FR: What will be the greatest challenge facing the second charge loan industry in the coming months?
Aside from the obvious, namely, obtaining full permissions from the FCA to carry on arranging second charge loans, I would say that mortgage networks may lose valuable income as more customers find themselves better suited to a second charge rather than a remortgage or further advance. Putting aside adverse effect on revenue stream for one moment, customers of Appointed Representatives should have access to a compelling range of second charge products.
I’m not convinced mortgage networks are providing a suitable solution to their ARs. We have helped a number of Networks recently in recommending second charge master brokers who are able to offer a solution. My recommendation is to appoint a minimum of 2 (on a Champion and Challenger basis) – it gives the Network a great mirror to hold up to each master broker, creates competition and helps drive conversion.
FR: You recently launched your second charge loans’ range – what has the response been like from intermediaries?
The range has been received well – with a very competitive range of Prime and Near Prime products – you will see our Prime lead rate of 5.45% and now 7.70% for Near Prime. The overriding message has been focussed on our arrival in to this sector of the market. I think its made intermediaries stop and think ‘If Precise Mortgages are taking this section of the market seriously, then so should we’.
FR: Second charge lending grew considerably over 2013 – do you think this growth is sustainable, and why?
Sustainable only if the mortgage intermediary market recognises the opportunity and begins properly considering second charges during their research for a suitable financial solution for their customer. Every customer file should contain research as to why a secured loan has or has not been considered. Surely, this additional evidence will support the justification used in the final product offered – even if not a second charge and you’ve stayed with the re-mortgage option.
FR: How do you feel the regulation by the FCA in April 2014 will change the second charge loan market?
Opportunity, responsible lending, fair customer outcomes, competition, increased conversion and new income streams for those serious about the sector.
FR: If you weren’t in financial services, what would you be doing?
On the beach enjoying the sun.
