Complete FS is looking to break down the high master broker fee barrier to brokers embracing second charge lending, by launching its own low cost fee structure.
The packager now offers a flat application fee of £199 along with the lender’s valuation fee and disbursements.
There is no master broker fee and the intermediary will determine the advice fee to be charged.
Under the Mortgage Credit Directive, introduced in March across the EU, the first and second charge processes have become very similar, so Complete FS has adopted a comparable fee structure as that of the first charge market.
The firm argued this should make the proposition more attractive to brokers, who have historically been put off by high fees.
Director Tony Salentino stated this was one of the main reasons why advisers had been reluctant to adopt second charge loans over the remortgage alternative.
“We are looking to provide a much improved customer journey for secured loan borrowers, which is more transparent and does not involve exorbitant fees. The options we offer are designed to ensure that advisers have a clear choice to offer clients and also decide how much they want to take as a broker fee.”
Maeve Ward, sales and operations director at Shawbrook Bank, added: “Now that seconds are regulated in exactly the same way as first charge mortgages and fees are allowed to be charged upfront, fees have started to come down.”
Last autumn, the Financial Conduct Authority warned mortgage brokers to get ready for the EU directive by applying early to be second charge, or risk losing their independent status.
A few days after the regulations came into force, data collated by The Loans Engine showed eight out of 10 directly authorised mortgage advisers are opting to provide advice on second-charge products themselves and retain their independence.
They suggested the popularity of the ‘package-only’ model being used by a large number of DA firms may surprise much of the master broker market, who may well have prepared for more advisers to introduce and refer clients, rather than provide the advice themselves.
Back in January, secured lending broker V Loans has launched a second charge advisory service, designed to help those advisers who do not wish to take on responsibility for advising on second charge mortgages.
peter.walker@ft.com
