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Guest blog: How realistic is the seven-day remortgage?

mortgage-piggy-bank.jpgIt’s easy to take the convenience of our digital world for granted. For instance, people enjoy the ease of online shopping and if they need to transfer money from their savings to their current account all it takes is a swipe on their smartphone.

However, not every financial transaction is quite so effortless. When it comes to remortgaging, for example, the notion of a quick and easy transaction completed fully within seven days sounds more unlikely than a digitally-aided reality. But just because there are obstacles and existing norms it doesn’t mean this aspiration is not ultimately achievable.

LMS continues to push the areas where digital innovation can impact the most. If remortgaging could be completed more quickly and simply it would become more attractive and accessible to consumers.

We are not alone in thinking along these lines. The government continues to take opinion on how to make seven-day remortgaging a reality, a move that would bring it into line with other financial transactions such as the switching of current accounts. Not too long ago, a Santander survey found that 20% of people said they would rather go to the dentist than switch their bank account, but the advent of seven-day switching in 2013 made the process quick and easy.

The prerequisite to change is a willingness to challenge the norm. This is the agenda LMS continues to push, and we believe that by encouraging others in the industry to do the same, new ways of working can become the routine processes of tomorrow.

Customers enjoy digital technology, and they increasingly expect to take a digital approach when remortgaging. Our data shows only 9% of customers completed their legal documentation online in 2011, this figure rose to 70% in 2017.

The challenge is to ensure that the technologies and processes are in place for these expectations to be met. For example, we have developed electronic certificate of title (e-COT) which uses digital technology to improve the security, speed and efficiency of that aspect of the remortgaging process.

We continue to work closely with the Land Registry to prepare for the imminent transition of customers being able to sign their mortgage deed electronically.  This fits perfectly with the LMS ‘Hub’ process and our own customer portal, ‘TrackMyCase’. With over 1.5 million log-ins during 2017, this type of customer interface will have a crucial role to play if seven-day remortgaging can become a reality.

Faster remortgaging is going to need all stakeholders to embrace change.  Many practices across the industry will have to improve from underwriting, offer production and delivery, the delivery of redemption statements to new thinking around the subject of electronic identification. Fund request timescales will have to be cut, and the 14-day cooling off period would need to be reconsidered.

Currently, an end-to-end 7 day remortgage looks ambitious rather than realistic but the industry can further push this agenda and increase collaboration to considerably improve the remortgaging experience for consumers.

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Posted by Paul Davies on 09 May 2018