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Why choose a secured loan?

In the interests of "Treating Customers Fairly", it's important that you consider all the options available to your client.

Here's a few reasons why you should choose a secured loan

Traditionally there have been three main ways for a mortgage broker to raise extra cash for their clients – Remortgages, Further advances and Unsecured loans; however there are many reasons why these 3 options may not be suitable.

Remortgage

  • The client may be tied to a fixed / discounted rate and may not want to give up a low rate or they may face high redemption penalties
  • Possible valuation, broker and legal fees
  • Insufficient income (based on income multiples)
  • Purpose of loan may be unacceptable
  • Can take months to complete
  • The client may be currently in arrears, in this case they could only remortgage with a sub-prime lender at a higher rate

Unsecured loan

  • Normally restricted to shorter term (1 - 5yrs) which can mean a high monthly repayment
  • All applications credit scored which often results in many declines
  • Advances normally restricted to £15k but in cases of adverse credit this can usually be far less

Further advance

  • Insufficient income (based on multiples)
  • Purpose of loan may be unacceptable
  • The applicant may be in arrears with their current lender or restricted by current lending criteria

Mortgage brokers are now seeing the greater benefits of offering Secured loans to their customers.

The benefits of a secured loan

  • More generous income criteria, as it is based on an affordability calculation
  • Most legal purposes accepted as purpose of loan
  • Arrears considered on many plans
  • First mortgage can be left in unaffected
  • All costs e.g. valuation and BSQ paid for by the Master Broker
  • Quicker Completion time
  • Secured loan could be arranged with the borrower able to keep existing mortgage rate
  • Clients can borrow between 5-30 yrs
  • More flexible criteria
  • Advances from £5,000 - £No Upper limit (on referral)
  • Redemption only 1 months Interest (plus payment of current month)
  • Broker fees / lender fees are added to the loan

Don't Forget! Using Promise Quote also allows you to underwrite for Unsecured loans, or refer for debt solutions – Maximise your business and your income.