A well-known packager has claimed that brokers are missing a trick by not considering secured loans.
“Advisers are in danger of missing a huge opportunity,” says Tony Salentino of Complete FS.
“Secured loans represent a far better and more sustainable business stream than most other supplementary income earners that have been marketed to intermediaries, such as will writing and debt management.”
Salentino argues that a defining point was reached when mainstream mortgage lenders moved away from interest only, which, on top of the tightening of criteria, caused a alge group of borrowers to be unable to remortgage to raise capital.
He added: “For many brokers we have spoken to, the door that had been closed on their clients trying to capital raise by remortgaging, we were able to reopen when we explained the feasibility of using a secured loan, which sits alongside the mortgage and provides the liquidity and flexibility which clients need.”
Gary Bailey, sales and marketing director at Blemain Group, said: “The market for secured loans has already increased by 19% this year with completions running at over £30 million per month. Part of that is due to the underlying value that secured loans represent in terms of cost effectiveness, no upfront fees, convenience and transparency.
“However, with the growing number of homeowners unable to remortgage, secured loans are being recognised by intermediaries as one of the best ways to provide much needed finance for those clients and build a valuable source of future business.”
We speak to a lot of brokers. Many understand and appreciate the value of secured loans. But there are still a lot who either think they are the work of the devil or they just don't consider them as they are so wrapped up in FSA regulation that they approach every enquiry thinking "what's the best MORTGAGE I can get for my client" rather than considering what the best SOLUTION is. In so many circumstances a secured loan will be more beneficial to the client than a remortgage, that there just isn't enough space to list them here.