Mortgage Solutions’ latest poll asked brokers whether they offer applicants inside tips on how to increase affordability and their appeal to mortgage lenders.
Around 50 per cent of brokers replied positively, whilst 22 per cent negatively.
Around 28 per cent of brokers said they have sometimes helped first-time buyers stretch affordability.
Robert Winfield, managing director at Chartwell Funding Limited, said that whilst they are happy to provide little tips to clients to help achieve their objectives, they would never push boundaries and leave clients with too big a mortgage.
He added: “One old tip we recommend is effecting and servicing a credit card to boost your credit scoring as this can go a long way in maximising borrowing for a client. We always ask clients who receive variable pay if it is a bonus or commission as lenders treat these differently.
“In certain circumstances it can be better to have commission on pay slips and asking clients to check with their employers if they can change the description on pay slips can help. We also advise clients that lenders use different affordability algorithms based on salaries and for someone on say £24,800, if they could negotiate a pay rise with their employer to £25,000, this can make a big difference.
“It is a dilemma when helping clients to maximise their borrowing as to how much we coach them, however I still remember the good old days of self-certification and my borrowing book outperformed the underwritten book no end when it came to missed payments and repossessions. So should we stop pushing boundaries on affordability calculators and merely bring back SC for the right calibre of clients?”
Quicker mortgage completion means happy customers
Lisa Bird, chief operating officer at The UK Adviser, said the company is not tied to a single provider and can therefore search the market for the best deals and products, which changes rapidly in the first-time buyers’ market.
Bird said that her network of advisers are able to share tips with each other and their clients following successful first-time mortgage approvals.
She added: “Staying abreast of the changes and the best offers at that particular time can save buyers a significant amount of time and money.
“Affordability is based on a client’s monthly expenditure together with any outstanding financial commitments. Therefore our advisers’ asses a client’s financial circumstances in order to give the best advice possible and improve their chance of obtaining the mortgage.
“Our advisers also help clients view their credit reports and give them a better understanding of the lenders available, based on their credit file. Every client is individually assessed before their application is submitted to the lender – this means quicker mortgage completions and, most importantly, happy customers.”
Good advisers explain how lenders see affordability
Dominic Lipnicki, director of Your Mortgage Decisions, said that for most, the purchase of their first home is a huge financial undertaking, which is why proper planning is key.
He said: “Good advisers should carry out a detailed fact find, ensuring that they don’t fall into the trap of being order takers. We all know what a difference a few per cent in LTV calculations can make to affordability and monthly payments hence all avenues should be explored.
“In many ways, first-time buyers are a vulnerable group of clients as they often have little knowledge of the mortgage market and require more help. Many may not be aware of niche products such as guarantor mortgages and offset which is why it is imperative that first time buyers are armed with all of the relevant information so that they can make informed decisions.
He added that good advisers will explain how lenders see affordability in respect to other outgoings, as well as the importance of looking after their credit file, being on the electoral roll, reduce their direct debits and fresh credit searches to a minimum.
“Client acquisition is key in our industry and spending some time advising clients who may not be placeable now but with sound advice, could be a client for life in the future,” he concluded.