Ten Tips for the second charge market.
Tip 1 – Secured loans –Getting Started.
Our first tip to realizing the benefits of a secured loan is to acknowledge that the range and availability of products can make this form of borrowing extremely cost-effective .For large numbers of borrowers, secured loans present a viable, manageable and straightforward solution to a range of funding requirements. They can be quicker, cheaper and simpler than a remortgage; can be used for a variety of purposes and for many types of client.
Tip 2 – Cost cutting.
Secured loans are often more cost-effective that remortgages; loans can typically be from £5000-2m with terms from 3-30 years. With repayment plans that can be significantly cheaper and less restrictive than remortgaging .The total amount the client repays over the term can be less, with interest only charged on the additional amount compared to a new interest rate being applied to the whole balance of a remortgage.
Tip 3 –Speed is the Key.
One of the major benefits of a secured loan is the speed of application, approval and funding. Regulated secured loans can be typically completed within 17-30 days from the initial application rather than 8-12 weeks required for a remortgage. Secured loans for business purposes can be completed even quicker.
Tip 4 – Diverse Property Types.
Loans can be secured on many residential property types, including owner occupied properties, tenanted properties, ex council properties, high rise flats, non standard construction including precast concrete and timber framed construction.
Tip 5 – Numerous client types.
Secured loans can be more flexible for a wide range of your clients, look out for your clients who have had difficulty obtaining credit in the past, as well as those with excellent credit rating. Many types of income including self employed and those on DWP benefits are accepted. Even if your client has CCJ or arrears they can be considered.
Tip 6- Keeping it Simple.
One of the major advantages of a secured loan over a remortgage is that a secured loan typically involves a 1 or 2 page application form and instant “in principle decision” with completion normally occurring within 24 hours of the lender receiving all the correct documentation. A typical mortgage application can be up to 20 pages and take considerably longer to process.
Tip 7- Managing Debt.
Customers can sometimes get bogged down with several financial commitments, a secured loan can allow a borrower to consolidate outstanding debts, and this solution will enable the client to pay for their existing commitments while restructuring their debt into one straight forward and structured payment arrangement.
Tip 8. – Innovate.
Lenders are returning to the market at the same time as new lenders are cropping up meaning more competition and choice for secured loans
Tip 9 – Keep an eye on the market.
The recession has taught the business world a lesson but it how fresh understanding and knowledge is used, brokers and lenders are best placed focusing on the financial strength of their business, planning for the future and acting with a degree of caution.
Tip 10 – Grasp the Opportunity.
The market continues to be challenging, so collaboration is important, as is keeping up to date with industry progress. Forming partnerships with other intermediaries will add value and keep them in good stead for other unknown developments in the market.
For more help and advice please do not hesitate to contact me.
Until the next time Ian Chambers @HoskinHomeLoans
Hoskin Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority number 613005. The guidance and/or advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK. Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
