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Complex income: How to identify and deal with your exceptional clients

by: John Eastgate, sales and marketing director, Kent Reliance and OneSavings Bank
  • 25/08/2015
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Complex income: How to identify and deal with your exceptional clients
Placing clients can be perfectly simple if they’re straightforward; salaried in a permanent well-paying job with a spotless borrowing history.

But for those with different forms of income, it can feel like trying to fit a square peg into a round hole, with a whole range of variables making these borrowers harder to place.

Lenders have generally been moving further and further away from these clients. The recession led quite rightly to tougher regulation and many lenders decided that the best thing for them was to keep it simple and steer away from complexity. Responsible lending practices are to be welcomed, but the knock on effect for brokers, is that there are perfectly viable cases that are not being considered by lenders, meaning that clients are underserved and brokers are finding it harder to assist their clients.

Exceptional clients come in all shapes and sizes – some can be high earning directors or consultants, who earn income from multiple streams, while others may be sole traders, ex-pats or contractors. A client’s income may not follow a pattern consistent enough to allow them to easily borrow; also proving they’ll be able to pay the mortgage may be difficult, unless you can find a lender who will take the time to look at the broader picture. Homes for these cases are not going to be found at mainstream lenders whose core business and areas of expertise lie elsewhere.

Instead there are specialist lenders out there and a few tricks of the trade, which make it quicker and more efficient for brokers to spot opportunities for exceptional clients.

First, get under the skin of your client. Possibly the most important part of dealing with complex income situations is fully understanding your client’s situation and their objectives.  Brokers who are able to present their client’s case as transparently and accurately as possible – giving lenders the full picture, enabling them to decide whether or not it’s a wise idea to take on the borrower’s case. This will often lead to a quicker decision, which is important, as time is money for exceptional clients.

Secondly, it’s crucial to fully understand where your client’s income is coming from. It goes without saying that brokers should be doing this, but knowing it in relation to what the lender’s criteria is, makes it easier to match the case to a specialist lender. For example, different lenders will calculate income in different ways, and knowing who does what is essential when recommending one lender over another.

Lastly, in an effort to avoid protracted processing times, there are a number of different documents you can provide for larger, more complex cases, which can help prove income and stability. Tax assessments, directors’ loans, dividend statements and retained profits can count as acceptable proofs of income for high net worth individuals, knowing what your chosen lender will accept is essential.  If you also include any additional information to support your belief that the loan is affordable on the covering letter, it will make it easier for the underwriter to understand the case and pass through the assessment process far quicker.

By taking a methodical approach, and adopting some critical thinking towards a borrower’s individual situation and the lender’s criteria, brokers will broaden their experience and add real value to their clients. This ultimately will make exceptional cases, well, a little less exceptional.

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