In an ever-changing buy-to-let market, the task of managing a property portfolio becomes increasingly complex – whether it’s navigating higher operational costs, changing market conditions or meeting new regulatory demands.
Given the challenges facing landlords, it’s absolutely imperative that refinancing is smooth, efficient and most of all accessible to have the best chance of keeping hold of good quality landlords.
Particularly in the specialist buy-to-let space, refinancing has almost always meant a full remortgage as any other solution was traditionally too complex for lenders to offer.
Not only is this more expensive for landlords, it’s perhaps more restrictive in a higher rate environment and with tougher stress testing than when they first took out their deal.
It’s also a pain for brokers too as they are time intensive and increase the risk of clients switching to a competitor during this remortgage process.
EMERGING OPTIONS
However, we have seen a shift in the market with the emergence of product transfer options, allowing landlords to stay with their existing lender and benefit from speed, continuity and cost savings.
It’s also a real win for brokers too as it boosts client retention, all while offering the same benefits of speed and ease.
It’s been a move that perhaps best suited those with little change to their circumstances. However, increasing innovation from lenders – such as Landbay, for example – now means that further options such as additional borrowing and overpayment can now be part of the product transfer journey.
Rather than just a “nice to have”, these options can make a massive difference for landlords – particularly as brokers help them to navigate the market as it is.
EQUITY RAISE
Unlocking equity is something that is traditionally associated with a full remortgage – a process that is not only time consuming, but incurs costs such as legal fees and valuations.
For those landlords with capital tied up in their properties, the ability to raise additional funds as part of the product transfer for property improvements or further investment, is a real win.
Using Landbay as an example, additional borrowing can be requested at the start of the product transfer application and is subject to product criteria.
Opting for this at the outset means landlords can fully plan for the future without stepping outside the comfort and convenience of a product transfer – whether it’s to future-proof properties, make renovations or to explore new investment opportunities.
STRATEGIC MOVE
Overpayment is another valuable tool available to landlords, giving them greater control over how they manage and reduce interest payments, as well as the overall debt.
In truth, it can be quite the strategic move as it allows landlords to not just save money, but really optimise their finances and have greater ownership over their properties and portfolio.
In the case of Landbay, these can be made during the product transfer process and right up to completion.
All the above though is totally reliant on the right technology to manage and facilitate this process.
By their very nature, product transfers should be simple and stress-free, especially in a complex market such as buy-to-let. It requires lenders to be investing in technology and bringing forward platform improvements to minimise pain points and ensure the entire process runs smoothly for both broker and borrower.
Whether that’s checking eligibility within an existing broker portal, a fully digital application process or automated decisioning and property valuations. Lenders are continuing to push forward with digital transformation in an effort to deliver decisions faster and slicker experiences for all parties.
At Landbay for example, the background portfolio upload is now integrated directly into the application process to minimise friction and help streamline stress testing.
Developments such as these not only enhance the product transfer process, but help to transform the entire refinancing process – increasing options for landlords, while giving brokers new ways to deliver a greater service and add value.
For brokers particularly, it offers an important consideration when placing a buy-to-let case with a lender. Of course, we want competitive options, greater services and quick decisions at the outset, but that’s only one component of what makes a good buy-to-let lender.
Now, it is important to find out what product transfer offering a lender has and how it stacks up against others on the market. Are valuable options like overpayments or additional borrowing even available?
This will help brokers to determine what options are available on the back end to support their clients, boost retention and ultimately deliver the best possible service.
