Seven in 10 brokers say they plan to recommend a second mortgage for the first time this year, according to Central Trust.
The intermediary lender only says 71% of advisers say they plan to place a second charge for the first time in 2022, following an online survey with more than 100 brokers attending virtually.
The survey also found that a majority of brokers were having difficulty securing loans for the self-employed and entrepreneurs due to income issues related to Covid-19.
It revealed that 61% of advisers said they had problems placing such cases after a client’s income fell during the height of the health crisis, but then recovered to pre-pandemic levels.
Maeve Ward, Director of Business Operations at Central Trust, said: “These findings underscore the fact that there is still a real need for education in the market about second mortgages and how and when they can be an alternative to a new mortgage and a good result for the client. in certain circumstances.
“I’m confident that when brokers fully understand how and when a second mortgage might be the right outcome, they will look to offer them directly or through a prime broker.
“Many independent borrowers will be looking to raise capital and a second charge may well be the best solution.
“However, most lenders operating in the market will not meet the independent borrower requirements as they will assess the income of the latest SA302. [tax calculation] – which will relate to the time of the pandemic – and will not consider what happened before or how the business might now operate at pre-pandemic levels.
“Brokers should take the time to familiarize themselves with the secondary fee market. This way they will both follow the spirit of the Mortgage Credit Directive and be much more likely to help their clients find the best solution for their situation.
The webinar poll took place during a Lender Spotlight session, in conjunction with criteria platform Knowledge Bank, based on the specialist lending market on February 16.
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