Trapped borrowers – ‘not the best outcome for anybody’ – Shawbrook

This is despite the fact that since the FCA brought second charge mortgages under their regime, offering greater consumer awareness and protection, everyone should now be offering second charge mortgages if they suit the customer’s circumstances.

So why are so many advisers, like yourselves, still deterred from owning these opportunities and passing what could be potentially lucrative business, onto others? My gut feel is that there is a lack of awareness, and I believe this is down to many of the topics surrounding second charge mortgages focussing on the wrong things. Who can process seconds more effectively? Who charges the most fees? When the fact of the matter should be about educating customers in how a second charge mortgage might be a more viable option to a remortgage, or in fact the only option.

Perhaps you are still nervous about knowing enough about the lenders’ criteria? Perhaps you feel that technology is failing you in your ability to research and evidence? Are you still looking at second charge mortgages as a long-term option, and not how they could help your customers in the short-term? Or are you still locked in the past where the perception of second charge mortgages is high rates, high fees and no innovation…..

Lenders should be doing more to dispel these myths. The simple fact is that if nothing is done, advisers will continue to do what they have always done, and in turn customers will continue to receive what they have always received, leading to no market growth and more trapped borrowers – not the best outcome for anybody. Lenders should continue to educate and change the perception of second charges; and equally advisers should embrace this change and view the market with an open mind. Why don’t you consider attending a workshop? Or even invite a BDM in to help you to spot those opportunities?

I believe there is a place for everybody within the seconds market; whether you go direct to a lender or through a specialist master broker. The key things to remember are that firstly, the customer remains at the heart of the process and secondly, you must have the awareness and education of the market to identify and drive the opportunity, own it, and reap the benefits that it brings.

Maeve Ward, managing director, residential mortgages, Shawbrook Bank