April 2018
By Liz Syms, founder and director at Connect for Intermediaries
It is rare to find a mortgage broker today who has a complete understanding of all the lenders and criteria across the different product ranges of residential, buy-to-let, commercial, second charges, bridging etc.
A residential mortgage adviser, for example, will be expected to know about help-to-buy mortgages, shared ownership, right to buy, contract workers and adverse credit loans. A buy-to-let adviser will need to be familiar with HMOs, portfolio landlords, expats, holiday lets and limited company finance.
Yet most brokers will come across clients with one or more of these requirements regularly. While it may not be realistic to expect a broker to provide advice and recommendation to their clients across the whole spectrum of specialist lending, education is absolutely imperative in getting the right outcome for the client.
This is where FIBA can assist. Education starts with ‘what permissions do I need to give advice?’. A broker who, for example, has been advising clients on commercial mortgages may want to extend their offering into the buy-to-let market. What they may not realise, even though business buy-to-let is not regulated by the FCA, is that over 50% of buy-to-let lenders will not accept business from a broker who has credit broking permissions only. They expect the adviser to have full regulated mortgage permissions.
Brokers who trade without the full permissions risk leaving their clients with a disadvantage through a reduced lender panel, meaning access to some of the mainstream providers like BM Solutions and The Mortgage Works would not be available.
FIBA can help brokers to understand their permissions so they know which lenders they can approach and what additional permissions they may need if they are considering expanding their offering.
Building knowledge in the specialist market is also key. This, again, is where FIBA can assist by bringing lenders and brokers together at events and introducing brokers to lenders and product offerings that they may not have come across before.
A buy-to-let adviser could, for example, expand their offering by getting to understand bridging for development or refurbishment. They could expand further by understanding more about commercial or semi-commercial property, which has recently gained more interest from property investors due to PRA changes.
The latest FIBA event saw seven lenders in the room, educating brokers on these very subjects and many deals were placed that would have otherwise continued to sit on the broker’s desk.
For brokers who advise mostly in the traditional sectors, a lot can be gained from understanding the specialist market so they can spot opportunities to help their clients further, even if they then refer those clients to another broker. This means the client gets the best possible outcome, which is exactly what FIBA wants to help brokers to achieve.