Mortgage brokers and other professional advisers are already embracing secured loans, because of the growing number of clients labelled as mortgage prisoners, wishing to raise capital and unable to remortgage, says V Loans, the national secured loans packager.
“We have been surprised by the number of calls we are already getting from brokers, who never having done a secured loan before, because of the restrictions that are already beginning to bite in the mortgage market.” commented Dave Pinnington, Business Development Director at V Loans.
With the FSA estimating that over 5 million people who took out a mortgage between 2005 and 2011 are likely to be ‘prisoners’ of their current lender due to the elimination of self certification, high LTV’s, negative equity and the new restrictions on interest only, according to Dave Pinnington, secured loans could be one of the few options available to brokers to offer clients keen to raise capital.
Dave Pinnington added “ Regardless of whether the regulator allows lenders more leeway under the transitional arrangements proposed in the MMR, the fact remains that clients identified by the FSA as likely to be stuck with their current lender, there are a high percentage requiring access to capital, who traditionally relied on remortgaging or further advances for whom secured loans could be their only route to accessing capital.”