Tony, Same old, same old...
Storm as brokers we all have stories like that - never mind the second charge brigade, we very often turn away first charge applicants based on best advice and not being in the applicants’ best interest, only to find some money grabbing broker not concerned with the wrath of the FSA or what is best for the applicant.
We offer second charge products, but being directly authorised we apply all the same principles as we do for first charge products.
I have seen more and more applicants with problems where they have borrowed over and above the value of their property, believing that they have no need to plan for changes in their circumstances, coupled with, very often borrowing 6x + income.
I know there is some that believe there is nothing wrong with this sort of borrowing if the applicant is seemingly able to afford it at the time. But what about when something goes wrong! There is nowhere to turn and things quickly go from bad to worse, and people start taking expensive credit to repay secured borrowing, when in most cases, all that is needed is a little respite from a temporary cash flow problem and the ability to perhaps release or raise a tad more from equity. You can’t do that when you have already borrowed 125% and 6x income…
I wish I could get the stats for the number of applicants that had taken first and second charge secured from other brokers that had been turned away by us for ‘not in clients best interest’. £ to a pinch the failure rate would be massive….
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