Lenders need to improve communication, says mortgage director
The founder of a national brokerage is calling for greater transparency from lenders.
Nicola McKenzie (pictured), director of DM Mortgages, based in Stafford, wants to see communication stepped up, especially in the area of pricing.
“The past year faced additional challenges due to abrupt withdrawals of offerings when swap rates increased, affecting both stability and fairness for customers and placing unnecessary stress on brokers,” McKenzie told Mortgage Introducer.
“I’d like to see improvements, particularly in pricing communication and transparency from lenders. I also want to see all lenders make it equally easy and unrestrictive for borrowers to switch to lower-rate products and benefit from dropping rates.
“Transparency goes for things like mortgage product end dates too – if it says a two-year fixed rate, it should really be that customers make 24 payments at the rate agreed from completion, and not be short-changed if they need more time to reach completion for reasons beyond their control.”
She suggested that lenders could enhance their relationships with brokers still further by offering additional training, especially for firms with individuals new to financial services.
“This training should cover more than just criteria, including general tips for brokers and workshops on topics like understanding company accounts and credit reports, for example,” McKenzie explained. “Additionally, creating more efficient channels of communication between underwriters and brokers would strengthen lender-broker relationships. Allowing brokers to have a direct relationship with underwriters can expedite the resolution of complex cases, improving efficiency both ways.”
DM Mortgages is part of The Dunham McCarthy Group, which McKenzie co-founded in 2011, with a commitment to providing a holistic approach to mortgages, estate planning, legal services, and insurance advice. It has over 50 specialists and associates on its team.
McKenzie is impressed by one major lender’s efforts to modernise in the current mortgage market.
“Where technology is concerned, it is encouraging to see lenders like Barclays investing in modern systems to make business submissions smoother for brokers,” she commented. “However, it’s frustrating that some lenders are still using outdated systems reminiscent of the ‘90s. These lenders need to catch up with modern-day technological expectations to avoid falling behind.”
A slow start
McKenzie believes that the market will continue to be testing over the next 12 months.
“The mortgage market is likely to start slow in terms of purchases as buyers continue to take their time to assess the situation and, as a result, many brokers will continue their focus on remortgages and product transfers,” she anticipated. “If some expectations come true, such as a possible reduction in the base interest rate towards the end of the year and ongoing decreases in swap rates, there might be a more positive outlook for purchases.
“However, challenges still persist in terms of affordability due to increasing mortgage rates. While there has been a slight drop in house prices, it hasn’t been enough yet to offset the impact of these higher mortgage rates. The direction of the industry in 2024 depends on potential changes in interest rates and ongoing efforts to make housing more affordable.”
Don’t stress… diversify
Diversification is key for brokers’ businesses, McKenzie believes, with protection a key area for exploration.
“In 2024, brokers are facing a big challenge – some have seen a significant drop in revenue because of the tough times we had in the past year,” she reasoned. “Instead of getting stressed about things in the market that we can’t change, it’s crucial for brokers to adapt and diversify, especially in areas they might not have paid much attention to when the market was busier. For example, emphasising the importance of protection and revisiting clients, particularly in cases where protection may have been overlooked previously.
“Integrating estate planning into the broker’s toolkit can also serve as a valuable strategy for mortgage & protection lead generation. My top tip for the year ahead is to embrace the upcoming year as a series of opportunities rather than challenges.
“Sometimes, what you need to improve your business is right in front of you. For example, if you’re receiving inquiries but first-time buyers are just exploring, consider expanding your services to include protection for tenants or introducing estate planning. Take a proactive approach by putting together a business plan, even for established businesses, to identify gaps and provide a framework for filling them.”
And, on a more personal note, what does McKenzie want from the coming year?
“I plan to take a bit more time for myself,” she shared. “Last year was very hectic, and I could count on less than one hand how many days I have had off. My goal is to enjoy a well-deserved break somewhere exotic at some point.”
