Mortgage Market Review and Independent Mortgage Advice

mortgage market review

Mortgage Market Review strengthens Independent Mortgage Advice

The use of the word independent in connection with mortgage advice is very much a grey area since the advent of regulation nearly 10 years ago.

In the current mortgage market borrowers are too often unclear as to what they are being offered in terms of choice. A borrower may assume that a mortgage broker is selecting products from the entire market when that broker may be working from a limited panel.

As a result of the Mortgage Market Review a firm must provide the customer with information explaining whether there are any limitations in the range of products that they offer.

Mortgage brokers working from a limited panel after April will need to provide a list of the lenders they use, or advise the client they are working from a restricted panel and that the client has the right to request a list of the mortgage lenders used.

From April a firm cannot call itself an ‘independent mortgage adviser’ unless its product range across the relevant market is unlimited.

Therefore, the borrower who wants independent mortgage advice after the Mortgage Market Review can expect that a regulated mortgage broker branding themselves as ‘independent’ actually is independent.

There will in effect be three channels available to the borrower:

  • direct deals – single lender, lenders products only
  • Mortgage broker/adviser – multiple lenders but limited panel
  • Independent mortgage broker/adviser – multiple lenders, product range unlimited

Mortgage Market Review – coming 26th April 2014

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