Adviser warns against ‘greedy’ approach to second charge fees

  • 09/06/2016
  • 0
Adviser warns against ‘greedy’ approach to second charge fees
Directly Authorised (DA) brokers must ‘mentally condition’ themselves to consider second charges in the same manner as first charges and ensure fees are not out of proportion, an adviser says.

Speaking at a second charge masterclass this week, Martin Stewart director and founder of London Money (pictured), said there was still an issue with fees charged by many brokers and packagers in the second charge market, despite the Mortgage Credit Directive (MCD) bringing them into line with first charge loans.

Stewart confirmed that London Money Loans, the second charge arm of London Money which launched in April, has so far charged an average of 1.8% for advice.

He said: “There may well be brokers out there charging excessive fees but that’s their problem. There is a need to be commercially minded but not to be greedy. This is now a regulated mortgage contract on a par with first charges, so mentally, you’ve got to condition yourself to treat them in the same ilk.”

Stewart also warned that brokers were at risk of their business being taken elsewhere if they failed to consider second charge mortgages as an option within their advice scope.

“For DA brokers, your biggest threat isn’t the FCA, your biggest threat is the packagers, the networks and the mortgage clubs. They will try and squeeze your market over the next few years and the banks will do the same,” he said.

“So it’s important to realise what an opportunity is and then that can help fill any income gaps that we might suffer going forward.”

There are 8 Comment(s)

You may also be interested in


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.


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
Read previous post:
City of London skyline
Mayor’s focus on London office space could delay delivery of housing

The Mayor of London’s calls to change planning guidelines in the Capital, making it more difficult to convert empty office...