Imla and Ami have published a joint online guide to lender funding for mortgage professionals, due to “recent and ongoing interest rate volatility”.
The guide – called ‘Understanding lender funding, product pricing and availability’ –explains the different types of funding used by mortgage lenders, and how the type and split of funding sources affects their ability to respond to interest rate changes.
The trade bodies add the manual is “designed to be accessible for anyone in the industry and assumes no prior knowledge”.
Its entries are compiled by technical specialists in the lending sector.
The 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 between 9am to 5pm, Monday to Friday?
- What would happen if a 24-hour product withdrawal notice period became mandatory?
Ami chief executive Robert Sinclair says: “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.
“In addition, we will continue to talk to lenders and other trade bodies about reasonable notice periods for product withdrawal.”
Imla executive director Kate Davies adds: “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 an open dialogue.”
The guide can be found on the Working in Mortgages website, here.
