Mortgage News
92% of brokers struggle to place interest-only cases
Almost all mortgage brokers have had problems placing interest-only cases, this week’s Mortgage Solutions poll has found.
Of the 153 respondents, 92% said that since Santander, swiftly followed by other lenders, tightened criteria, they have found it more difficult to place interest-only cases.
Steve Biggs, managing director at APH financial management service, said that his firm had been affected. “We have quite a lot of clients who are mortgage prisoners unable to secure a competitive rate.”
He said that it was still possible to place interest-only cases with Accord, Clydesdale Bank and Harpenden Building Society, but worried what would happen if these lenders tightened criteria.
“When that option closes, how will I be able to help my customers?”
Martin Wade, director of Your Mortgage Decisions, said that there was “without a doubt a difficulty” in placing interest-only cases, despite the fact that there were those – such as mothers taking a break from work to look after children – who had legitimate reasons for seeking them.
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“The overreaction we have seen is detrimental to their [lenders’] customers and our clients.”
However, Adam Tarr, director at Amber Mortgage Solutions, said that at present, he still manages to place interest-only cases: “If it is affordable to clients a repayment option is always the best, but it is down to individual circumstances on each case.”
The head of mortgage policy at the BSA, Paul Broadhead, added that it was inevitable that some brokers would find it harder to source an interest-only mortgage for their customer.
“Mutual lenders seek to provide a tailored underwriting approach, rather than ‘computer says no’, but in order to manage volumes and exposure, and as a result of the continued regulatory uncertainty, it’s probable that more lenders will amend their policy with regards to interest-only.”
This week’s big question:
Insurance broker Berkeley Alexander said this week many brokers are scared to recommend Accident Sickness and Unemployment policies after the PPI mis-selling scandal.
Are you reluctant to sell ASU cover?