A successful application will come down to how the lender assesses the case, which is why so many brokers value lenders who can be flexible when considering elements of the application which may fall a little outside what would be considered ‘vanilla’.
Versatility in the way lenders assess cases will obviously be particularly welcome for borrowers with some level of adverse credit.
It’s beyond question that the last few years have been testing for households’ budgets across the country, and as a result of challenges like the pandemic and the record levels of inflation, some would-be borrowers have acquired the odd black mark on their credit history which could provide an issue if looking to work with overly prescriptive lenders.
However, it would be a mistake to assume that these are the only borrower cohorts who benefit from lenders being more flexible and adaptable in the way they go about considering individual cases.
The complications of complex borrowers
The truth is that complications in a borrower’s circumstances – or at least, perceived complications – can come in many forms.
There could be issues around the income setup for example. While most clients have a straightforward arrangement, with a single monthly income payment, there is a growing number of prospective borrowers for whom this isn’t the case.
For example, we had a case recently with a borrower who had three separate income sources – their own self-employment work, a partnership with relatives, and commercial buy-to-let investments.
There is nothing wrong with having such an arrangement, yet the borrower would clearly have had issues navigating an application with high street lenders who prefer for borrowers and their circumstances to fall within neat, predetermined boxes.
Alternatively, there are times when the apparent issue centres on the property itself. We know that brokers can find it incredibly frustrating when everything around a case seems entirely straightforward, only for the design of the property or the materials used in its construction to throw a spanner into the works.
At Mansfield, we have seen this first hand, recently handling cases for unusual properties including a period property from the 1880s, a windmill in commercial use for a couple of days a year, and a bungalow with a cattery on the site.
Lenders who cannot be versatile in their activities, who are limited in only handling cases which fall within the bounds of strict criteria, are unlikely to be able to work with borrowers in these cases.
Versatility has to be more than a buzzword
Versatility means embracing those more unusual cases, taking the time to actually look beyond those apparent complications that would likely cause high street lenders to run a mile.
Sure, the applicant might have a handful of different income sources, but that fact alone should not be enough to remove their chances of a mortgage. Instead, let’s get a better understanding of their situation so that we can make a more informed decision about whether we can help them.
It’s much the same with property complications. While it may be unusual to want to borrow against a windmill or a period property, it should not be impossible. It simply requires the lender to manually bring together all of the facts so that they can be assessed properly.
In the years ahead brokers will work with all sorts of clients who may fall outside of the strict criteria of high street lenders, and not just because of adverse credit.
It’s therefore crucial for brokers to pinpoint the lenders best placed to consider these cases fairly, and who are most likely to be able to support those borrowers in securing the funds they need.
