Mortgage Solutions was there and spoke to several brokers about their impressions of what the specialist market could offer, revealing surprising results.
Most intermediaries at the event were unaware of the flexible criteria options by non-high street lenders, labelling them, instead, as adverse credit providers.
Specialist lenders can offer clients high-street beating mortgage terms for older borrowers with lower minimum income thresholds. This sub-sector of the mortgage market has done a lot to profile raise over the last two years but now its up to the intermediary to educate themselves on new lender propositions to help clients.
This week our panel of experts asked whether brokers are doing enough to keep abreast of the market and if not, how can this be improved.
Aaron Frizzel, business principle, Mortgage Advice Bureau, discusses his firm’s sharing culture and how this has benefited his team.
Sam Murphy, managing director, Mortgage Medics, talks about the conscious effort brokers must make to constantly keep up to date on evolving criteria, after stagnant innovation following the credit crisis.
Danny Belton, head of lender relationships, Legal & General Mortgage Club, urges brokers to look to mortgage desks and the wider market for solutions for older borrowers.
Aaron Frizzel, business principal, Mortgage Advice Bureau (MAB)
As a firm, we take a very active approach to ensure our advisers are given the opportunity to meet representatives from providers on a regular basis. Not all mortgage and protection providers have field-based BDMs, some are telephone based. Nonetheless, they are a vital part of the process when placing business and offer up to date policy/criteria information when it’s needed most.
Regular team meetings ensure cases such as high loan-to-values, lending into retirement, foreign nationals or unusual property types are discussed openly, as we have a strong sharing culture within the group which allows knowledge and skills to benefit all where possible.
This is something which is encouraged from recruitment onwards and proves to be a real benefit. As a MAB partner firm we have the benefit of a relationship with Brightstar which offers a multitude of solutions for cases which are outside normal areas of criteria or advice. Thus far, their staff and solutions have proven to be of real value.
I cannot speak for other firms’ approaches to those, harder to place, clients. I can say that within our team there has always existed the approach that, if we cannot find the solution ourselves or with our partner firms, it in actual fact, cannot be done. We wish to ensure clients are not lost to the competition, are given the broadest exposure to all possible solutions and the very best of advice. When advisers and firms need to excel and large volumes of more testing cases are common, I’m not sure we can afford to overlook new lenders and expansive lending solutions.
Sam Murphy, managing director, Mortgage Medics
The last couple of years have seen a welcome return to product innovation from lenders across the marketplace and the return to prominence of the role of packagers like AToM, which champions the niche propositions of smaller lenders.
At Mortgage Medics we know that a big reason clients come to us is because they expect us to have the broadest possible spectrum of solutions available. We make time to engage with packagers and smaller lenders in order to keep abreast of innovations and hopefully say yes to our clients as often as possible. We meet with lender BDMs as a team on a monthly basis and share examples of innovation and success with each other – pooling knowledge so that one broker’s success can help a colleague in the future.
It has to be a conscious effort though – the ever increasing burden of regulation and compliance, coupled with a mortgage market which offered little in the way of innovation for several years from 2008, means that some brokers don’t make the time, or perhaps are out of practice when it comes to exploring more complex and niche solutions.
There’s also stigma attached to the return of some products, such as 100% mortgages and solutions for clients with potentially significant adverse credit. We don’t think there should be, so long as affordability and suitability are properly assessed.
Product innovation means that we’re able to find solutions to more hopeful borrowers, which is great news for brokers and borrowers alike. Long may it continue.
Danny Belton, head of lender relationships, Legal & General Mortgage Club
As a country we are now living and working longer than ever. As a result, industries have to adapt to the changing needs of customers – the mortgage market is no exception. Brokers need to be aware of changing customer demographics and should make it a priority to familiarise themselves with the extensive lending options currently available to ensure they can cater to the range of circumstances they will see among their clients.
We are definitely seeing a shift in the market as lenders review their propositions and amend criteria to meet the needs of older borrowers. This includes extending the maximum age limit to 85 from its historic level of circa 65 years. In some cases lenders have removed the maximum age limit altogether. It is important to remember that many older borrowers will have been making mortgage payments for many years without incident and would represent a good risk for lenders.
Brokers can always be doing more to find out what lenders can offer and if brokers don’t remain savvy and keep up to date they will unknowingly alienate a large proportion of the market. To avoid this happening brokers should ensure they are adequately familiar with the needs of an older customer, and what are available in the market to meet those needs, so they can accommodate this demographic into their client portfolio. Mortgage desks are one example of where brokers can get education on what options are available to support a range of customer needs.
