging procedure.