There is no doubting that the mortgage market’s level of complexity – particularly in the specialist lending sector – has grown in the past few years, and unsurprisingly, there can often be a sense that it is difficult to keep up to speed with all the changes and developments taking place, especially in niche product areas where advisers might not be conducting regular business.
In those circumstances, advisers might seek to use the services of a specialist broker who could ensure the client has access to all available deals and other benefits that a non-specialist might be unable to offer.
As the number of niche sectors grows, demand could increase for specialists that can share product knowledge, provide access to lender propositions, and source and advise those borrowers for whom a more specialist mortgage is required.
Solutions, you will find
In the majority of cases most conventional brokers will pick up the phone and ring their chosen master broker in order to source a particular deal for their client. This is because the deal required generally does not fit the normal high-street/mainstream lending offering and therefore an alternative needs to be found.
Master brokers can help find the most appropriate solution and in some circumstances recommend a combination of solutions that the conventional broker might not have thought of.
They will have a good idea of which lender will be most likely to assist and they will also have a good handle on the potential rates and fees involved even after a few minutes of chatting through the case.
Benefits, there are
Increasingly there are a number of further benefits to using a master broker. For instance, most now have their own sourcing systems for bridging loans, second-charge or niche residential mortgages, and can also consider allowing conventional brokers access to these for a relevant licence fee.
In the past 12 to 18 months more master brokers and specialist operators have recognised the need for such systems, which can be used to drill down into the often more complex requirements of certain borrowers, and to provide a range of solutions.
In terms of process, after the master broker provides a solution, the conventional adviser would then present the broker’s suggestions to their client, and decide which deal would provide the most suitable outcome. They would proceed further with the deal and complete the master broker’s application form.
In some circumstances, this standard application form can be used by a number of different lenders, saving time if the case needs to be re-brokered with another lender. This is a significant benefit for the adviser, who otherwise might have to go through the same process with multiple lenders across different products. With the master broker’s support this is not necessary, plus the master broker also acts as a packager in the true sense of the service and manages the case through to completion in many of these scenarios.
Since the implementation of the Mortgage Credit Directive (MCD), most master brokers have to become Financial Conduct Authority-approved and authorised to give advice. This means they can offer to deal with clients directly and pay a small introduction fee to the relevant introducing broker rather than acting as a traditional packager.
