88% of intermediaries surveyed at the recent Financial Services Expo felt that secured loans should be considered alongside re-mortgages under “best advice” when they fall under FCA regulation in April 2014.This is despite the fact that over a third of brokers (34%) have never used a secured loan as an alternative to a re-mortgage.
35% of respondents used a secured loan instead of a re-mortgage option in the past six months, highlighting the increasing popularity of this option. However, only 13% were able to provide their clients with a personal loan at a rate of less than 6% APR due to lenders’ stringent criteria for headline rate products.
Gareth Broome, business development manager at The Lending Wizard comments:
“When searching for additional finance for clients, the re-mortgage tends to be the most common option chosen by advisers. It goes without saying that most advisers are more familiar with the further advance route than they are with secured loans. However, the obvious limitations on further advances and stricter eligibility requirements have made the loan option a more attractive alternative in many situations.
“However, it’s important to understand in which particular circumstances a loan could be preferable over a further advance. Clearly, advisers feel that recommending a re-mortgage isn’t always the best option and in certain situations exploring alternatives may be worthwhile.”
