Product transfers: a real lifeline for brokers
Authored by Vida Homeloans
From a deadly pandemic to a global movement for racial justice, the year 2020 certainly experienced its fair share of world-shifting events, and it was on the 9th January when The World Health Organization announced that a deadly virus had emerged in Wuhan, China. In a matter of months, the virus spread across the globe and as at this week over 218 million cases have been recorded resulting in over 4.52 million deaths1.
Matt Hancock, the former health and social care secretary, claimed that the Covid-19 lockdown in the UK began on 16 March 2020, when he told the House of Commons that “unnecessary social contact” should be avoided and on the same day, Prime Minister Boris Johnson made a televised statement saying "now is the time for everyone to stop non-essential contact", referring to it both as "advice" and a "very draconian measure". However it was not until 23 March 2020 that Mr Johnson told people they “must” stay at home to save lives and said that "we will immediately" close businesses and that only the ‘essential’ business such as supermarkets should stay open.
With immediate effect, the whole industry came to a halt. No viewings could take place. No valuations could happen. No moving was allowed, and borrowers were furloughed - a term which none of us had heard of before. With no one knowing what was round the corner, mortgage intermediaries had to re-think how they were still going to service their client’s needs.
With no purchase transactions able to take place, brokers focussed on product transfers.
Product transfers have been a real lifeline for brokers over the past 15 months. They remain on the increase, with more and more brokers getting involved, rather than clients dealing directly with the lender. The challenge for brokers has always been that legacy systems weren’t built for broker-led product transfers and so can be clunky, with a great deal of manual intervention required, ultimately eating into the broker’s time.
While it is not a new concept, a product transfer is a lesser-known option which may be a good alternative to re-mortgaging, depending on your clients’ circumstances.
The product transfer process is typically very straightforward, due to being a simple switch of a product, with nothing else changing in terms of loan amount or property details. If your client is looking for a further advance or a remortgage, it is likely that a formal property valuation will need to be carried out, but with a product switch it doesn’t.
Vida has recently launched a new online Product Switch portal, which is a fully digital solution developed in conjunction with brokers. It provides tailored product solutions, offering the best options for the client and can be arranged in 15 simple clicks, taking less than 15 minutes to complete. With client needs changing to be more complex, specialist lending is becoming more mainstream, and Vida recognises the need for these product transfers to be easily transacted by brokers and fully understood by the customer.
After receiving incredibly positive feedback from both brokers and customers during its pilot programme, Vida is now able to offer the intermediary product switch portal to all brokers.
In acknowledgement of the time and effort intermediaries put into maintaining their client relationships, Vida will pay a procuration fee of 0.30% on every product switch completed.
For adviser use only. Please note this content has been supplied by our lender partner and as such, is their responsibility. No party shall have any right of action against Legal & General in relation to the accuracy or completeness of the information in this article.