Secured Loans


A secure armoury


Secured loans are due to come under the FSA’s regulatory umbrella in 2012 but many brokers are still avoiding them. Steve Walker discusses why secured loans should be part of advisers’ armoury


by Steve Walker, managing director, Promise Solutions


With so much going on in the secured loan sector brokers less actively involved can easily be forgiven for not keeping up. The introduction of new products and new lenders is important and exciting and many advisers are beginning to view secured loans as a valuable tool to serve their clients. Increasingly they want to transact loans in a more structured manner than before.


Despite secured loans coming under the wing of the Financial Services Authority sometime in 2012, it makes


by Phil Whitehouse, head of The Mortgage Alliance


I have been puzzled by brokers’ attitude towards the secured loan opportunity with many not offering their clients the option because the client hasn’t asked for it specifically. Customers approach


intermediaries for advice and solutions to various financial situations and when re- financing debt a secured loan


sense to be dealing with loans more effectively now.


Credit armoury Secured loans have for some time provided a viable and profitable alternative to a remortgage, especially where borrowers are tied into their existing mortgage or their circumstances rule out a new mortgage altogether. Even when there has recently been lack of product availability in first charge mortgages, secured loans have remained available to borrowers with varying degrees of adverse credit, to self-employed without accounts or income reference plus a range of income stretch and high loan to value products. But the loan market is improving again


with offers of better things to come. In recent months we have seen the


should always be considered alongside other areas such as a remortgage as an option or discounted if not a viable option. I understand why brokers


may have been reticent about getting involved in secured loans in the past due to some negative press, but there have been vast improvements to redemption charges, interest rates and access to efficient sourcing and applica- tion systems through leading master brokers in the market. Now the FSA has declared that it will regulate secured loans in the future there


46 mortgAge introducer MAY 2011


reintroduction of 90% LTV lending, third charge loans and more recently circa 2% reductions in interest rates courtesy of Link Loans and Nemo. Secured loans now start at 7.9% allowing very favourable comparisons for clients on base rate trackers or with high early repayment charges. Rumours abound that Kensington will


return to the secured loan market as well as four other lenders quietly planning to join the market shortly. The loan market has needed competition and compared to the first charge mortgage market it is much easier for new players to enter the sector. With secured loans innovating and


developing faster than the mortgage sector, average introductory commissions for brokers of around £1,200, plus quality master brokers keen to work with advisers


doesn’t seem to be a better time for intermediaries to take a fresh look at what secured loans can offer.


by Nick Baxter, director, Mortgage Promotions


It has always seemed amaz- ing to me that secured loans have never fully become part of mortgage brokers’ core product ranges. Maybe it was because remortgages were too easy, maybe


lenders asked few questions or maybe secured loans were outside brokers’ comfort zone. Whatever the reason it has


always seemed short sighted to me. Maybe I am too involved in litigation issues, but avoiding secured loans at all costs seems to be stor- ing up another miss-selling nightmare. Although rolling a short-


term lending requirement into a remortgage might seem a cheap option based on monthly payments, it is never going to be in terms of inter- est charged over the whole


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