The incoming Mortgage Credit Directive obliges all mortgage advisers to disclose to customers the limitations of their advice capabilities if they offer just first or second charge broking or any other product omissions if they do not offer full scope.
However, where 35% of advisers did one to three cases over a six month period, 54% of mortgage advisers do no second-charge loan business at all, according to Mortgage Solutions research from 376 advisers completed last summer.
In our video, Claire Rankin, head of networks and secured lending at Shawbrook Bank, agrees the product’s expense is a factor but said it’s important to understand the background to the charges.
“Second-charge brokers have always incurred the cost of the product fee on behalf of the client because master brokers can’t charge an upfront fee as well as the valuation costs and the consent form from the first-charge lender. Don’t forget some of these deals don’t actually make it to completion too,” said Rankin.
“We will see a further reduction in these fees and in fact, we already have seen average fees from our top 10 master brokers drop to around 4 to 5%,” she added.
Enjoy our comprehensive secured lending debate, sponsored by Shawbrook Bank [09:05] below featuring:
• Gemma Harle, AMI board member and managing director, Tenet Lime
• Marie Grundy, AMI board member and MD, V Loans
• Robert Sinclair, CEO of AMI and the AFB
• Claire Rankin, head of networks and secured lending, Shawbrook Bank
• (Chair) Victoria Hartley, group editor mortgages, Mortgage Solutions
Watch out for part two coming shortly..
