Going back to our roots
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The outlook maybe positive and the sun may be shining, but the reality is that we’re all working considerably harder to earn the same shrinking pound compared to a few years ago.
An obvious comment? Yes it is, but the stark fact remains that customers are also much harder work than before and conversion rates have dropped considerably.
Many of tomorrow’s customers are researching the internet and being succumbed by headline grabbing mortgages and negating to properly read and understand the small print.
Others have selective amnesia, forgetting the odd CCJ here and there, or the missed mortgage payment that was not their fault. Honest guv!
Even clients who have had historic credit issues are being picky with the rates and options provided to them, which is really surprising given the limited number of providers in this area. The term ‘cake and eat it’ comes to mind.
As a specialist mortgage packager/distributor, we are stuck in the middle. In the middle of the initial conversation from the broker and the client, and in the middle of the application being placed with a specialist lender.
Now, more than ever, the initial conversations need to be more explorative than before. Even going as far as getting the clients credit report upfront (credit expert free trial for 30 days via the AToM website - no plug intended!) and that simply ensures we know the full picture right at the outset.
We encourage our intermediary partners to determine the exact nature and breakdown of the client’s income (basic / overtime / shift pay etc) accepting that not all of the income can necessarily be used with all lenders. Or, if the client is self employed, provide the last 2-3 years net profit figures, drawings and salaries paid. Other assets, liabilities and so on. Often, it is a good idea to look at business and personal bank statements too.
In short, if we don’t know all the facts at the outset, we may have tried placing the case with a couple of lenders before the full extent of the truth evolves and this could be detrimental to the clients credit score.
As lenders do begin to re-emerge or join a currently under funded market place, what is for sure is that distribution will be key. Those more savvy funders will realise quickly that service levels will be hit and the cost of providing their mortgages will rise if they choose not to use the specialist distributor/packager fraternity to act as the frontline in siphoning out the cases that don’t fit at the outset. Or for fielding the many daily calls from brokers for updates/queries on applications.
Those who predicted the end of our sector some years ago have been proven wrong (again) and now, in the main, we are seeing the sector expand once more. Diversification has been the bedrock of our survival, but now, as volumes increase once more, it’s simply back to basics and proving that we are good at what we do.
