Are mortgage brokers truly embracing second charge?

Master brokers and second charge lenders have taken steps to ensure that brokers are informed and educated on seconds, but they may still be left feeling a little nervous about entering the market. It is crucial that brokers get up to speed quickly and become aware of what is required of them, which is to present second charge loans as an option as frequently as first charge loans.

It is important for brokers to remember that second charge mortgages can help a variety of people; there is no ‘typical’ customer.

These loans aren’t only for those who have fallen victim to poor circumstances and need to rebuild their credit rating. In fact, high net worth individuals are increasingly using second charge loans to raise more finance than they would be able to access through a personal loan.

A second charge may also be a suitable option for customers who:

- Want to retain their existing mortgage
- Are looking for flexibility in the repayment of the loan
- Want to use the loan for reasons not permitted by other forms of finance
- Are seeking a higher Loan-to Value ratio than is otherwise available
- Want to use a buy-to-let property as the security

Because they cater for such diverse circumstances, it is important that brokers include second charge mortgages as part of their standard toolkit. This way, they can assess each client on an individual basis and recognise the opportunities for second charge when they present themselves.

If that is not incentive enough, brokers should also be aware that failure to get on board with seconds could leave them at risk of having to answer to the regulator.