Lenders should look into micro mortgages
Cheshire Mortgage Corporation has warned that brokers could be missing out on a group of potential borrowers, with plenty of opportunity to sell micro mortgages to use for “almost any purpose”.
According to Cheshire, clients with no mortgage outstanding often look for a small amount of money to fund some home improvements.
However, most traditional lenders will not lend sums of money smaller than £25,000, with this option often left for specialist lenders.
And the lender has said that people who have paid off their mortgage in full or have inherited property are perfect for a micro mortgage.
It said that this group often has unencumbered properties, which means a secured loan wouldn't be available to them, and they would therefore need to find alternative ways to raise funds.
National sales manager Nick Jones said: “There are a number of people out there who aren’t looking to borrow large amounts on a mortgage, so will be ignored by high street lenders.
“There is a real opportunity for brokers to generate further business if they consider offering a product like a micro mortgage.”