How master brokers can help second charges into the mainstream – Legal and General Mortgage Club

by: Danny Belton, head of lender relationships at Legal & General Mortgage Club
  • 11/01/2018
  • 0
How master brokers can help second charges into the mainstream – Legal and General Mortgage Club
Second charge loans have already been embraced by some brokers, who feel comfortable in providing advice on these products.

 

 

This has seen distributors provide direct to lender propositions that enable brokers to submit cases in the same way they do for first charges.

However, this has not been the case for all the broker community, with many advisers looking to master brokers for support, either due to a lack of confidence or knowledge around these products.

This support is not just limited to brokers, but also extends to customers.

Most master brokers offer a packaging service for brokers who want to give advice to their clients, but for those that don’t, brokers can refer their clients to the master broker who will give advice and deal with the customer directly, on their behalf.

 

Fee concerns

Some brokers have been reluctant to use a master broker due to the perceived high fees that they typically charge, but this needn’t be the case anymore.

A number of master brokers have recognised this problem and brought their fee structures more in line with the pricing of first charge products. Of course, those brokers who give advice and submit cases directly to lenders are in control of the fees that a borrower is charged.

Last year saw an increase in the number of lenders providing product transfer facilities for brokers, but only a few of them offer a further advance facility via brokers.

While some customers would be happy to deal directly with a lender, many would prefer their broker to both advise and organise their additional borrowing.

 

Consumer Benefits

As an industry, we need to raise awareness of the opportunities that the second charge market has for borrowers.

Second charges offer great opportunities for the right customer, in particular for those second steppers who are looking to improve not move by renovating their current property to suit their needs and add value as a result.

Although it is unlikely that customers will come and specifically ask for a second charge loan, it is our duty as an industry to make them aware of all of the options available to them and point them in the right direction for their situation.

 

The future for second charges

There have already been a number of significant improvements to the second charge market, which have not only allowed brokers to make more informed choices, but also to provide better and more holistic advice to their customers.

Recent figures from the Finance and Leasing Association (FLA) show that the second charge market reported new business up by value and by volume compared to 2016.

However, it is clear there is still more that can be done before brokers feel as comfortable advising as they do on their first charge counterparts. More education is needed among the broker community to provide better customer outcomes and to bring second charge loans fully into the mainstream.

There are 0 Comment(s)

You may also be interested in

Bridging

Keep up-to-date with all the breaking bridging and short-term lending news and analysis, from regulatory changes to product innovation and inside market knowledge. Take a look at our broker and lender case studies showing short-term finance in practice.

Commercial

Find all the news, opinion and analysis for property finance brokers specialising in commercial and semi-commercial mortgages, alternative and development finance for commercial investments in residential projects.

Second charge

Stay up-to-date with the latest news, analysis and opinion on the secured loan market as it evolves into a mainstream finance option following European regulation on 21 March 2016.

Complex buy-to-let

Whether it’s a complicated asset or a complex customer, you’ll find out all the breaking buy-to-let news in this section. From limited companies to portfolio landlords, student lets to a House in Multiple Occupation, we’ve got all bases covered with our up-to-the-minute news, analysis and opinion.

Mortgage Solutions

Find all the breaking news, analysis and industry comment on Specialist Lending Solutions' sister site, Mortgage Solutions
  • RT @specialistsols: Survey: We want to find out how the new Prudential Regulation Authority (PRA) rules affected you, 10 questions to take…
  • RT @GWlegal: 💡A REMINDER💡there is still time to vote for our partner, Edward Goldsmith in the 2018 for the category of 'Business Leader Con…
  • RT @VidaHomeloans: With many FTBs now requiring more complex borrowing solutions, Vida’s Director of Sales – Mortgages, @SedgwickLouisa wil…
Read previous post:
head shot Phil Rickards
BM Solutions offers landlord mortgage calculator for loan to value and rental cover

BM solutions has built a calculator to help brokers work out loan to value (LTV) and rental cover ratios for...

Close