When asked what areas lenders might be missing when it comes to self-employed borrowers, Andrew Cappaert, national account manager at Brightstar, said: “The initial problem is where lenders will rigidly assess what’s in front of them without, maybe, human sense-checking it.
“It’s too easy for the computer to say no, so they may ignore that there’s a stable cash flow or contract-based income, growth trends… that really limits what is out there for the client ultimately.”
He said by being too rigid, there were people out there “not getting what they need”.
Plausible and sustainable business
Nick Parker, head of networks and clubs at Together, said underwriters really needed to understand the makeup of self-employed borrowers and their businesses, as well as “get under the skin” of what is happening. He said this could include understanding their cash flow, the business structure, and where the business comes from.
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He added that Together assesses whether a self-employed person’s business is “plausible” and “sustainable”, not just looking at their past affairs but also considering projected income in affordability assessments.
Parker said this approach was not uncommon in the specialist lending sector.
Rachel Geddes, strategic lender relationships director at Mortgage Advice Bureau (MAB), said brokers needed to “really get to know their clients” too, and learn how to read accounts and SA302 statements.
Geddes also suggested getting to know the lenders in the market and making contact with any that a broker had not reached out to before.
