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



The days of the dismissal of a second charge are over

By Jon Sturgess, head of sales at Masthaven Secured Loans |


 The Mortgage Credit Directive (MCD) is now in full swing and has undoubtedly helped to bring additional clarification to the benefits of the second charge sector.

The Mortgage Credit Directive (MCD) is now in full swing and has undoubtedly helped to bring additional clarification to the benefits of the second charge sector. 

As a result of this, lenders are now working with packagers to enhance their position in the second charge market alongside first charges.

Packagers are providing specialist knowledge of second charge products where brokers were traditionally more experienced with first charge mortgages. There are a number of aspects that are different for second charge mortgages compared to first charge.  

Lending criteria can differ for second charge mortgages and is often more accessible for those who may not want to move from their current first charge product or are not traditionally served by the high street. Accessibility to second charge products is important, especially for those clients who may have a less than perfect credit rating or who have unusual circumstances. These products are crucial in aiding longer-term financial recovery and re-establishing a good credit history. 

Fees can differ between first and second charge mortgages. The fees structure within the second charge market has been highlighted more recently and more introducers are looking to align their fees with first charge products.   

Commonality between the two sectors will assist the changes that have been implemented and the fact that the process is now very similar is a further positive move.

Master intermediaries now have a much larger target audience as more and more mortgage intermediaries consider second charge loans. It will therefore become increasingly important for them to ensure they have the required resources to accommodate the uplift in inquiries and the necessary knowledge to make sure the advice being provided is at a high level. Experience and qualifications will play a major role moving forward.

The new European directive will continue to deliver new opportunities and drive innovation in the second charge market, which is continuing to go from strength to strength, and this will ultimately make the sector even more attractive as a result. 
 
The MCD will continue to boost the second charge market with greater volumes of inquiries and business as a result. Second charge mortgage lenders will continue to innovate and add to their existing offering. 

The days of the dismissal of a second charge are over and the customer journey should now come with more options than ever before. Not to make the process more complex and complicated, but to ensure that the final recommendation is absolutely in keeping with the needs of the client.



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