UK mortgage advice firm Finance Advice Centre has set its sights on further growth in 2017 after launching a new in-house loans service to meet the rising demand for second mortgages.
The company, which is based in Raynesway, Derby, has begun directly handling applications for secured and unsecured personal loans, following an increase in the numbers of clients looking to borrow more money.
Finance Advice Centre used to refer customers to third-party loan brokers but believes it is the first company in the city and one of only a handful of adviser firms nationwide to bring the service in-house.
It says its decision was prompted by an increase in the numbers of inquiries for loans, especially secured loans, which are taken out against an owner’s property and, as a result, are known as second charge mortgages.
The rise has come in the wake in a change in industry rules last year, contained within the Mortgage Credit Directive, which brought second charge mortgages under the Financial Conduct Authority’s Mortgage Conduct of Business rules.
It meant that homeowners would be better protected and could borrow more money, while the loans have found favour with the UK’s growing numbers of mortgage prisoners – homeowners who, due to lenders tightening their affordability criteria, are being refused new deals and so need to look elsewhere for extra funds.
Some experts are predicting that the second charge mortgages market will grow by 10% by the end of the year, with reports putting the average amount loaned out at around £60,000 to £70,000.
Finance Advice Centre has offered all of its mortgage advisers the opportunity to undergo extra training in order to offer loans to clients, while it will also seek to recruit more advisers to deal with the extra demand.
Matt Cassar, managing director of Finance Advice Centre, said: “We have always kept our eyes out for new ways to serve our customers due to changes in the law and customer behaviour and offering secured and unsecured loans directly was a logical step for us.
“Second charge mortgages are becoming increasingly popular at the moment because rates are low and they can be a quick and easy lifeline to people who, for whatever reason, can’t or don’t want to remortgage.
“It has taken us months of hard work to get to the situation where we truly have access to the whole loans market and we believe that we are helping to lead the way in the industry when it comes to arranging loans in-house.
“This move benefits all parties and we would hope that 10% of our business will involve arranging loans this year. We are also expecting to recruit new advisers to help us grow the company in this up-and-coming area.”
Matt, who used to play professional cricket with Derbyshire and Northamptonshire, founded Finance Advice Centre in 2014. The company, which has 50 advisors and administration staff, offers its customers access to a full range of financial services, including insurances, mortgages and utilities suppliers.