Q: With the increased work generated as a result of the Mortgage Market Review, I am concerned that spending time selling GI could detract from my core business. Is it really worth all the effort?
A: My simple answer would be – can you really afford not to?
The Mortgage Market Review (MMR) is nothing new. The impact of MMR may well have come as a bit of a shock to many homeowners and has certainly left many brokers wondering where they are going to find all the extra time.
The new rules mean that as an adviser your role has never been more crucial. Caps on borrowing, lower LTV ratios, banks requiring more capital, and the scaling back of the help-to-buy scheme, mean that home owners are going to have to jump through many more hoops to secure a mortgage.
Added to that, many direct lenders have either pulled out of seeing new clients, or have long waiting times for the first interview. This means more clients need the help and support of a good mortgage broker, meaning you can help guide them through this daunting process. But to really protect them and their interests you must include general insurance (GI) within the equation.
Under MMR you will be gathering more detail than ever before about their mortgage payment affordability, household budget, savings, employment status and so on, and this gives you an invaluable insight into their financial needs and even an opportunity to cross sell products and services where appropriate to your clients whether it be at the time of the mortgage or later in the insurance life cycle.
By selling GI you will not only be increasing your business but also helping your clients help themselves. Ensuring they have the back up of income protection, using a combination of CI, PHI, MPPI and/or STIP, means they will be in a better position to cope financially in the event of a claim and to pay their mortgage in the long-term, no matter what life throws at them.
You may also save them money in the process by securing better deals on their home insurance for example which all go towards the mortgage pot, further demonstrating your worth as their trusted adviser. And if you simply don’t have time, ensure you introduce the GI leads to your GI partner so at least you know that someone will be talking to them about this valuable protection.
Affordability is the key in MMR and I would argue that if your clients cannot afford some form of income protection cover then they may not be able to afford a mortgage.
