There has been a 14 per cent uptick in searches for second cost mortgages, knowledge from a sourcing system platform revealed.
Data from Knowledge Bank which have been collected for a dual-branded Pepper Money Specialist Lending Study confirmed the vary of questions requested by brokers regarding second cost instances had broadened.
The evaluation of behaviour and tendencies on the Knowledge Bank platform confirmed there was an increase in individual standards searches with 77 extra occurring.
The high search phrases for second cost mortgages had been debt consolidation, debt administration plans, defaults over £300 or registered within the final three years and credit score restore.
This corresponded with searches for mainstream residential mortgages, the place the highest 5 searches had been missed or late funds, defaults registered within the final three years, defaults registered greater than three years in the past, capital elevating for debt consolidation and defaults over £500.
Rising curiosity in second cost mortgages
Nicola Firth, founder and CEO of Knowledge Bank, stated: “It was interesting to see that the top causes of adverse credit in the Pepper Specialist Lending Study mirrored exactly what we’ve seen brokers searching for on Knowledge Bank when trying to help their clients. “Missed or late payments” dominated searches.
“Second charge mortgages have been a talking point throughout the year. They provide a means for clients to reset their finances and get back in control. It is a route that requires specialist training to complete, but one that offers a more holistic approach to the advice journey for clients. You can see from the top five searches why second charges are such a hot topic, and the advice around these is key.”
Ryan McGrath (pictured), second cost gross sales director at Pepper Money, added: “According to our Specialist Lending Study, the most well-liked use for a second cost mortgage amongst these clients surveyed is for home enhancements. Only one in 4 folks (27 per cent) would think about using a second to consolidate money owed if it lowered their month-to-month credit score invoice. This might be indicative of the final lack of buyer consciousness of seconds, as the highest Knowledge Bank search time period for the product final yr was debt consolidation. Plus, nearly all of our completions are for debt consolidation.
“With the ongoing cost-of-living crisis continuing to put a squeeze on household finances and more people turning to credit to cover day-to-day costs, brokers have an opportunity to improve awareness of seconds and help customers get their debts under control and reduce their outgoings through debt consolidation. Simplifying multiple debts into a single repayment not only makes things simpler but can also dramatically reduce the cost of repaying that debt. It may not be right for everyone, but we think brokers will see even higher demand for second charge mortgages for debt consolidation in 2024 than they did in 2023.”
From analysis final yr, Knowledge Bank discovered that the monetary panorama continued to problem lenders and debtors.
Shekina is the industrial editor at Mortgage Solutions, YourMoney.com’s sister title within the B2B business. She has over 4 years’ expertise within the B2B publishing market, with earlier industries together with the accounting, pet, funeral, hospitality, retail and jewelry trades.
She at the moment studies on present occasions within the mortgage market and liaises with monetary shoppers to supply sponsored content material.
Follow her on Twitter at @ShekinaMS
