The Intermediary Mortgage Lenders Association (IMLA) and Association of Mortgage Intermediaries (AMI) have produced an online guide aimed at assisting mortgage professionals in understanding lender funding, product pricing, and availability.
This initiative follows recent and ongoing interest rate volatility which has affected mortgage product availability and exerted considerable pressure on advisors.
The guide dives into the diverse types of funding utilised by mortgage lenders, elucidating how the mix and nature of funding sources influence an individual provider’s responsiveness to interest rate changes.
Among the key issues addressed are the funding of fixed-rate mortgages and the concept of a swap, the reason behind varied notice periods for product withdrawal across lenders, the feasibility of limiting product withdrawal deadlines to the regular business hours of 9-5 from Monday to Friday, the potential repercussions of a mandatory 24-hour product withdrawal notice period, and the subsequent actions lenders and brokers can undertake.
The guide is structured to be straightforward and digestible for everyone in the industry and does not presuppose any prior knowledge.
The explanations are derived from technical specialists within the lending sector.
Robert Sinclair (pictured), chief executive of AMI, said: “Interest rate volatility is the new normal, and unhappily it is causing a great deal of stress and difficulty for advisers and their clients.
“In this environment, understanding the rationale behind mortgage pricing and product availability can give brokers valuable insight to help their customers make good decisions.
“That is why we at AMI and IMLA have come together to create this Q&A guide. In addition, we will continue to talk to lenders and other trade bodies about reasonable notice periods for product withdrawal.”
Kate Davies, executive director of IMLA, added: “We hope this guide will clarify the motivations and constraints lenders are operating within, and promote better understanding between lenders and brokers.
“It is essential we evolve as an industry to meet the demands of a shifting financial climate, and to that end, we are calling on all parties to maintain open dialogue.”
