Many brokers still searching for interest-only criteria
Interest-only mortgages maintained their place as one of the most popular criteria searches on Knowledge Bank during August, its latest Criteria Activity Tracker has showed.
Interest-only loans made their very first appearance in July’s index.
Nicola Firth (pictured), chief executive of Knowledge Bank, said: “We are entering an unprecedented period of change in the country both politically and economically.
“The mortgage sector has never been more fluid and we can see from these results that product types rise and fall in popularity from month to month.
“As a result keeping up to date with products and their accompanying criteria has never been more challenging.
“It is worth repeating the startling fact that there were almost 30,000 changes to criteria in the first half of 2019.
“As Knowledge Bank knows from working with the FCA, the regulator is well aware of the pace of change in our sector.
“However, there is little doubt that in a market of such product volatility there remains the risk of a tsunami of accusations of inappropriate product recommendations in coming years.
“That is why it is so critical that brokers compile the strongest possible evidence now, during the advice process.”
Other activity in the residential sector showed searches for ‘right to buy’ loans which made their first appearance in the top five in July however dropped out of the index in August.
Regulated bridging was the top search for the bridging sector, whilst maximum LTV searches fell behind searches for minimum loan amount.
The search for minimum loan amount also moved up to second most searched in the commercial category.
Firth added: “In five years’ there will undoubtedly be sourcing evidence that a ‘cheaper’ product was available but not necessarily the understanding or evidence that the client did not meet the qualifying criteria.
“Solid compliance evidence of criteria searches is now a business-critical activity.”