The importance of networks in a complex mortgage world
Steve Swyny, Commercial Director at F4B Network
Over the years we’ve seen a gradual transition when it comes to policy, criteria, affordability and product accessibility across the mortgage market. In contrast, the recent pandemic has expediated change across a range of borrowing needs, personal finances, employment statuses and income generating opportunities at breakneck speed. In short, the world has quickly become more complex and the mortgage world even more so.
This complexity has only served to raise the value of an array of specialist offerings and the advice process in general. An important component within this is understanding trends which have emerged – such as methods of government support (and withdrawal of) alongside lending appetite when it comes to volume, risk, borrower type and LTV’s.
Bearing this combination in mind, recent analysis from Legal & General Mortgage Club’s SmartrCriteria tool is useful in building a better understanding of some of the lingering challenges facing borrowers and intermediaries in the current marketplace. The analysis found that adviser searches for furlough friendly mortgage criteria continued to fall between June and July, however, many borrowers continue to need mortgage options suitable for irregular incomes and repayment blemishes. Demand for lenders willing to consider borrowers with satisfied repayment defaults remained in the top three most sought after criteria points, with searches for unsecured arrears and unsatisfied defaults also appearing in the top 15 most searched for terms.
Demand for criteria relating to satisfied CCJs also remained broadly consistent month-on-month, while searches for borrowers with bankruptcy jumped by a quarter (24%). This sat alongside a 10% jump in criteria for borrowers with ongoing payday loan agreements. Visa-friendly mortgage criteria remained the most requested term by advisers in July. This was in conjunction with a 20% increase in requests for borrowers with foreign income. The data also found an increase in searches on behalf of borrowers with contract or irregular income. Criteria for borrowers employed via a fixed-term contract increased by 17% in July, while general contract worker criteria requests rose by 14%. Foreign income searches jumped by 20%.
The SmartrCriteria tool also recorded a 41% increase in demand for Help to Buy criteria and searches for shared ownership products also appeared in the top 20 most searched terms. Following an increase in demand for capital raising mortgages in May, July also saw searches for these products increase by 9%, the 4th most searched for criteria.
Advisers are facing a huge variety of client scenarios and it’s not always easy to keep track of changes in individual lending criteria and/or which lenders are ready, willing and able to service an array of complex needs. This means that advisers need additional support in identifying how, where and when their clients can achieve their property aspirations.
As a network, our main aim is to not only compile a diverse lending panel but to also understand their offerings and help point our advisers in the right direction. For the more complex cases, it might be prudent to engage with a trusted packaging partner and this is also an avenue which any good network offering will be able to facilitate. It’s all about providing support and options for advisers and their clients who continue to be underserved by the more traditional element of the lending community. And this is certainly a trend which is not going away anytime soon.