Evolving client needs

The mortgage market has been dynamic, challenging, exciting, volatile and rewarding in varying degrees for as long as I can remember. But it does seem that over the last 18 months, it has been all of those things all of the time!

As some form of normality returns and the way in which we all do business becomes clearer, it has also highlighted that client needs (which were always evolving) have had some accelerated change mainly due to the pandemic. The scenarios presented by these clients require a much broader understanding of the spectrum of lenders that intermediaries can use to provide mortgage solutions for their customer.

The Specialist Market

It is certainly true that customers are more likely to have needs now that are unlikely to be satisfied by High Street lenders than at any time in living memory. Whether that relates to income issues due to furlough, unemployment, or reduced hours for those employed applicants, a traditional High Street lender may not be able to service this new generation of needs.

But it’s not just employed customers who would be affected self-employed customers would have also suffered an element of volatility as the pandemic has affected countless businesses up and down the country. Regardless of whether customers are employed, or self-employed, around 29%* of households have had to borrow money over the last 12 months to replace lost income. There is also a higher propensity for clients to look at non-standard properties due to a shortage of housing stock in a quest to home ownership. These are all aspects of criteria that specialist lenders have in their DNA and reasons why intermediaries need to think outside of the High Street when they are making their lender decisions.

Price or Criteria?

The traditional price led sourcing process, at least as a standalone procedure, is far less likely to hit the spot for clients now  than it did historically and more and more intermediaries are now using criteria led sourcing before they look at price. ‘Does my client fit’ is box number one for many transactions and having a strong set of filters is vitally important. The first of which should always be your own knowledge of the lender market. The need for independent financial advice plays a far bigger part now more than ever and demonstrates to clients that the process of getting a mortgage is a lot harder than 20 years ago. The expertise & knowledge of an Intermediary is paramount to customers who are about to embark or supplement one of the biggest transactions in their lifetime.

Giving regular time to a high street BDM will tell you little that you didn’t already know. Whereas spending some of your valuable time with a specialist BDM should at least reinforce, if not enlighten, your thoughts on your initial lender filter which you can then progress through specific elements of criteria which ultimately provides you with the lender decision process. A great relationship with a specialist BDM will also help smooth the lending process once an application is made. A specialist lender will almost certainly have a different set of requirements to a high street one and be more likely to have quirks that are different to other specialist lenders…and will also be more likely to be open to an underwriter conversation as cases are likely to be more complex. If you understand what the requirements are and can provide the documentation at the outset you have a much better chance of achieving a positive outcome for you and your client. Cases which are submitted to lenders with all the relevant documentation uploaded right first time, are more likely to go to offer much quicker than those that are missing important information from the outset.

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