Many brokers are still not sure when a secured loan could be the best option for their customer, we take a look at some of the most common scenarios.
Although the reputation of second charge mortgages has vastly improved since the introduction of the Mortgage Credit Directive (MCD) in 2016; there is always room for improvement and we are still finding that some brokers are shying away from offering secured loans. The reason behind this is not the lack of willing, it is still a lack of knowledge and education on secured loans. They can still be viewed as an option for those with less-than-perfect credit, but that is no longer the case. We have many clients that have an excellent credit history, but a secured loan is still a better solution for their situation. We have put together some of the most common queries from our brokers, to help you understand when a secured loan can be utilised.
My Customer has a Low Interest/Fixed Rate Mortgage
Many of our brokers have customers who have a mortgage with a low or fixed rate and to remortgage would not be in their best interest. There can also be the possibility of large redemption charges for changing the mortgage plan. This is where a secured loan can help; often a secured loan can provide clients with a solution that is exactly what they need and allows them to keep their first mortgage in place. Plus, if they look to remortgage in the future and pay off their secured loan earlier than planned, many of our lenders have low or no early redemption charges.
My Customer has a missed Mortgage Payment in the Last 12 Months
It may seem like there are very limited options out there, but there are lenders that will consider these cases. We have access to a lender that has no LTV restrictions for one missed mortgage payment, with a loan value of up to £5,500, so there are options available to those customers you may have previously disregarded.
My Customer has only recently started a New Job
We understand that it may seem difficult, as some prime lenders prefer a customer to have been in a job for a minimum of a year and out of probation, but life does not always work like that. We have a range of lending options available for customers who have been in a job for 12 months; some only require the customer to have been in their job for three months; and one of our lenders does not have a minimum time in employment. So, we have got plenty of options available.
My Client has a history of Adverse Credit
We are a specialist broker, which means we have access to lenders that have plans which cater to customers with a range of credit histories. Some of our lenders disregard defaults and CCJs under £300 or over 12 months old.
My Customer has only been Self-Employed for a Year
That is ok too! If your customer has one years accounts/SA302s, then we have prime lending options available. High Street lenders can be difficult to navigate when it comes to self-employed applicants, which is where specialist second charge lenders take the lead.
My Client Income is Limited
We are not going to promise the world; however, we are saying to not give up on the case. There are lenders that take a range of incomes into account, and some that work on their own income & expenditure, as opposed to income multiples.
We have not covered every scenario, but these are some of the most common we come across. Hopefully, this will help with your cases and prevent some cases from being disregarded.
When it comes to second charges, Norton Broker Services is expertise you can trust.