It certainly is the case that if mortgage brokers were more engaged with the products we would see even greater growth, but the ability to create growth does not just lie with brokers.
Indeed, so far this year lenders have continued to push growth by creating innovative products to cater to even the most complex of buyers.
Much of the creativity is in finding product niches rather than simply getting in to a rate war.
West One is making a stir with its buy to let (BTL) second charge range – a move that has prompted significant reductions in rates from other lenders.
Products which do not require consent to a second charge from the first mortgagee are also becoming more prevalent, which is especially useful in the BTL sector.
Vida’s launch into the second charge market is also good news with new products including self-employed, BTL, Houses in Multiple Occupation (HMO) and property types shunned by others. Optimum’s new range of interest-only seconds with no early repayment charges (ERCs) aims to offer rates around 2% less than competing interest-only products.
After a predetermined period it converts to capital and repayment – this is ideal for predictable cash flow issues such as paying school fees.
Bridging 80% LTV
And for bridging clients we currently have an 80% loan to value (LTV) bridging product – a striking product considering LTVs for second charge bridging products tend to be around the 65% to 70% mark at most.
Incidentally, did you know that 80% LTV is available on non-regulated first charge bridging too.
Brokers, we need you to embrace second charges if the market is to get anywhere near its potential.
Lenders are innovating all the time so keep abreast of the products being launched, talk to loan master brokers and you will find solutions for your clients you never dreamed existed.