Promise sees significant rise in conversion rates

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Promise Solutions has reported a large improvement in its second charge conversion rates since the introduction of the Mortgage Credit Directive (MCD).

The master broker said its initial figures were suggesting an increase in overall conversions of over 40%.

Steve Walker (pictured), managing director of Promise Solutions, said: “There’s no denying MCD caused massive upheaval across the market and like much of the industry we were concerned about the impact it would have on business levels.

“There was speculation early on that a more detailed sales process with intensive fact finds would reduce conversions as potential borrowers would be less engaged. Added to that we expected more cases to fail due to new affordability models and some loans being deemed unsuitable, many of which might have gone ahead in a pre-MCD, non-advised arena.

“However, our figures show that these factors have been more than offset by a marked increase in the percentage of customers returning application forms and progressing to completion.

“It’s clear a more robust sales process ensures a better understanding and engagement between the adviser and borrower. The advice provided is suitable and well explained and therefore there is less chance of the borrower changing his or her mind further down the line.”

Walker believes the boost in conversions should offer further encouragement to mortgage brokers looking to sell seconds.

He added: “What these figures suggest is essentially MCD has had the desired effect. Customers are receiving better outcomes and are happier as a result and brokers should take confidence from this. Now is the perfect time to get involved with second charges. Rates are at record lows, fees are falling and customers are actively seeking the flexible solutions second charge lending offers.”