Second and subsequent-charge mortages have been key beneficiaries of the Mortgage Credit Directive (MCD), which has opened up the market and led to increased competitiveness for consumers, according to specialist broker V Loans.
Marie Grundy, managing director at V Loans, said although it was early days, the MCD had already helped speed things up and that some second-charge mortgages were able to complete within a matter of days, once a recommendation had been made to a borrower.
In place since 21 March, the new EU-wide rules brought second and subsequent charge loans under the same regulatory regime, with the same advice process for both. This means that to remain independent, brokers now need to include second charge in their scope of service
Data collected by The Loans Engine during the first week post-MCD found that eight out of 10 directly authorised mortgage advisers opted to provide advice on second-charge products and retain their independence.
Ray Boulger, senior technical manager at John Charcol, said: “Last month’s regulatory changes will give seconds more exposure, but will also tighten up some criteria. While speed is always a consideration in selecting a lender, for most clients looking to raise funds, it will not take precedence to getting the best deal.”