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LoansBrain: Brokers who ignore seconds are ‘missing out’

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LoansBrain: Brokers who ignore seconds are ‘missing out’

The introduction of the Mortgage Credit Directive (MCD) means it has never been easier for brokers to make the most of opportunities presented by the growth in the secured loans market.

It's a chance that should not be missed, says Mark Lofthouse, CEO of Mortgage Brain/LoansBrain.

The secured loans market is growing fast.

The most recent industry figures suggest that secured lending transactions in the UK reached a five-year high of almost £106m in January 2016.

This is an increase of 7% on December's figures and a rise of 31% from January 2015.

Perhaps even more significant, second charge mortgages are now growing faster than traditional re-mortgages, with a 59% year-on-year growth to January 2016, compared with a 32% growth for re-mortgage lending over the same 12 months.

This increase alone should be enough to persuade brokers that secured loans are a market worth getting into, but the introduction of MCD makes the decision even easier.

As we all know, MCD means that second charges have now moved from the jurisdiction of the Consumer Credit Act to being governed by the Financial Conduct Authority's Mortgage Code of Conduct rules.

Brokers must now consider second charge lending when discussing options with their clients.

This, too, ought to put second charges front and centre in brokers' minds, but there are other, more specific reasons as well.  

The removal of the 16-day, cooling-off period means that second charge mortgages are now a serious alternative to bridging loans and re-mortgages, especially where speed is of the essence.

Once a recommendation has been made, some completions are being achieved within a few days.

Second charge mortgages can also attract smaller fees as, unlike other forms of secured finance, there is very seldom a need to get a solicitor involved.

The image of secured loans is also changing.

Whereas in the past they were seen as a loan of last resort, these days they have become much more mainstream.

The increase in equity in many people's properties has also helped.

Second charges can allow borrowers to take out a loan without disturbing their current mortgage rate – or in some cases being asked by their lender to move from an interest-only product to a repayment one – and rates have dropped substantially over the past few years.

And as if that wasn't enough, it’s now also a lot easier for brokers to access secured loan products. 

LoansBrain, for example, a new, whole-of-market secured loans sourcing system, which we launched last month, is free to use and enables brokers to source a range of products from the UK’s leading secured loan lenders.

With options for quick and detailed second charge sourcing, LoansBrain also enables brokers to choose to advise clients on the best products available, or to simply forward a client’s details to the master broker, who will then manage the advice and application process.

The system is fast, incredibly easy to use and  optimised to work on PCs, laptops and tablets.

Secured loans were already a growth sector before the advent of the MCD.

With this now in place, and systems such as LoansBrain available at the touch of a button, brokers who don't make second charges one of the cornerstones of their product range are missing out.

Attributed to Mark Lofthouse who is Chief Executive Officer of Mortgage Brain/LoansBrain, a Microsoft Gold Certified Partner.

He can be contacted on 01527 557 203 or [email protected]




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