Ok, this is a serious issue and I make no apology about the sombre tone because this blog could save your businesses in the years to come. Ok, here we go;
EVIDENCE THAT YOU HAVE CONSIDERED A SECOND CHARGE/SECURED LOAN WHEN YOU ARE WORKING WITH A CLIENT WHO IS ASKING YOU TO ARRANGE A REMORTGAGE THE UK’S CLAIMS MANAGEMENT FIRMS WILL HAVE YOU IN THEIR SIGHTS!
OK so this is how it works (and this is really obvious!) Clients take out a mortgage between 2002 to 2007 and the chances are they have a cheap reversionary rate after the product selected has finished because the lenders never factored that the rates would stay at 0.5 per cent for 5 years plus. Assuming that they aren’t immoral and have retrospectively changed these terms, brokers will be fully aware that these clients are not motivated to go anywhere right now. That said, if rates do increase in the next 12 months clients are likely to consider remortgages and use this opportunity to ‘clean up’ their household finances and borrow more.
Sadly, a significant chunk of clients won’t seek decent independent mortgage advice with an intermediary and lenders will use this as a ‘once in a generation’ chance to get these clients off these rates, which bluntly, make them next to no money. FACT, it is highly possible that by keeping these clients on these lower rates and taking extra funds on a second charge, the ‘blended’ cost is going to be cheaper.
Simple isn’t it? If you don’t do this, it could at best, and will at worst, be argued that you haven’t considered the clients’ circumstances correctly and as a result you have failed in your ‘duty of care’ as you lost them the savings of their lower rate when there was a better and cheaper opportunity available.
Yes, Brightstar does offer secured loans so you could see this as an obvious sales piece. I’ll leave the rest up to you.