"In today's rate environment, the gap between ‘specialist’ pricing and high street it a lot closer than some might think."
Ours is a world of individuals - everyone is unique, and in today’s mortgage market, this is becoming ever more the case.
With the cost of living, increasingly diverse employment situations, the rise in self-employment, fluctuating rates and supply and demand challenges in the housing market, it’s becoming increasingly more important for customers to have choice when it comes to accessing a mortgage suitable to their needs. More than ever, we are seeing the need for customer solutions that can’t be found through traditional lenders.
However today’s advisers can set themselves up for a win by expanding their knowledge and looking beyond the mainstream. Afterall, what was once seen a niche, is now becoming the norm.
So, what attributes would I consider to be winning ones in our industry?
Embracing individuality
What we are seeing now is a rise in demand for ‘specialist’ lending. Interestingly this wouldn’t predominantly be a term used by advisers to describe a case as it lands on their desk but equipping themselves with the tools to help place that case when it comes along is more important with the landscape as it is.
By understanding that not only are all client’s individuals, but lenders can also have an individual approach to their lending too. As an example, having knowledge of specialist lenders approach to income consideration, affordability, employment types, or credit profiles will go a long way.
Shake off pre-conceived perceptions
Specialist lending has a historic reputation, which still hangs around in pockets today such as ‘only for those with bad credit’, ‘only for riskier applicants’, ‘expensive and not affordable’. The good news for advisers and their customers is that these perceptions are no longer accurate. So, let’s shake them off for good.
Lenders in the specialist market may be able to look at an individual's income in a different way to other lenders, and as a result lend more, alongside other traits such as considering multiple and variable income streams, which others will disregard. They also may demonstrate greater flexibility and tolerance for customers with significant historic adverse on a credit file, recent blips, or even not consider some missed payments as adverse at all. And what’s more, in today's rate environment, the gap between ‘specialist’ pricing and high street it a lot closer than some might think.
Look beyond the price
Of course the initial rate a customer pays on their mortgage is a consideration when brokers are advising, and that should obviously continue to be the case. However, where an applicant’s circumstances are more complex, and some lenders may be able to take a more manual and pragmatic approach to looking at the case, there is value in considering these lenders.
Understanding that value – where lenders can look to provide more positive outcomes for cases that are less than straightforward, can be a key strength in an adviser's armoury.
A specialist lender might be slightly more expensive than a high street lender, but they may be able to consider more of the applicant’s income and therefore enable a level of affordability that is desired by the customer for their needs. Value comes in many different forms and isn’t only initial rate – it’s about understanding what your customers financial objectives, enabling and supporting them to achieve these without having to unnecessarily compromise.
Communicate, communicate, communicate
This attribute goes for lenders as well as advisers. Communication wins - always. And communication consists of listening and understanding as well as talking. Inboxes across the industry are chaotic and advisers today get more emails than ever before. Rate changes and criteria changes are frequent, and come from various sources – sometimes for the same thing!
It’s important to be educated, and share with the customer how a decision has been reached or the rationale for a certain request. Listen to their challenges, understand them and communicate. It might be that their case will take a little longer, especially with a specialist lender as they look through the information provided and seek ways to make the case work.
Manage expectations so everybody has a realistic understanding of timescales, as it's likely a more manual underwrite will allow greater flexibility, but will naturally take more time than an automated decision. Communicate with the lender, have the conversation about the application prior to submission if there is any element of uncertainty or something you feel the lender should know which will support the underwriters when reviewing the overall proposal.
This is what your relationship managers live and breathe on a daily basis, willing to help find solutions, get answers to questions and see what might help support the decision making process to get the positive customer journey and outcome that everybody is looking for.
If a case comes along that might not be your normal client type, why not reach out to the specialist lenders in your community. After all, it’s not a ‘special’ client, just real life lending.
