Secured lending is changing
He added that second charge lending has done very well over the last year due to its ‘more empathetic approach to individual circumstances’.
He said: “We are already seeing the changes taking place in the makeup of our introducer firms.
“Pure finance brokers are recognising that they must incorporate first charge mortgage advice or they face an uncertain future.
“By the same token, mortgage specialists are having to weigh the advantages of maintaining a true ‘whole of market’ offering by applying for permissions to offer a second charge alternative to a remortgage.”
Crewe added: “We are no doubt gaining business because of the issues being caused by many high street lenders’ interpretation of the affordability rules under the MMR.
“But let us not forget that many borrowers would be less well off if they remortgaged, that is if they can actually get a mortgage.
“If a client’s credit rating has suffered during the recession, a remortgage could be a lot more expensive than leaving the first charge in place and using a second charge loan for the extra funding required.”
Depending on turnover brokers will have to pay up to £15,000 for second charge advice permissions, as Crewe said: “The question we need to ask is how many will want to pay or just hand off and refer clients to specialists for the right second charge advice.”