Danny Belton, Head of Lender Relationships, Legal & General Mortgage Club
The specialist lending market is quickly becoming one of the fastest growing areas in the mortgage industry, as more borrowers struggle to meet the strict and vanilla-like lending criteria of the high street. Although volumes are lower compared to the wider market, specialist mortgage lenders’ gross annual lending has increased by 19% year-on-year since 2009, according to the Intermediary Mortgage Lenders Association (IMLA).1
One reason for this increase is specialist lenders’ ability to deal with more complex mortgage applications, many of which would be rejected by high street banks. This includes applications from customers with complex sources of income or the self-employed, contractors and entrepreneurs, all of whom make up a significant majority of specialist lending cases. Brokers, therefore, need to be aware that as the UK workforce continues to evolve, these types of customer are only going to grow in number. Already, the UK has nearly 5 million self-employed workers who account for nearly 15% of the workforce.2 This trend has been picked up on by lenders, including Precise Mortgages whose flexible approach to the self-employed has started to result in more self-employed and contract workers considering specialist lenders.
Similarly, a small blip in a person’s credit history is often due to easily explainable credit issues, such as a missed phone bill, expired credit card, a change in bank account, or a small one off pay-day loan. Many of these customers are not repeat offenders and often have a good credit history before and after such a blip, yet they will often be turned away by the high street.
As a result of the growth in the specialist lending sector, there is a clear need for brokers to understand specialist lending criteria and how the process differs from traditional lenders. Some brokers have remained cautious of specialist lending, not wanting to deal with complex customers or unfamiliar lenders. However, there are significant opportunities for brokers in specialist lending, as the number of borrowers with adverse credit continues to grow.
Specialist lenders, such as Precise Mortgages, are able to cater for those who fall outside the mainstream lending criteria. With its approach to underwriting and its credit risk management process, Precise Mortgages assesses applications on a case-by-case basis to help customers underserved by high street lenders get the mortgage or loan they want. This approach means Precise Mortgages can use the human touch to take each borrower’s personal situation into account and identify the best products for them.
Even if your customer already has a mortgage with a high street lender, the specialist lending market can still help. For example, bridging and second charge loans can meet the needs of certain customers, yet are only offered through specialist lenders. It’s one of the reasons Legal & General has seized on the opportunity and launched a direct bridging and seconds club route with Precise Mortgages and other lenders with a view to growing this area of the market.
Over the coming years, we hope to see more and more brokers seize the opportunities that specialist lending brings, so that each and every customer can find the right solution for their needs, regardless of their circumstances.
Kayleigh – Telephony Team
Imagine if we really needed to get in touch with you only to find that the number we’d got was no longer in use, or even missing, and the email address was out of date.
It sounds like such a small thing, but you wouldn’t believe how much it can hold up a case if we haven’t got your most recent contact details.
To help us keep our records up-to-date, we recently sent out an email to all the brokers on our system asking them to check their details. By making sure we’ve got your correct phone number and email address, you can avoid frustrating hold-ups and speed up the application process.
I’m sure you’ll agree it’s a simple thing, but it can mean the difference between us being able to get in touch with you, or not be being able to contact you and delaying the case.
You might find we need to contact you while we’re processing a case to let you know how it’s progressing or if we need anything further from you. I’ll sometimes get a call from a broker or one of their admin team asking how a case is going, without them being aware we emailed them a couple of days before asking a question or because we needed some more documentation from them. It’s worth keeping an eye on your inbox to make sure you haven’t missed any emails from us.
Matt – Underwriting Team
Hi, I’m Matt, and I’m proud to be one of the managers in our Mortgage Underwriting department.
In the early stages of planning these blogs we had numerous discussions about what we wanted to talk about. We all agreed on the same thing – we wanted to create content to provide support and place real focus on how to submit your cases with ease. I spoke with some of the team for their thoughts and we all agreed that we want to work together to ensure your customer’s case is processed quickly and painlessly.
The nature of specialist lending means that cases tend to be on the more complex side. We understand the delays in processing can be frustrating for all, especially customers who are waiting to complete on their mortgage. This is why we are committed to working with you to make it as smooth and simple as possible.
As a broker, you’ll already know your customer’s case inside out. By sharing this information with us from the very start of an application, especially for the more complex cases, you’ll be giving us the best chance of completing a case quickly and efficiently. If we know what you know from the outset, the less likely it is we’ll need to get in touch with you for more information.
To help you find out exactly what we need, we’ve created Buy to Let and Residential Mortgages submission guides. Click here to read the Buy to Let Mortgages submission guide and click here to view the Residential Mortgages submission guide.
By providing us with this information means your customer will get the mortgage or loan they need, and you’ll have more time to help other customers. I’m sure we all agree this is a shared goal!
When you’re helping secure your customer a mortgage or loan, I doubt you give much thought to the people who work behind the scenes to deliver our lending solutions.
Behind the familiar faces from Precise Mortgages you deal with on a daily basis, there’s a huge team of people developing new products, processing customers’ cases and answering your questions.
It’s one of the reasons we’ve launched Thinking Outside the Blog: to give you an insight into the work of our underwriting and customer contact teams, as well as an understanding of how a specialist lender works and why we sometimes ask for the things we do.
Every fortnight we’ll be posting insightful and interesting content on our website, revealing ways you can get your customers’ cases completed quickly and with as little fuss as possible.
We’ve assembled a team of bloggers from our Underwriting and Telephony teams who will be sharing their specialist knowledge. A different member of the team will write a blog every fortnight, giving you a unique insight into Precise Mortgages – improvements we’re making and what you can do to make sure your cases are processed quickly and smoothly.
We’re committed to working with your feedback which will help us achieve this.
If you’ve got any suggestions for things you’d like to see covered in future blogs, please let us know by emailing [email protected].
Thanks for reading,