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.”