It looks to answer questions in light of the recent and ongoing interest rate volatility
The Intermediary Mortgage Lenders Association (IMLA) and the Association of Mortgage Intermediaries (AMI) have worked together to produce an online guide to understanding lender funding, product pricing, and availability for mortgage professionals.
The guide aims to explain the different types of funding used by mortgage lenders and how the type and split of funding sources impact individual providers’ ability to respond to interest rate changes.
The online guide answers questions, such as:
- How are fixed rate mortgages funded, and what is a swap?
- Why can some lenders offer more notice of product withdrawal than others?
- Can product withdrawal deadlines be kept within office hours?
- What would happen if a 24-hour product withdrawal notice period became mandatory?
- What needs to happen next, and what can lenders and brokers do?
The trade bodies said the guide, now accessible through the Working in Mortgages website, was created in light of the recent and ongoing interest rate volatility, the impact on mortgage product availability, and the consequent pressure on advisers.
“Interest rate volatility is the new normal, and unhappily, it is causing a great deal of stress and difficulty for advisers and their clients,” stated Robert Sinclair (pictured right), chief executive at the Association of Mortgage Intermediaries. “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 (pictured left), executive director at the Intermediary Mortgage Lenders Association, added that it hoped the guide will clarify the motivations and constraints lenders were 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,” she said.
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