Magellan Homeloans has stated that it will pay procuration fees at exchange of contracts with immediate effect.
The firm believes that it may be the only UK lender to pay at this earlier stage, rather than the traditional wait until completion.
It sys that enabling payment at this point provides “significant” cash flow benefits to intermediaries. Each of the mortgage broker, packager and network can receive their income anywhere from a few days to several months earlier than usual. Magellan will process the procuration fee for payment upon written confirmation from the solicitor that contracts have been exchanged.
Jason Neale, sales director at Magellan Homeloans, said: “We understand the amount of time, energy and money that mortgage intermediaries invest in a mortgage application long before it arrives on our desk. The investment continues until the mortgage completes which can often be months down the line.
“This is particularly significant on new-build homes where exchange to completion can be weeks, if not months. The fact that we also accept builder gifted deposits on these properties helps to make these transactions more attractive.”
Gina Blagden, head of residential mortgages at Brightstar Financial, added: “This is a fantastic initiative from Magellan which will be warmly welcomed by mortgage intermediaries. We look forward to seeing our brokers benefit from the improved cash flow when dealing with Magellan.”