So this week, Mortgage Solutions is asking: Are you finding the cases that land on your desk are becoming more complex and as a result, are you making use of packagers?
We are experiencing cases with notable challenges.
The central issues are stemming from the economic uncertainty caused by the Covid–19 pandemic which has affected many businesses and in turn, pushed the banks and building societies to alter their lending criteria.
Government assistance has been invaluable to many businesses and employees. However, most lenders are either shying away from lending to employees that are still furloughed, or lending based on the furloughed income which in general is at a maximum of 80 per cent of their normal income.
In the case of those who are self-employed, most felt an impact on their earnings during the lockdown and have also taken advantage of the opportunity to receive a bounce back loan from the government.
Such individuals are now faced with stricter documentary evidence required by the underwriters who are naturally more discerning and risk averse.
The minimum deposit required by the vast majority of lenders has also increased; 95 per cent loan to value (LTV) mortgages are a distant memory, and 90 per cent LTV products are very limited in availability.
Equity release and second charges are becoming common solutions for those needing to release money tied up in their property to invest or simply stay afloat during these unprecedented times.
The highly experienced team at London Mortgage Solutions are equipped with the knowledge, resource and support to adequately and successfully resolve the vast majority of these complex cases.
We are utilising packagers where appropriate to ensure that our clients benefit from a solution that is the most suitable for their needs and requirements.
Being a broker is never simple.
As an industry we have to adapt on a sixpence whenever the situation changes, and normally it’s a situation which is outside of our control.
Whether it’s a pandemic, or changes in government policy thrown out to gain political capital and headlines, you can guarantee that whenever you think you know what you are dealing with, something will happen to send a curve ball into your world.
So, the pandemic has seen a shift in enquiries combined with the stamp duty holiday – more enquiries for purchases with many seeking a holiday let property. Our August in 2020 was our busiest in years.
For us, a complicated case means a standard case. Very little of our enquiries could be considered ‘vanilla’ – there’s always a complication involved.
As a result, our work is always varied – if it wasn’t, then we wouldn’t be able to deal with the queries we have from clients, especially those who have made their own application elsewhere and been turned down.
Items such as one year’s self employment and a minor – or major – credit blip in the past can make a difference to what can be achieved.
Normally, what a client sees as standard is normally anything but. Occasionally, we’ll get a call once a deal has been struck and expected to work a miracle.
We utilise our own knowledge together with strong lender relationships and software to produce quality results – we also use packagers where we seek a second opinion.
As a broker, you never ‘know it all’ – those who claim to are lying.
To be honest, all of the cases we deal with are quite complex.
That being said, this week I’ve had a client who is looking to staircase out of shared ownership property, as well as a client with significant debt looking to sell their home and purchase their next home with the Help to Buy scheme.
We also have a landlord looking to remortgage his home and one of his buy-to-lets to raise money to purchase his sister’s property and turn that into a buy-to-let.
I would say that most of the complexities come from clients looking to do weird and wonderful things.
With everything that has happened this year, clients are trying to be creative to make their money go further and their mortgages more affordable.
We don’t refer anything on to third parties as we are the experts and if we can’t do it, then we’re confident that no one can.
My experience of packagers is quite negative, and they often don’t offer clients the same service that I offer them and don’t have the levels of experience I have.
I’m sure packagers are useful for brokers who deal in volume and would rather pass the cases onto someone else rather than complete the research themselves.
Our philosophy is that there is a mortgage for everyone, and it’s up to us to find out which lender is able to help.