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Consumers suffer if lenders refuse to work with advisers

by: John Heron
  • 13/09/2011
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Consumers suffer if lenders refuse to work with advisers
The FSA recently released figures claiming there has been a decline in the proportion of mortgages sold through intermediaries since Q2 2010.

However, in specialist sectors, the intermediary share of the market is as high as ever.

CML figures showed that intermediaries accounted for nearly two-thirds of sales; 64% of first-time buyer loans, 58% of remortgage loans and 55% of home mover loans, during the same quarter.

Intermediaries do their best work where homeowners are experiencing difficulty with the “computer says no” mentality of the major high street lenders.

Here the intermediary will work hard to find the right lender that offers the very best rate.

There are countless stories of individuals who thought they could not buy a home or thought they could not move because they were rejected by a high street lender.

A professional mortgage adviser will make sure that every avenue is exhausted and, in the vast majority of cases, will find a solution.

In the specialist markets in particular, the intermediary remains unchallenged.

For home buyers who have experienced some minor level of adverse credit but are now on an even keel, the regular mortgage market is a closed door.

Intermediaries have access to both specialist lenders and more enlightened mainstream building societies and banks that will take a view.

Similarly buy to let remains largely the province of intermediaries.

Landlords’ needs are more complex and the choice of lender and product can only be resolved after an exhaustive review of the detail of the property type, the tenancy and the landlords own circumstances.

This is something intermediaries have the industry knowledge to provide.

The FSA figures may have shown a decline, because mainstream mortgage lending has become overwhelmingly concentrated on low loan-to-value owner-occupier purchase and remortgage transactions.

Innovation in this sector is stone dead and the big lenders are slugging it out on price alone.

Intermediaries are either discouraged or outright excluded from assisting customers in this sector, because some lenders will not accept introductions from mortgage brokers.

This is not good for the mortgage buying public.

Too many will simply accept the product they are sold by the first lender that says yes, instead of trawling the market for the most suitable and the best deal.

Mortgage advisers will do this and will do so at little or no charge to the borrower.

John Heron is chairman of the Intermediary Mortgage Lenders’ Association (IMLA)

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