Precise Mortgages has made many changes to its second charge product range, in a bid to offer intermediaries market leading rates under new regulatory requirements.
The specialist lender has reduced its product fee by £500 to £495 and cut its prime rates by up to 2.25 per cent a year, with its tier one range at 65 per cent LTV now starting at 4.45 per cent plus the bank base rate.
Cuts have also been made to its more flexible tier two products, with reductions causing the 65 per cent LTV loan in this range to start at 5.45 per cent plus the bank base rate.
Other changes included introducing a preferred panel of master brokers, who have exclusive access to the new range, and the improvement of lending criteria to “simplify” the process.
The preferred panel comprises Brightstar Financial, Colonial, Enterprise Finance, Fluent Money, Norton Finance, Positive Lending, Promise Solutions, The Loans Engine, The Lending Wizard, Loans Warehouse, V Loans and Y3S Loans.
According to Precise Mortgages, other highlights include its simplified scorecard cut-off strategy, which allows more clients to access low rates, no increase of reduction in LTV for the self-employed, and the availability of loans for any purpose.
The minimum loan size varies by product, but it is “typically” £10,000, while the maximum size of a loan is “typically” £400,000, although it can reach £2m on referral.
The primary applicant must be earning at least £15,000, and have been in the same job on a permanent basis for a minimum of three months. And they must have had 12 months continuous employment.
Self-employed applicants, meanwhile, must typically have been trading in their business for at least two years.
Provider view:
Simon Carr, director of second charge lending for Precise Mortgages, said: “Second charge loans are now regulated by the FCA. We are not only leading the way on responsible lending, but we are also launching market-leading products so that brokers can offer their clients an even better solution.”
Steve Walker, director of Promise Solutions, said: “The latest products really tick the boxes for brokers, networks and consumers, and offer a market-leading combination of rates, low fees and choices of tracker or fixed rates.”
Marie Grundy (pictured), operations director of V Loans, said: “With networks and brokers continually looking to drive the best possible customer outcome, Precise Mortgages has again demonstrated its commitment to this with a market-leading rate of 4.45 per cent (+BBR) a year.
In addition, we are seeing an increased demand for fixed rate, second charge products. And the inclusion of two- and three-year fixed rates within their product range, will ensure that there is increased choice for borrowers who wish to have peace of mind with a monthly fixed payment.”
Adviser view:
Peter Gettins, product manager at Somerset-based London & Country Mortgages, said: “We do not do second charge at all, as we do not have much call for it. Where we do get the odd enquiry, we refer them on to a specialist. We have a referral process in place for the very few who do want it.”
Stuart Cunningham, director of operations at Norwich-based Commercial Trust, said: “The increase in lenders in the buy-to-let marketplace offering secured loans gives customers who are on low tracker rates the benefit of being able to raise finance, while still enjoying the advantages of leaving cheaper first charge finance in place.”
Charges:
The product fee has been reduced from £995 to £495.
Verdict:
Despite a toxic reputation, news that providers are looking to improve rates on second charge loans while respecting FCA requirements is good for responsible borrowers with poor credit ratings in need of capital.
