best advice toss the questions to Lisa Muscroft, Head of Loan Brokerage, Norton Broker Services.
Best BA Advice: Do you think there are still times when brokers advise clients to remortgage, when in fact a second mortgage might be the most appropriate solution?
Lisa Muscroft LM: Yes, but that’s mostly due to a lack of knowledge and education about second mortgage products, not because they give bad advice. They simply take the route they are most comfortable with.
There is a lot of misunderstanding in the market regarding second mortgages and the industry needs to do more to educate brokers on the opportunities in the sector.
An obvious example would be when a customer’s credit history has deteriorated or they have adverse credit. Instead of remortgaging, they could keep a low first charge rate and raise money with a second mortgage instead.
BA: What do you think are the biggest myths in the second charge market?
ML: That the products are intended for debt consolidation only and that they are complex and only serve customers with an adverse credit history.
Another myth is that customers are wary of second charges because of their high rates and involve a lengthy application process. It’s not true. Second mortgage rates are extremely competitive and the time to release funds is extremely fast, sometimes taking only a few days.
BA: What are some of the more common uses for second mortgages provided by Norton Finance?
ML: I would say the majority of our second mortgages are used for debt consolidation, home improvement or buying a caravan or holiday home. It’s pretty standard in the market.
Sometimes borrowers take out a loan to pay for vacations and we also get inquiries from borrowers looking to pay their tax bill.
BA: Is there anything about the second mortgage application process that brokers should be aware of?
ML: Probably the process is extremely streamlined and efficient, which means that funds can be released much faster than in the first fee market. Applications can be completed within a week, which is unheard of in the consumer market.
At Norton, we have our own bespoke procurement system with Lender API, which is also connected to Equifax and Land Registry. This allows us to instantly give decisions to the lender, which helps speed up the application process.
We also have a dedicated team of advisors who handle inquiries from start to finish, providing consistency for brokers and giving them a single point of contact.
BA: What advice would you give to brokers who say they are too busy to offer second mortgages?
ML: Let’s eliminate the stress. Our call center is open seven days a week, so refer your client to us with some basic information and we can do the rest. You will still own the client, but we can do the work and provide the advice, leaving you free to focus on other business.
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