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Do you expect to see less or more second charge mortgage lenders in 2018?

Maeve Ward: Digging deeper

Maeve Ward

Since January 2017, I have attended and hosted over 20 events around the country, all with the purpose of educating advisers on specialist lending products, especially second charge mortgages.

What these academies, forums and senates have all indicated is that much more needs to be done on educating advisers to take a more holistic approach to advice when it comes to second charge mortgages. Not only will this help more customers, but also create additional revenue streams.
Taking a holistic approach to a customer’s circumstances means looking at it from all angles and deciphering from this information what the right outcome is for them. Too often advisers take cases on face value rather than digging deeper. This leads to dissatisfied customers who may take their business elsewhere to someone who takes the time to find a solution.

Here are just a few examples of where taking a holistic approach could help:

  • A customer has been turned down for an unsecured loan or a remortgage. An adviser taking a holistic approach would understand that just like every customer’s circumstances are different, so too are lenders’ appetites, and while the customer has been turned down once, it doesn’t mean that they will be rejected again. By taking the time to research the market, an adviser would see that a second charge mortgage could provide a good alternative to the customer enabling them to raise the finance they need.

  • There’s the customer who’s recently submitted their tax assessment to find that they now have a large bill to pay. The customer is cash poor, but asset rich. An adviser looking at the situation would understand that while they didn’t have the cash to pay off the bill, they could use their asset – a property – for a second charge mortgage to settle the bill.
  •  Perhaps you have a customer who is financially stretched, yet maintaining all their credit, but is sensible enough to realise they need to consolidate their debts. This type of customer isn’t always acceptable to many standard lenders because they take the credit that the customer plans to pay off into the affordability assessment. A well-researched adviser wouldn’t take this as a ‘no’ – they would look at second charge lenders – such as Shawbrook – that do not factor in credit into the affordability where the plan is to pay the credit off.
  • What about a customer who has fallen on hard times, perhaps experienced a bereavement, were too sick to work or were perhaps involved in an accident? Often these unfortunate circumstances can negatively impact a customer’s credit profile and that despite returning to work 12 months previously, this customer is still considered in the same light as someone else with a similar credit profile who can pay, but chooses not to. By digging deeper, an adviser understands that while similar in credit type, this customer poses a welcome opportunity to some lenders, especially those in the specialist lending market who understand complex circumstances and assess every deal on its merits.
  • By making the effort to truly appreciate a customer’s circumstances and knowing that specialist lenders – especially those such as Shawbrook – will take the time to understand these cases, it will mean that where a customer once thought their dream might be lost, in fact a positive outcome is just around the corner.


What needs to be done?

The second charge mortgage market needs to open up advisers’ eyes to the opportunities that lie in seconds and encourage them to think more holistically. People’s perceptions are what they believe to be reality, but the reality is that perception can change through education.  If we can educate the mortgage market on the value that second charge mortgages can bring and dispel their myths, advisers can in turn educate customers, leading to more awareness of the product as a whole. Alternatively, even if an adviser doesn’t wish to be an expert in second charge mortgages, they don’t need to be. All they need to do is recognise the opportunity and work with a specialist master broker who can do all the hard work for them.
At Shawbrook, we’re doing our bit to educate the market and continue to host academies across the country, bringing our expertise, along with that of a specialist packager in second charge mortgages, bridging, commercial mortgages and lending into later life. If you’re an adviser and you think that second charge mortgages could maybe be an option for you, this could be the start of a journey together, so register to attend and let me help you to learn more.

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