Rooney and specialist mortgages
Paul Hunt is a marketing consultant
All talk on the back pages over the last week has been whether Wayne Rooney should be allowed to walk out one last time for England and even if that’s okay, should he win one final cap too?
It has set a precedent though and that’s my topic this week, as once something like this happens there is no going back.
How can this apply to our world?
Historically existing residential borrowers with specialist lenders have been expected to eventually remortgage to a more mainstream lender and this has been built into the financial modelling of specialist mortgage products. Lenders will calculate what percentage of customers will actively move away and which number may stay either due to apathy or circumstances.
However, with changing employment patterns and general circumstances, can we assume that all borrowers will eventually become mainstream or maybe they don’t ever want to?
With lower purchase transactions likely for some time to come, fewer new borrowers may come into the specialist lender catchment than they have forecast and so active retention of existing borrowers may be needed to retain a certain level of profitability. The role of the broker will be crucial and lenders will have to ensure any retention activity fairly rewards brokers for the work they undertake. Unlike other lender types, specialist lenders are wholly reliant on brokers for their business and so I’d expect them to get this right!
Once one lender makes the first step, there may be no going back. So, who will be OUR Rooney?