John Charcol has acquired Simply Finance Group – comprised of second charge arm Simply Loans and mortgage broking arm Simply Finance.
Adding the Southampton-based firm will bolster Charcol’s adviser count by 30 to 115.
Under the terms of the deal John Charcol’s chief executive Simon Knight and managing director Walter Avrili will join the Simply Finance board. Founding directors of Simply Finance, Peter Williams and Ben Larkin, will join the senior management team at John Charcol.
Speaking to Mortgage Introducer, Knight predicted second charges becoming a more commoditised and mainstream product which will be added onto sourcing systems.
In March second charge mortgages will fall in line with first charges as part of Mortgage Credit Directive implementation – and Knight expects this to be a positive for the product.
He said: “Regulatory changes are going to drive huge change in the mortgage industry. The mystique of the second charge process will reduce.
“Being similar to first charges will make things much more straightforward and the up-front fees typically charged for second charge mortgages will likely come down. They will also be added to sourcing systems like Mortgage Brain.
“It’s going to be a much more commoditised product. When most people consider their personal finances second charge mortgages don’t come into their imaginations but if someone is on a low rate tracker or interest-only mortgage it might be the best option.
“It will become more mainstream like it is in the US – second charges shouldn’t be regarded as odd.”
Knight added that Simply Finance will give John Charcol diversity, as it typically processes smaller loans worth around £150,000 compared to Charcol’s £300,000. He added that Simply Finance has a wider geographical spread and is in touch with technology.
He added: “The majority of our customer base is in the South East but Simply Finance has a much wider geographical spread with a good brand. They are mostly telephone based. A lot of people these days will purchase online.”