Alan Cleary - Managing Director
We’ve been amazed with how popular Thinking Outside the Blog has proved to be since we launched it earlier this year.
Since our first blog in April, more than 3,000 of you have logged on to read the weekly articles which give you an insight into the work of our teams, as well as an understanding of how a specialist lender works and why we sometimes ask for the things we do. We’ve also been honoured to have Danny Belton, from Legal & General Mortgage Club, and Paul McGonigle, from Positive Lending, write guest blogs for us.
I thought I’d take the opportunity in this week’s blog to reveal the five most popular topics we’ve covered over the past few months in case you’ve missed any of them. If you’re new to Thinking Outside the blog, why not read on below and find out why it’s proving so popular with other brokers?
Keep an eye out in the coming weeks for more exciting blogs, including guest articles, details about product launches and, of course, ways we’re making it as easy as possible for you to place your cases with us.
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].
Luke - Telephony
As a specialist lender, we know that not every application is straightforward.
If there’s something you think we should know about, you can let us know by completing our Additional Information Form. Using the form and telling us your customer’s background helps us assess a case quickly and makes the process so much easier. You can download a copy of the form by clicking here.
Let me give you an example of a delay on a case which could have been avoided if we’d been given some important background information from the beginning. I was about to go through to completion and had called the customer to ask if they’d read through the offer details – they told me they couldn’t as they were visually impaired. Although I was able to send out a Braille version of the document, it took time to organise a translation, which caused an unnecessary, and frustrating, delay.
I’ve included some examples of information brokers have provided us with in the past that has helped us to process their case without having to go back to them to ask any more questions. It’s by no means a definitive list. Every case is different so the sort of questions you’ll need to ask will differ, but it gives you an idea of the sort of additional information we find useful if your case is a little more complex than normal.
If you’re still unsure and have a question, please give the Telephony support team a call on 0800 116 4385.
Manvir - Telephony
On the rare occasion I get a call from a broker asking why there’s a delay in completion, it’s usually because their customer hasn’t returned an offer document to us.
When we make an offer, we’ll post an Acceptance of Offer document out for personal ownership buy to let and residential applications with a copy for the customer to keep, as well as a copy that they need to sign and sent back to us before we can complete their application. I’ve been working on the Telephony team for more than two years now and, in my experience, the majority of completion delays are caused when we don’t receive this signed copy of the document back from the customer.
It’s a similar story for limited company buy to let applications, except instead of an Acceptance of Offer document we need the person who is providing a personal guarantee to complete and sign a Nominated Legal Advisor Form. As with personal ownership buy to let and residential applications, we can’t complete until we receive a signed copy of the appropriate documentation.
All limited company personal guarantors must obtain independent legal advice from a solicitor. The solicitor who has provided the advice will then send us a signed Legal Advice Confirmation letter, along with a Deed of Guarantee and Indemnity from the solicitor acting on our behalf. Again, failure to receive signed copies of either of these documents will delay completion.
If you need to ask us a question, give me or one of my Telephony team colleagues a call on 0800 116 4385.
David - Underwriter
There have been lots of stories in the media recently about how more aspiring homeowners are depending on financial support from their parents to help them get on the housing ladder. I’ve even read a story which said that if the Bank of Mum and Dad was a mortgage lender it would be the 9th largest one in the UK*.
We understand that many people rely on financial support when buying a house which is why we’ve made our gifted deposit process as simple as possible.
It all depends on how much the gifted deposit is for. For gifts of £50,000 and above, we’ll need the donor to complete a Gifted Deposit Form. The form is simple and quick to fill in. Take a look at it by clicking here. The donor will need to explain the relationship between themselves and the recipient and confirm they don’t have any rights to property and won’t be living there. We’ll also need to see evidence of the source used to fund the deposit. We’ll accept certified copies of the gifter's bank or savings statements showing the funds are readily available.
When a gifted deposit is less than £50,000, in the majority of cases we won’t need the Gifted Deposit Form or evidence, but there may be times when this is required at the underwriter’s discretion. If you’re unsure and would like to talk with someone, speak with your Business Development Manager or call our dedicated support team on 0800 116 4385.
Paul McGonigle - Chief Executive of Positive Lending
These are just some of the comments we’ve heard over the last few months from brokers infuriated with the bridging market. And they’re right. Never before has the sector been packed with so many product options. New lenders seem to launch every week with high street, specialist and niche funders all vying for borrowers. It’s no easy task for a broker to keep up-to-date with the latest product options.
Today’s bridging borrowers are experiencing fantastically low rates, especially under 75% LTV. There are some phenomenal short-term loan options available from established lenders, such as Precise Mortgages. But how do you ensure your customer gets the best outcome?
The savvy broker knows that a specialist distributor, such as Positive Lending, will help them source the best bridging loan outcomes available for their customers. At Positive Lending, we have a dedicated team of bridging specialists who fully understand lender criteria and the products available. They have continuous lender training and work closely with lenders’ underwriters so that they are perfectly placed to source and secure bridging funding.
We asked our broker partners about why they used Positive Lending to help them with specialist lending. Here are some of the replies we received:
Bridging loans provide customers with an extremely useful short-term funding solution. If you’re a broker who finds bridging complicated and you would like help understanding the market or sourcing a loan, speak with Positive Lending’s bridging team on 01202 850830 or Precise Mortgages by calling 0800 116 4385. You’ll love the support that’s available.
Lyndsey - Underwriter
I recently received a call from a broker asking for clarification about the equity loan part of the government’s Help to Buy scheme. They wanted some advice about calculating the interest and whether it should be included in their mortgage application.
To make sure your customer fully understands the long-term financial implications of Help to Buy, you should always add the equity loan repayment as a commitment when you’re completing their mortgage application.
The monthly commitment is calculated by multiplying the government equity loan by 1.75% (this is the initial rate customers are charged once the interest free period has finished) and then dividing by 12. This will be a future commitment that we will use in our affordability calculation.
It’s important to explain to your customer that although they don’t have to start paying interest during the 5 year interest free period, it will be an upcoming cost that needs to be taken into account at the end of the 5 years, unless of course the equity loan is paid off within the interest free period. Just remember to review the scheme details to ensure your customer is aware of the ongoing costs as the payment is likely to increase over the term of the mortgage.
If you’d like to find out more, call us on 0800 116 4385 or visit the Help to Buy section on our website by clicking here.
Ryan - Underwriting Team
There’s been a big increase in the number of customers using limited companies to manage their buy to let business in recent months. In fact, according to a recent article in Mortgage Introducer1, it’s estimated that 18% of properties let out in the first half of 2018 were owned by a company rather than an individual – a record high. With more customers choosing to incorporate, we thought this would be the perfect opportunity to let you know how to transfer an existing buy to let property into a limited company structure.
We understand why you’d think the transfer should be keyed as a remortgage. Unfortunately we can’t accept it in this form; it must be keyed as a purchase. In effect, the property must be ‘sold’ to the limited company. We’ve had to turn down a lot of applications recently which have come through as remortgages.
Although you’ll have to rekey the application as a purchase, don’t worry about having to upload the documents again. We will simply move them across to the new case once it’s been submitted as a purchase to get the case moving forward as soon as possible.
Due to the tax implications associated with transferring property, it’s vital your customer seeks independent advice before deciding whether to incorporate as a limited company.
If you’d like to discuss a Limited Company case with us, please call 0800 116 4385.
Find out more about our range of Limited Company Buy to Let Mortgages, including our latest limited edition products with rates from just 2.89%2, by clicking here.
2Rates correct as of Wednesday 18th July 2018, please refer to https://www.precisemortgages.co.uk/BuyToLet for the latest product information.
Sophie - Underwriting Team
If you’ve submitted a limited company portfolio landlord application since the stricter underwriting requirements came into force, you’ll know how time consuming the process can be, both for you and your customer. Having to dig out proof of mortgage payments via bank or mortgage statements can be a nightmare to validate, especially if your customer has lots of properties.
We understand the extra paperwork can really slow an application down, so to speed things up we’ve simplified our underwriting process for Limited Company portfolios. We no longer need Mortgage Conduct Statements for typical cases which will significantly reduce the amount of paperwork required and improve turnaround times.
We’ve also doubled the length of the validation period from 6 to 12 months which will make it easier to place cases for the same customer in the future. This means that subject to confirmation that the information we hold hasn’t materially changed, we won’t need a new business plan, asset and liabilities statement or details of the portfolio for subsequent applications. We’ll simply send you the information we hold on the portfolio for you to validate with your customer, saving you both valuable time.
Both of these changes apply to new cases and cases that are already in the pipeline with us.
The improvements are just the latest in a series of enhancements we’ve made to take the heavy lifting out of portfolio lending. Our online calculator gives an indicative assessment of whether a portfolio meets our criteria before you submit an application. The additional information that’s now required can be submitted using our 3 simple forms, the landlord’s forms or even another lender’s forms, and our Portfolio team will key the additional information into the system so you don’t have to.
To find out more about how we can help with your portfolio landlord applications, call us on 0800 116 4385 or visit our website.
PS Don’t forget that on Wednesday 25th July we launched some fantastic new Buy to Let products to further help you place your portfolio landlord cases. Click here to find out more.
Richard – Head of Financial Crime
We’re always thinking of ways to make life as simple and hassle-free as possible for our customers. In recent blogs we’ve revealed the launch of our new Buy to Let and Residential Mortgage Submission Guides and an Additional Information Form, as well as improvements to our Standard Declaration Form.
Our latest criteria enhancement means we now only need 1 year’s documentary evidence if we can’t electronically verify your customer’s residential address history.
As we move towards an increasingly paperless society, more people are choosing to receive documents like their bank statements and bills electronically. As a consequence, many customers don’t tend to retain documents for a long period of time. While it’s undoubtedly good for the environment, it can cause problems if they need to produce 3 years’ worth of printed documentation when applying for a mortgage or loan from a lender.
The increase in online activity, however, combined with a system enhancement which has improved the way we carry out identity checks, means there are even more opportunities for us to confirm your customer’s ID and residential history. Providing that the 3 years’ address history keyed into the system can be verified online, there is no need for your customer to send in printed documentation for evidence. In instances where we’re unable to fully verify their details, we’ll ask your customers to provide us with 1 year’s printed evidence. This can be any of the following documents:
You can find out more in our Anti Money Laundering Guidelines document. If you’ve got any questions about this improvement, please speak with a member of the team by calling 0800 116 4385.
Lisa – Head of Long Term Lending
I’m often asked by brokers, especially those who are new to specialist lending, what happens during our long-term lending application to offer process. Following your feedback, we’ve created this handy guide to help.
The following stages are shown in real time on our Client Management System. Remember, you can log in and review the status of a case 24/7 to keep up-to-date with its progress.
If you found this useful, keep a look out for future blog posts that discuss different elements of our application to completion process, ensuring you’re fully up-to-speed with our processes.
If you have any questions regarding this information, remember you can contact a member of the Sales Team or our dedicated Intermediary Support Team on 0800 116 4385.
Matt – Underwriting Team
Since my first blog post at the beginning of April, thanks to your feedback, we’ve made a series of changes that have gone a long way in helping us help you when it comes to enhancing our service.
In a recent meeting my team were talking about feedback they’d received around the way we request additional information and how best to support you in providing this. This conversation led us to discussing how we could make this process simpler for you and your customers, especially where this information is pivotal to us reaching a lending decision.
From this discussion, our brand new Additional Information Form was created. Because we know that not every application is straightforward, this form allows you to tell us additional information at the start of an application. We’d recommend you complete this at the beginning of an application and upload to our system, along with any supporting documentation (remember we also have our Buy to Let and Residential Submission Guides which we designed to help you understand what documentation needs to be submitted at the start of an application).
The benefit of this is that it can help us fully assess cases and reduce the number of times we need to contact you for follow up information, which can help speed up processing.
Here’re some examples of additional information that you could provide to help us process your cases more quickly.
Providing these additional details really can help us understand a case and stop us having to come back to you to ask questions which inevitably leads to delays.
We’re here to help so if you aren’t sure if information is useful contact our Sales Team or Intermediary Support Team to discuss a case and any additional information we may need.
To download and use the new Additional Information Form click here.
Ros Brown - Underwriting Manager
The saying goes that it’s the little things that make the biggest difference. A tiny tweak here and a slight change there add up to a larger overall improvement when they’re all put together.
We’re always thinking of ways of making applying for any of our products as easy as possible. We recently made a small, but significant, change to our Standard Declaration Form to make the process quicker when you submit information to us in the future.
Customers have previously had to indicate what fees were added to their loan, such as product fees and telegraphic transfer fees, by ticking a series of boxes. If you’ve ever had to go back to your customer because of an incorrectly completed Standard Declaration Form, you’ll know how frustrating that can be.
To make things easier, we’ve removed the boxes from the Standard Declaration Form. It doesn’t sound like much, but taking them out will reduce document requests, avoid unnecessary duplication and speed up application-to-offer times.
Thank you for your feedback which has helped our Underwriting team introduce this change. We hope it will make things a lot more straightforward for you and your customer.
Click here to start using the new Standard Declaration Form.
If you’ve got any questions about the change, please speak with a member of the team by calling 0800 116 4385.
Hopefully you’ll find this change, along with others we’ve made in recent months, will make it easier for you to do business with us. If you agree, we’d really appreciate it if you would vote for us at this year’s Financial Adviser Service Awards. Voting only takes a few minutes and you can make your nomination by clicking here.
Alan Cleary - Managing Director
We know we can always make things better which is why we instigated our Broker Journey project 12 months ago. The aim of the project is to collect all of the broker feedback we receive and look at how we can make doing business with us as streamlined and as broker-friendly as possible.
It’s only by you talking to us and letting us know what we’re doing right or what we could improve that we can make things simple and pain-free. We’re always listening to what you have to say and your invaluable feedback has led to us introducing a whole raft of service improvements over the last few months.
Before you even send us your application, you can now check our online Buy to Let and Residential Mortgage Submission Guides to make sure you’ve got all of the documentation you need before sending your case in. Created following broker feedback, the guides detail the documents we need for each application and are designed to be printed and used for easy reference.
When you told us you wanted a quick and easy way to access our lending criteria, we created a searchable Online Criteria Guide. Since its launch earlier this year, the mobile and tablet friendly guide has been viewed by brokers more than 45,000 times.
You can now check how much your customer could borrow before submitting their application by using our online Affordability Calculator. The calculator helps you to understand the benefits of our buy to let proposition and shows the options available to your customer to help them get the loan size they want.
If you’ve still got any questions or need a little more help in completing your application, our dedicated Customer Support Team is on-hand 9am-6pm Monday to Friday. Our expanded Sales Team is also available with any support you might need.
Once you’re ready to submit your application, you now only need to provide one signature on our Document Certification Form to verify all supplementary documentation instead of having to sign each piece of paperwork individually. We’ve also made it easier for you to send us the documentation by improving our system so you can upload it directly to the system.
Once we have your customer’s application, you’ll have direct access to a dedicated underwriter and our outbound call team will proactively call you to discuss any case queries. We’ll also send you regular case updates via SMS or you can track your case’s progress online 24/7.
Hopefully you’ll have noticed the improvements and find doing business with us is now even easier than it was before. If you’ve been impressed, I’d really appreciate it if you would vote for us at this year’s Financial Adviser Service Awards. Being recognised at these awards would really mean a lot to us.
Voting only takes a few minutes and you can make your nomination by clicking here.
Many thanks for your support and we look forward to working with you in the future.
Steve - Underwriter
Firstly I wanted to say thank you for taking the time to send us details about your customers, but did you know that sending us information we haven’t asked for can slow a case down? We’re obliged to underwrite everything we receive, whether we need it or not. This means we might have to ask more questions about your customer, which could result in frustrating delays in issuing an offer.
As a rule of thumb, for buy to let mortgage applications we only need a standard declaration form (and for limited companies a direct debit mandate), while for residential mortgage applications we need 3 months’ bank statements and income documents (P60 and 3 months’ payslips for employed customers or HMRC tax calculations and tax year overviews for self-employed customers).
With this in mind, we’ve created a Buy to Let Mortgages Submission Guide and a Residential Mortgages Submission Guide to give you an idea of the information we need at application. Click on the links to find out what we need you to include with your case. If we require any more information from you, we’ll get in touch and let you know what we need.
If you’d like to speak with a member of the team, give us a call on 0800 116 4385.
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,