United Trust Bank (UTB) Mortgages for Intermediaries has revealed it will offer binding offers with special conditions, including first mortgage consent, in order to reduce second charge application to offer times by around five days.
UTB introduced this change in recognition of the fact that speed to offer is an important driver for second charge applications, in order to significantly benefit brokers and their customers.
UTB noted that it was common for first mortgage lenders to place a restriction at the Land Registry that requires their consent before a second charge loan can be offered; acquiring this consent often causes delays to the second charge offer.
Issuing a binding offer without consent, or without a special condition for consent, can technically place the borrower in breach of their first mortgage terms and conditions, potentially creating a poor customer outcome and contravening Consumer Duty.
With immediate effect, all UTB second charge loan binding offers can now be issued with special conditions for a range of non-affordability linked requirements.
These requirements can then be provided after offer, but before completion.
Feedback from a recent pilot scheme showed that this process enhancement could reduce the average application to offer time by around five days.
Examples of where special conditions can be used include: first mortgage consent to second charge; up to date redemption figures; bank details for items of debt consolidation; and deeds of consent for non-dependent residents.
Buster Tolfree (pictured), director of mortgages at United Trust Bank, said: “We entered the Second Charge market to shake it up, and nearly 10 years on we’re still innovating and improving to grow the market and help our brokers complete more business.
“Speed to offer and completion is probably the most important success factor in a Second Charge Loan application.
“Reducing a customer’s wait for a binding offer by 5 days is a huge reduction and what we have seen in the pilot is that the reduced delay significantly increases the possibility that the loan will complete.
“Both we and brokers waste less time on abandoned cases and are more productive and profitable as a result.
“And customers get their money quickly to crack on with their home improvements or alleviate their debt worries. It’s a real win-win-win!”
