Not all mortgage lenders are the same
In years gone by the major banks and building societies all had very similar lending criteria and there was very little difference in their product ranges. With new lenders joining the mortgage marketplace, some with highly innovative products, it means that the choice of lender is more important than ever before.
Whilst the days of the local branch manager being allowed to make lending decisions are probably never to return, we are seeing many of the new lenders allowing greater flexibility in their lending criteria. The big high street lenders still however want to play safe with very strict lending criteria, which means their computers rather than humans drive the lending decisions.
Admittedly, some of these traditional mortgage lenders have reacted with innovation of their own but unfortunately many of the volume lenders just look to cut costs to protect their profit margins. Lenders will always attract business just because their interest rate is 0.1% lower than the competition but we are finding more and more that service standards will slip as a result.
We hear reports of it taking up to a month to see a mortgage adviser at some major high street banks and even when the applications are submitted, the workload of underwriters mean that in many cases, arranging a mortgage is no longer a quick matter. As independent mortgage advisers, we submit applications across many lenders and our list of those not to deal with if you are in a hurry just seems to get longer.
We are seeing more innovation in the marketplace, both as a result of the demands of today’s borrowers and as a result of the new lenders looking for their ‘niche’. An increasing proportion of a client’s mortgage needs require us to think a little out of the traditional box these days; perhaps due to employment situations, property types or borrowing requirement.
For many clients, a single predictable regular income is no longer the norm. Flexible working patterns, multiple income streams or a high proportion of variable earnings are not things which the computer led lenders can cope with, but a lot more scenarios are possible when lenders have real people assessing cases.
It is a myth that lenders will not lend on properties with more than an acre of land, that thatched properties are un-mortgageable or that you cannot get a loan on a property with a second kitchen, most things are possible if you know where to place an application. The most interesting and rewarding part of the work we do is the time we spend on these ‘out of the ordinary’ mortgages.
As well as knowing which lender will consider a particular mortgage scenario, a major benefit of using a mortgage broker is that they will know how best to present the case to a lender in the most favourable light to get that positive decision.